================================================================================

                       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, 2000
                                             ----------------

                                       OR

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

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

                               THE MNI GROUP INC.
             ------------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                    NEW JERSEY                           22-2383025
         -------------------------------            ------------------
         (STATE OR OTHER JURISDICTION OF             (I.R.S. EMPLOYER
          INCORPORATION OR ORGANIZATION)            IDENTIFICATION NO.)

               10 WEST FOREST AVENUE, ENGLEWOOD, NEW JERSEY 07631
               ---------------------------------------------------
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

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
--------------------------------------------------------------------------------
                                (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 4,110,709
(as of 4/24/00) The aggregate market value of the voting stock held by
nonaffiliates of the Registrant is $2,818,597 (as of 4/24/00).

              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 [ ]

                               -------------------

<PAGE>


                                Table of Contents




                                      10-K

 PART I .................................................................    3
 Item 1 .................................................................    3
 Item 2 .................................................................   15
 Item 3 .................................................................   15
 Item 4 .................................................................   15

 PART II ................................................................   16
 Item 5 .................................................................   16
 Item 6 .................................................................   16
 Item 7 .................................................................   17
 Item 8 .................................................................   24
 Item 9 .................................................................   37

 PART III ...............................................................   37
 Item 10 ................................................................   37
 Item 11 ................................................................   38
 Item 12 ................................................................   40
 Item 13 ................................................................   41
 PART IV ................................................................   42
 Item 14 ................................................................   42
 Exhibit List ...........................................................   42

                                       2
<PAGE>


                                     PART I

Item 1.  BUSINESS


GENERAL DEVELOPMENT OF BUSINESS-INTRODUCTION

The MNI Group Inc. ("The Company") has primarily been engaged in the development
and distribution of nutritional and health products for humans and pets. During
the past fiscal year, while conducting its existing business, the Company
elected to focus its efforts on the development of a proprietary brand of
specially formulated phyto-estrogen and micronutrient nutritional supplements
targeting the various life cycles experienced by women and based on current
nutritional knowledge. The Company also began development of a woman's internet
site "womenshealthnetwork.com" which is intended to provide comprehensive health
care information for women on a broad range of conditions.

The Company's strategy is to provide comprehensive healthcare information on a
variety of conditions important to women to help them evaluate their health
choices. As part of this overall strategy, the Company intends to sell its
proprietary line of nutritional supplements as well as other complementary
products and services on its web site. The Company believes its strategy is
consistent with certain trends that are emerging with respect to women's health.

INDUSTRY TRENDS AND STRATEGY

The Company believes that the markets for nutritional products for women are
expanding. By responding to these trends, the Company believes that it can
become a premier marketer of health and nutritional products for women and can
establish its Internet site as a widely recognized source of health information
and products.

o        The expanding roles of OB/GYNs and the Nurse Practitioners and
         Physician Assistants focused on women's health create a market
         opportunity for the Company, which the Company intends to leverage
         through a marketing program targeting these professionals;

o        The Company believes that there is a significant and growing population
         of women who are dissatisfied with their health care. The establishment
         of the Company's web site with detailed health information developed in
         conjunction with its Medical Advisory Board, is intended to provide
         women and their clinicians with enhanced awareness about the conditions
         affecting women and the treatment options available;

o        The Company believes that women are seeking an on-line forum where they
         can find credible information and purchase products that address their
         individual needs. The Company is designing its Internet site to
         include, among other components, hosted chat rooms (monitored by
         members of its Medical Advisory Board).

The Company has had a very limited operating history in the women's 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 therefrom. 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 are not subject to FDA approval prior to sale. See "Government
Regulation" below.

                                       3
<PAGE>


Sales in the vitamin/supplement market in which the Company's products compete
totaled approximately $14.68 billion in 1999(Nutrition Business Journal), and is
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.

WOMEN'S MARKET

The Company, in developing its new products, elected to focus on the women's
market because women are the primary household shoppers and are predominately
the primary 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 women's health issues
and alternative treatment, the Company has developed a two-pronged marketing
strategy as well as its Internet strategy. 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; and the ability of its management and the
people associated with the Company to implement and execute its strategy. 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.

PROFESSIONAL MARKET - NURSE-PRACTITIONERS AND PHYSICIANS

As the amount of money spent on alternative health care continues to increase
health care professionals have recognized the importance of non-traditional
approaches to health care. Although ten years ago it would have been extremely
unusual to find physicians dispensing products, with the advent of managed care,
physicians have become acutely aware of opportunities to enhance their revenues
from their practices.

The principal professional groups to be initially targeted are Nurse
Practitioners and OB/GYN's.

                                       4
<PAGE>


NURSE PRACTITIONERS

NP's are registered nurses with advanced clinical and academic training at the
master levels. There are approximately 50,000 nurse practitioners, in the
country, 12,500 of whom own and operate their practice or clinic or run the
primary care segment of the physician's practice (THE NURSE PRACTITIONER. Market
Dynamics stats) Others work in managed care, hospitals and group practices. The
Nurse Practitioner has become a valuable resource for primary health care.
Through state certification, NPs may work autonomously from physicians and
provide comprehensive primary health care physical exams, diagnosis, and
appropriate pharmaceutical treatment. They account for more than 175 million
patient visits yearly, write over 200 million prescriptions for all drug
classes, and maintain their own liability coverage. The NPs incorporate
education, early detection and prevention of disease, reduction of risk
behaviors, and a philosophic approach to health in the treatment of their
patients. A recent survey finds that approximately 93% of Nurse Practitioners
use a form of alternative medicine in their practice. Their patient base
includes many of the health care consumers who are disenfranchised with
traditional medical care and seek a holistic approach. Government and
independent studies have shown that Nurse Practitioners provide a greater range
and quality of care than all other healthcare providers, appealing to those
consumers who tend to seek more personalized treatment with a focus on
prevention.

The Company believes that with the number of patient visits and the NP's
recognition of alternative health care as integral to a comprehensive program of
medical treatment, the NPs offer a very large potential market for the Company's
line of products.

The Company intends to target this market through trade shows, and by creating
alliances with institutions/hospitals that are either engaged in using NPs as
primary care providers or have on-site facilities specifically engaged in
dealing with woman's health issues. In this market, the Company intends to sell
its products under the brand name FemChoice(TM). The Company's strategy is to
build brand name recognition and become recognized for delivering the broadest
line of quality products for women. There are two organizations that serve as
trade associations for NP's (American Nurse Practitioners and Nurse
Practitioners for Woman's Health). Each of these associations has a trade
monthly magazine with an aggregate of approximately 60,000 monthly subscribers.
The Company intends to promote its products through these publications with
particular emphasis on creating brand name recognition as well as promoting its
Internet site. The Company also has hired an NP whose primary job will be to
market the Company's line of products to the NPs. Initially the NP will focus on
NPs with practices in the NY/NJ metropolitan area. In addition, the Company will
participate in industry trade shows.

PHYSICIANS (OB/GYNS)

The Company believes that many women now use OB/GYNs as their primary care
physician and that as the OB/GYNs role expands its focus on women's overall
health, they will begin to recommend nutritional supplements to their patients,
In view of the fact that approximately 54% of approximately 57 million U.S.
(women between the ages of 35 and 69) are regularly visiting an OB/GYN the
Company believes targeting the OB/GYN offers significant potential. As of April
4, 2000, in the United States and its protectorates, there were approximately
40,000

OB/GYNs of which 23,500 are Board certified (WWW.ACOG.ORG, source: American
Physician Characteristics and Distribution in the US 2000-2001). Initially the
Company will market to the OB/GYNs through trade shows and trade journals.

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).

                                       5
<PAGE>


The Company has distribution relationships with several network marketing
groups, including Natural Health Options (NHO"). This group is focused on
growing its network marketing force in the African American market. NHO was
formed in late 1998 and to date has been selling the Company's preexisting line
of nutritional products described below. The Company anticipates that NHO will
begin to offer the FEM CHOICE products within the first quarter of 2000. There
is no assurance that NHO will be successful in developing its network marketing
program.

The Company is also working with other network marketing companies that are
similarly focused on developing certain market niches. There is no assurance
that this distribution strategy will be successful.

INTERNET STRATEGY

Management believes that the increasing focus on the alternative health market
for women provides a significant opportunity for the development of an Internet
strategy.

MARKET OPPORTUNITY

The Company's proposed Internet site, womenshealthnetwork.com is intended to
enable consumers (principally women) to better manage their personal health with
comprehensive, relevant and timely content. The Company intends to establish its
network as a recognized and comprehensive source of healthcare information for
women and services on the Internet. The business model is 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
womenshealthnetwork.com site.

Other sources of revenue may come from the sale of the Company's products (under
private label) to other Internet health sites. The Company will label all of its
products in both English and Spanish, and all information about the products
will be available in both languages. In addition, the Company believes that if
it achieves sufficient traffic, other opportunities include the offering of CME
(Continuing Medical Education) courses for professionals and using its database
(assuming visitors when registering at site elect to "opt in") for targeted
marketing programs.

OVERALL INTERNET BUSINESS STRATEGY

The Company's internet business strategy incorporates the following key
elements:

o        Establish the womenshealthnetwork.com brand so that consumers
         associate trustworthiness and credibility with our company (The Company
         also has obtained the domain name for womenshealth.com in SPANISH
         "SaludDeMujer");

o        Provide consumers with high quality peer reviewed healthcare
         information to attract users to womenshealthnetwork.com and promote
         their loyalty to the website;

o        Syndicate content through affiliates to promote traffic growth;

o        Develop an on-line healthcare community to allow users with similar
         health-related experiences to exchange information and gather news and
         knowledge in a secure, anonymous environment;

o        Provide consumers with unique features such as one that educates
         consumers on the interaction among various drugs and other substances;

o        Provide an attractive website designed to attract women;

                                       6
<PAGE>


o        Facilitate e-commerce transactions offered by merchants, manufacturers
         and service providers to a highly targeted community of
         health-conscious consumers, including dual labeling in Spanish to
         appeal to the Hispanic market which is a rapidly growing market in the
         U.S. for nutritional supplements;

o        User-friendly site, Internet sites are frequently designed with
         sophisticated users and state of the art equipment in mind.
         womenshealthnetwork.com will be designed for the lowest common
         denominator both in machines and in expertise;

o        The site will virtually navigate itself - utilizing point and click
         algorithms. The site will guide even the novice Web surfer to his or
         her destination, user will be able to navigate site without being
         constantly required to navigate through advertising and product
         offerings;

o        The site will provide personal tracking - If desired, a visitor to the
         site can enter his name and e-mail address. From that point forward,
         the site will recognize that visitor by name when they return; this
         feature goes a long way towards creating a user-friendly site.
         Eventually the registered visitor will be updated automatically with
         information pertinent to his or her concern;

o        Personal tracking will build a targeted e-mail database;

o        The key aspect of the Company's projected site will be to provide the
         latest information on various alternative treatments for woman's health
         issues as opposed to the more common approach of providing more limited
         information with a focus on selling products; and

o        The site will provide access to members of the Company's Medical
         Advisory Board (as described below) during monitored chat room
         sessions. The site will also list information on upcoming educational
         events and lectures across the country.


MARKETING STRATEGY

The Company's site is intended to become a directory for women seeking health
information (a "hub" site). Hub sites have a characteristic that allows them to
be promoted inexpensively on the Internet. They are viewed as conduits for
information and not advertiser driven. The Company initially will not carry any
advertising on its site.

The Company's strategy will utilize a variety of on-line and off-line marketing
initiatives focused on building brand name awareness, drawing traffic to the
site maximizing the amount of traffic to the site and minimizing the cost of
acquiring visitors.

To increase brand visibility, the Company will initially concentrate on
promoting its website through an offline strategy of promoting its products and
website through targeted magazines for professionals such as OB/GYNs, and Nurse
Practitioners and through newsletter programs to targeted groups.

                                       7
<PAGE>


PRODUCTS

The Company has developed a total of 31 products (described below) to be offered
under its branded FEM CHOICE((TM)) label.

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 (SOFTGEL) 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.

15-17.   THE HEALTHY NUT (SNACK) SALTED, UNSALTED AND HONEY ROASTED FLAVORS
         (three flavors). A natural snack high in protein and phytonutrients.

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

19.      Huperzine A Complex contains an ingredient being tested in clinical
         trials in the United States for the treatment of memory loss associated
         with aging.

20.      PHYTO-TONIC (LIQUID) A true health formula dietary supplement.

                                       8
<PAGE>


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

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

23.      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.

24.      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.

25.      BLACK CURRANT SEED OIL (SOFTGEL) A comprehensive source of Omega 3 and
         Omega 6 (Essential Fatty acids). Important in the production of
         prostaglandins.

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

27.      ESSENTIAL OILS (SOFTGEL) Provides Omega 3, 6 and 9 Essential Fatty
         Acids.

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

29.      COLLAGEN PLUS (LIQUID) nutritionally supports body structure and
         provides energy. Enhances lean body mass.

30.      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.

31.      USRDA CALCIUM 1200 (WAFERS) A delicious chewable wafer flavored with
         malted milk. Provides the calcium necessary to prevent bone loss in
         women.


OTHER PRODUCTS

The Company is seeking to create alliances with other companies for the purpose
of broadening the number of products that can be purchased at its website. The
products/services to be offered will be consistent with the Company's strategy
of providing women with quality information. For example, the Company will

produce a module on its web site to represent a company which offers a medical
intervention weight reduction program. The Company will share (on an agreed
basis) a percentage of the revenues from sales of these products on its site.
The percentage will be determined shortly.

There is no assurance that the Company will be able to successfully negotiate
agreements with other providers of products/services or that if agreements are
entered into, revenues from such agreements will be generated.


MEDICAL 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 Medical
Advisory Board consisting of:

         Marianne J. Legato, M.D.,F.A.C.P., Chairperson is Professor of Clinical
         Medicine at Columbia University's College of Physicians and Surgeons
         and founder and Director of the Partnership for Women's health at
         Columbia. She is one of the nation's leading advocates for women's

                                       9
<PAGE>


         health. She was a charter member of the Advisory Committee of the
         Office of Research on Women's Health of the National Institutes of
         Health (NIH) and is co-chair of that Office's Task Force on Research on
         Women's Health for the 21st Century. She also chaired the Sixth Annual
         Congress on Women's Health in Washington. D.C., in 1998.

         She has served on NIH cardiovascular study sections and the basic
         science council of the American Heart Association. She was a director
         of the American Heart Association's New York Affiliate as well as a
         trustee of the New York Academy of Medicine. She is the founder and
         editor-in-chief of the new medical journal, Journal of Gender Specific
         Medicine.

         Among her recent publications are Gender-Specific Physiology: How Real
         Is It? How Important Is It? International Journal of Fertility 42(1):
         19-29, 1997; Gender-Specific Aspects of Obesity, International Journal
         of Fertility 42 (3): 184-197, 1997; Women's Perceptions of Their
         General Health, with Special Reference to Their Risk of Coronary Artery
         Disease: Results of a National Telephone Survey, Journal of Women's
         Health 6 (2): 189-198, 1997; Cardiovascular Disease in Women:
         Gender-Specific Aspects of Hypertension and the Consequences of
         Treatment, Journal of Women's Health 7(2):199-209, 1998; Women's
         Health: Not for Women Only, International Journal of Fertility 43 (2):
         65-72, 1998.

         Her groundbreaking work on women's health has led to several awards.
         Her book, The Female Heart: The Truth About Women and Heart Disease,
         won the Blakeslee Award of the American Heart Association. The most
         recent awards include being named as a "Health Hero" by American Health
         for Women and as "The Woman That Makes a Difference" by the New Your
         Women's Medical Association for 1997.

         She is the author of Gender-Specific Aspects of Human Biology for
         Practicing Physicians (Future); What Women Need to Know: From Headaches
         to Heart Disease and Everything in Between (Simon & Schuster); and The
         Female Heart: The Truth About Women and Heart Disease (Simon &
         Schuster). She serves on the editorial boards of Cardiovascular Risk
         Factors, The Journal of Women's Health, Medicine and Behavior, and
         Prevention Magazine. She is the health advisor to The Ladies' Home
         Journal, and More magazines.

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

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

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

                                       10
<PAGE>


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

ALEXIS FITZSIMMONS, R. N.-C., B.S.N., M.S.N., W.H.N.P.
         Director, Women's Outpatient Center, Holy Name Hospital, Teaneck, NJ

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

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.

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 have 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 other than
Dr. Legato, they have received option grants totaling between 10,000 and 150,000
options.

In connection with her agreement to become Chairperson of the Company's Medical
Advisory Board effective March 24, 2000, Dr. Legato will be paid $250,000 over
the three year term of the agreement. In addition, the Company granted Dr.
Legato and her assignee options to purchase a total of 3,985,000 shares of
common stock of the Company at an exercise price of $0.875 per share. The
options have a term of five years and vested 20% upon grant, with an additional
20% vesting on each six month anniversary of the date of grant (with accelerated
vesting in the event of a sale of the Company), subject to Dr. Legato's
continued performance under the consulting agreement during the vesting period
with respect to the unvested portion of the options, except as provided in the
consulting agreement. The Company has agreed to register the shares underlying
the options granted to Dr. Legato under the Securities Act of 1933, as amended,
on a Form S-8 Registration Statement. Pursuant to Dr. Legato's consulting
agreement with the Company, options to purchase an additional 515,000 shares of
common stock of the Company, on substantially the same terms as Dr. Legato's
options, were granted to the Department of Medicine at Columbia University
College of Physicians and Surgeons and to certain persons who will assist Dr.
Legato in the performance of her duties under the consulting agreement.

                                       11
<PAGE>


PRINCIPAL CUSTOMERS

One customer, Life Plus International, was responsible for approximately $75,800
in sales for the year ended January 31, 2000, representing approximately 17% of
total sales. For the year ended January 31, 1999, two customers were responsible
for $523,000; Life Plus International for approximately $291,000 representing
approximately 31% of total sales and Family Health Network for approximately
$232,000 representing approximately 25% of total sales and in the year ended
January 31, 1998, two customers were responsible for approximately $540,300 in
sales, Life Plus International for approximately $400,000 representing
approximately 43% of total sales and Equinox International for approximately
$140,000, representing approximately 15% of total sales.

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 four 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.

COMPETITION

The market for nutritional supplements and Internet Sites concentrating on
health issues 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's Internet
site, womenshealthnetwork.com, will compete with other Internet sites focused on
women's health as well as sites focused on health care issues in general. While
the Company believes the health information market is large enough to support
many companies, the Company's ability to succeed will be dependent upon
providing compelling Internet content to attract users and develop brand name
recognition. The principal factors in attracting users will be dependent upon
the quality and depth of the information on the site and the ability to attract
users through various marketing approaches.

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.

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 most of the Company's
products are not protected by patents.

COPYRIGHTS. The Company has applied for copyright registration for the Womens
Health Network.com logo and the FemChoice brand. Proof of use has been filed and
the Company awaits final approval.

                                       12
<PAGE>


TRADEMARKS AND DOMAIN NAMES. The Company owns the FemChoice and
womenshealthnetwork.com, womanshealthnetwork.com, femchoice.com, whnnetwork.com,
menshealthnetwork.com, kidshealthnetwork.com, genderhealth.net, gendermed.com,
gendermed.net, genderspecificmed.com, genderspecificmed.net and
saluddemujer.com. domain names. The Company has registered the .cc for several
of these 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.

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.


TECHNOLOGY

The Company will rely upon third parties for its hardware and software. It is
the Company's intention to employ existing software to manage its proposed
e-commerce business. Effective March 29, 2000, the Company entered into two
agreements with New Light Productions in Hawthorne, New York. Pursuant to the
agreements, New Light will develop the web site and thereafter manage the site
for the Company. The development agreement calls for development of the web site
at a cost of $215,625.00 payable in four installments as follows: 25% ($53,906)
due upon work commencement; 25% ($53,906) due upon acceptance of design
document; 25% ($53,906) due upon acceptance of a working version of the site;
and 25%($53,906) due upon final acceptance of the site and related deliverables.
Management anticipates that the site will be operational by June 30, 2000.
Pursuant to the hosting agreement, New Light will host the site for one year for
a fee of $4590 payable as follows: $450 per month less a 15% discount.


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.

                                       13
<PAGE>


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 us 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.


EMPLOYEES

The Company presently has 5 employees. To support future anticipated growth, the
Company expects to hire additional employees, especially in the area of sales
and marketing.


RECENT DEVELOPMENT

In November 1999, the Company completed a private placement for the principal
amount of $1,521,250 of 10% Convertible Debentures ("Debentures") due October 1,
2000. Under the terms of the Debentures, the principal dollar amount is
convertible by the holders at $.075 per share. The Debentures must be converted
upon the Company amending its Certificate of Incorporation to increase its
authorized capitalization to not less than 35,000,000 shares of Common Stock.
The funds received by the Company will be adequate to conduct operations over
the next 12 months, however, in order to fully implement the Company's strategy,
the Company intends to seek additional capital in the second quarter of 2000.
There can be no assurance the Company will be successful.


PREVIOUS BUSINESS OPERATIONS

During the fiscal year ending January 31, 2000, the revenues generated by the
Company resulted from the sale of existing products, including pet products,
home remedy products and nutritional supplements.

                                       14
<PAGE>


Commencing in the first quarter of 2000, the Company intends to focus on the
sale of its new line of branded products FemChoice(TM) although it will continue
to sell its other products if ordered. The Company does not intend to
aggressively market its preexisting products.

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
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.

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

There were no matters submitted to a vote of security holders during the fourth
quarter of the fiscal year ended January 31, 2000.

                                       15
<PAGE>


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, 1998                    .3125                               .3125
April 30, 1998                        .40                                 .20
July 31, 1998                         .19                                .125
October 31, 1998                      .09                                .062
January 31, 1999                     .062                                .062
April 30, 1999                        .03                                 .03
July 31, 1999                         .07                                 .07
October 31, 1999                      .25                                 .25
January 31, 2000                    1.062                               1.062


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 March 31,2000, there were approximately 75 record holders
              of the Company's Common Stock.

         (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.

STATEMENTS OF OPERATIONS DATA:
<TABLE>
<CAPTION>
                                                                       YEAR ENDED JANUARY 31,
                                              -------------------------------------------------------------------------
                                                 2000           1999            1998            1997           1996
                                              -----------    -----------    -----------     ------------   ------------
<S>                                           <C>            <C>            <C>             <C>            <C>
Sales                                         $   443,200    $   939,700    $   932,900      1,032,900       1,320,500
Cost of sales and operating expenses            1,086,800        982,000      1,091,400      1,028,700       1,294,200
Operating (loss) income                          (643,600)       (42,300)      (158,500)         4,200          26,300
Other (expense)                                   (85,700)       (40,100)       (22,600)       (20,400)        (21,000)
(Loss) income from continuing operations         (729,300)       (82,400)      (181,100)       (16,200)          5,300
Income (loss) from discontinued operations             --         15,700        (25,500)            --              --
Extraordinary items                               485,100             --             --             --              --
Net (loss) income                                (244,200)       (66,700)      (206,600)       (16,200)          5,300

Basic Earnings Per share data:
        (Loss) from continuing operations          ($0.18)        ($0.02)        ($0.05)            --              --
        (Loss) from discontinued operations            --             --          (0.01)            --              --
        Extraordinary items                          0.12             --             --             --              --
        Net (Loss)                                  (0.06)         (0.01)         (0.05)            --              --
</TABLE>
                                       16
<PAGE>

BALANCE SHEET DATA:
<TABLE>
<CAPTION>
                                                                      YEAR ENDED JANUARY 31,
                                              ---------------------------------------------------------------------
                                                 2000           1999            1998         1997           1996
                                              -----------    -----------    -----------   ----------    -----------
<S>                                           <C>            <C>            <C>            <C>           <C>
Working capital(deficiency)                   $(1,038,300)   $  (585,300)   $  (564,100)   (295,500)     (254,000)
Total assets                                      795,100        148,200        667,000     230,600       258,000
Long-term debt                                         --         75,000         75,000     113,700       146,400
Stockholders' deficit                          (1,013,300)      (796,200)      (429,500)   (550,400)     (544,200)
</TABLE>

Item 7:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

                                JANUARY 31, 2000


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.

    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;
cost 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 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 year ended January 31, 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 year ended January 31, 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

                                       17
<PAGE>


year ended January 31, 2000, as compared to interest expense of $40,100 during
the comparable period of 1999 primarily due to interest on the $1,521,250
principal amount of 10% Convertible Subordinated Debentures outstanding.

    1999 - 1998

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.

The Company had an operating loss from continuing operations of $82,400 and a
net loss of $66,700 for the year ended January 31, 1999, as compared to an
operating loss of $181,100 and a net loss of $206,600 for the prior year. The
decrease in loss was primarily due to a decrease in general and administrative
expenses of $82,300.

Sales for the year ended January 31, 1999 increased by $6,800 or less than 1%
from $932,900 to 939,700. Cost of sales decreased by $28,200 or by 5% from
$555,900 to $527,700. This resulted in an increased gross profit margin from 40%
to 44%. Selling, general and administrative expenses decreased 15% from $535,500
to $453,200. This decrease was primarily due to a reduction in professional fees
and other costs associated with the KOS acquisition and incurred in the year
ended January 31, 1998.

The Company's loss from continuing operations decreased from $181,100 to $82,400
or approximately 55%. The loss from discontinued operations was $25,500 for the
year ended January 31, 1998 as compared to a gain of $15,700 for the current
year. The Company's net loss decreased to $66,700, or $.01 per share the year
ended January 31, 1999 as compared to a loss of $206,600 or $.05 per share in
the prior year.

LIQUIDITY AND CAPITAL RESOURCES

At January 31, 2000, the Company had cash of $649,700 as compared to cash of
$5,000 on January 31, 1999. During the first quarter of 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. During the year ended January 31, 2000, the Company completed the
private placement of $1,521,250 principal amount of 10% Convertible Subordinated
Debentures (including $390,000 of unsecured advances received during the second
quarter which were converted into 10% Convertible Subordinated Debentures). The
Convertible Subordinated Debentures are convertible into shares of common stock
at $.075 per share and the holders of the Convertible Subordinated Debentures
must automatically convert their debentures at such time as the Company amends
its certificate of incorporation to increase its authorized common stock (now
10,000,000) to an amount sufficient to permit the conversion of the debentures.
See Note 4 to notes to CONSOLIDATED FINANCIAL STATEMENTS. The Company will
require additional funds to complete the launch of its internet site and
commence marketing of its line of women's products. There can be no assurance
the Company will be successful in raising such funds and that if additional
funds are raised, that the Company's existing business operations will improve,
or that the development of the line of women's products and the website for
women's health will be successful. 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

                                       18
<PAGE>


THOSE IN FORWARD-LOOKING STATEMENTS ARE SET FORTH IN THE SAFE HARBOR COMPLIANCE
STATEMENT FOR FORWARD-LOOKING STATEMENTS SET FORTH BELOW. 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.

                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."

         THE COMPANY HAS A BROAD BUSINESS MODEL THAT WILL REQUIRE THE
DEVELOPMENT OF MANY DIFFERENT AREAS. IF THE COMPANY FAILS TO IMPLEMENT ANY OF
THE KEY ELEMENTS OF ITS BUSINESS PLAN, ITS BUSINESS MAY NOT SUCCEED.

The Company has embarked on an ambitious plan to provide products, educational
programs and support systems to women to help them make better decisions
regarding their health care. There is a limited market awareness of the Company
and the products and services it offers. To be successful, the Company must
continue to develop, coordinate and balance various elements of its business.
Among other things, the Company must:

         -        generate market demand for the products it offers, prepare and
                  disseminate information about women's health care and
                  establish the FEM CHOICE brand,

         -        convince OB/GYNs and the nurse practitioners and physician
                  assistants focused on women's health to recommend the products
                  the Company offers,

                                       19
<PAGE>


         -        maintain and obtain rights to market and distribute products
                  and integrate them into its business, and

         -        augment sales and marketing and manage different distribution
                  channels for the products it offers.

If the Company fails to implement any of these key elements of its business
plan, its business may not succeed.

         IF WOMEN DO NOT USE AND THEIR CLINICIANS DO NOT RECOMMEND 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 its marketing programs and the growth
in its target market will result in increased demand for the products it offers.
If its 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 OB/GYNs and the nurse practitioners and physician assistants
focused on women's health, and its marketing efforts are concentrated on this
group. If the clinicians the Company targets do not recommend the products the
Company offers or if women do not regularly use these products, the Company may
experience significant losses and its business will be adversely affected.
Moreover, if the Company fails to develop the market-wide brand identity for FEM
CHOICE that it is seeking, its business will be adversely affected.

         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 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.

                                       20
<PAGE>


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 women 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 sites focused on women's
health as well as 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.

         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.

         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 face 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 adversely 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.

                                       21
<PAGE>


         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 may require significant amounts of additional capital to achieve its
goals. The Company believes that the net proceeds from the Company's recent
private offering of convertible debentures will be sufficient to meet its
working capital and capital expenditure requirements through the end of calendar
year 2000. 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 clinicians and women,

         -        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 or educational 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."

         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.

         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.

                                       22
<PAGE>


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.

         INTERNET CAPACITY CONSTRAINTS MAY IMPAIR THE ABILITY OF CONSUMERS TO
ACCESS THE COMPANY'S INTERNET SITE.

The Company's success will depend, in large part, upon a robust communications
industry and infrastructure for providing Internet access and carrying Internet
traffic. The Internet may not prove to be a viable commercial medium because of:
inadequate development of the necessary infrastructure such as a reliable
network backbone, failure to timely develop complementary products such as high
speed modems, delays in the development or adoption of new standards and
protocols required to handle increased levels of Internet activity, or increased
government regulation.

If the Internet continues to experience significant growth in the number of
users and the level of use, then the Internet infrastructure may not be able to
continue to support the demands placed on it.

         THE COMPANY'S BUSINESS IS DEPENDENT ON THE CONTINUOUS, RELIABLE AND
SECURE OPERATION OF ITS INTERNET WEBSITE AND THE RELATED TOOLS AND FUNCTIONS IT
PROVIDES.

The Company relies on the Internet and, accordingly, depends upon the
continuous, reliable and secure operation of Internet servers and related
hardware and software. Recently, several large Internet commerce companies have
suffered highly publicized system failures which resulted in adverse reactions
to their stock prices, significant negative publicity and, in certain instances,
litigation. To the extent that the Company's service is interrupted, its users
will be inconvenienced, its commercial customers will suffer from a loss in
advertising or transaction delivery and its reputation may be diminished. Some
of these outcomes could directly result in a reduction in the Company's stock
price, significant negative publicity and litigation. The computer and
communications hardware utilized by the Company are protected through physical
and software safeguards. However, they are still vulnerable to fire, storm,
flood, power loss, telecommunications failures, physical or software break-ins
and similar events. The Company's business interruption insurance may be
inadequate to protect it in the event of a catastrophe. The Company also depends
upon third parties to provide potential users with web browsers and Internet and
on-line services necessary for access to the Company's Internet site. The
Company's site users may occasionally experience difficulties with Internet and
other on-line services due to system failures, including failures unrelated to
the systems utilized by the Company. Any sustained disruption in Internet access
provided by third parties could adversely impact the Company's business.

                                       23
<PAGE>


Item 8:  FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

                         REPORT OF INDEPENDENT AUDITORS

To the Board of Directors of
The MNI Group Inc.

         We have audited the accompanying consolidated balance sheet of The MNI
Group Inc. as of January 31, 2000 and the related consolidated statements of
operations, stockholders' deficit, and cash flows for the year 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 The MNI Group Inc. as of January 31, 1999
and 1998, 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 The MNI Group Inc.
as of January 31, 2000, and the results of its operations and cash flows for the
year 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 7, 2000

                                       24
<PAGE>
<TABLE>
<CAPTION>
                                                THE MNI GROUP INC.
                                           CONSOLIDATED BALANCE SHEETS

                                       ASSETS

                                                                                                     January 31,
                                                                                            --------------------------
                                                                                               2000            1999
                                                                                            -----------    -----------
<S>                                                                                         <C>            <C>
Current assets:
  Cash                                                                                      $   649,700    $     5,000
  Accounts receivable (net of allowance for doubtful
    accounts of $0 in 2000 and 1999)                                                             14,000         86,800
  Inventories                                                                                    83,400         40,300
  Other current assets                                                                           23,000          1,100
                                                                                            -----------    -----------
      Total current assets                                                                      770,100        133,200
                                                                                            -----------    -----------

Fixed assets, net of accumulated depreciation of $91,100 and
  $120,000, respectively                                                                          9,800             --
Other assets:
  Security deposits                                                                              15,200         15,000
                                                                                            -----------    -----------

                                                                                            $   795,100    $   148,200
                                                                                            ===========    ===========

                         LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
  Accounts payable and accrued expenses                                                     $   226,100    $   437,300
  Notes payable - short term portion                                                             61,000         84,900
  10% convertible subordinated debentures                                                     1,521,300             --
  Loans payable - officers                                                                           --        196,300
                                                                                            -----------    -----------
      Total current liabilities                                                               1,808,400        718,500
                                                                                            -----------    -----------

Notes payable (net of short-term portion)                                                            --         75,000
Minority interest in subsidiary                                                                      --        150,900
                                                                                            -----------    -----------
      Total long-term liabilities                                                                    --        225,900
                                                                                            -----------    -----------
      Total liabilities                                                                       1,808,400        944,400
                                                                                            -----------    -----------

Stockholders' deficit:

Common stock, no par value; 10,000,000 shares authorized; 4,110,709 shares
issued and outstanding at January 31, 2000; 4,085,709 shares issued and
outstanding at January 31, 1999                                                               7,313,900      7,276,400
Accumulated deficit                                                                          (8,316,800)    (8,072,600)
                                                                                            -----------    -----------
                                                                                             (1,002,900)      (796,200)
Less: Treasury stock, at cost                                                                   (10,400)            --
                                                                                            -----------    -----------
      Total stockholders' deficit                                                            (1,013,300)      (796,200)
                                                                                            -----------    -----------

                                                                                            $   795,100    $   148,200
                                                                                            ===========    ===========

                               The accompanying notes are an integral part hereof.
</TABLE>
                                                       25
<PAGE>
<TABLE>
<CAPTION>
                                                THE MNI GROUP INC.
                                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                                  Years Ended January 31,
                                                                       -----------------------------------------
                                                                           2000           1999           1998
                                                                       -----------    -----------    -----------
<S>                                                                    <C>            <C>            <C>
Sales                                                                  $   443,200    $   939,700    $   932,900
                                                                       -----------    -----------    -----------

Cost of sales and operating expenses:
  Cost of merchandise sales                                                267,600        527,700        555,900
  Selling, general and administrative expenses                             645,600        453,200        535,500
  Web site development cost                                                167,200             --             --
  Advertising expense                                                        6,400          1,100             --
                                                                       -----------    -----------    -----------

     Total cost of sales and operating expenses                          1,086,800        982,000      1,091,400
                                                                       -----------    -----------    -----------

Operating (loss)                                                          (643,600)       (42,300)      (158,500)
                                                                       -----------    -----------    -----------

Other income (expense):
  Interest income                                                            9,000             --             --
  Interest (expense)                                                       (94,700)       (40,100)       (22,600)
                                                                       -----------    -----------    -----------
      Total other income (expense)                                         (85,700)       (40,100)       (22,600)
                                                                       -----------    -----------    -----------

(Loss) from continuing operations                                         (729,300)       (82,400)      (181,100)
Discontinued operations:
   Income (loss) from discontinued operations                                   --         15,700        (25,500)
                                                                       -----------    -----------    -----------

Net (loss) before extraordinary items and provision for income taxes      (729,300)       (66,700)      (206,600)

Extraordinary items:
   Foregiveness of debt                                                    337,500             --             --
   Extinguishment of minority interest                                     147,600             --             --
                                                                       -----------    -----------    -----------
Net income from extraordinary items                                        485,100             --             --
                                                                       -----------    -----------    -----------

(Loss)before provision for income taxes                                   (244,200)       (66,700)      (206,600)
Provision for income taxes                                                      --             --             --
                                                                       -----------    -----------    -----------

Net (loss)                                                               ($244,200)      ($66,700)     ($206,600)
                                                                       ===========    ===========    ===========

Basic (loss) per common share:
  (Loss) from continuing operations                                          ($.18)         ($.02)         ($.05)
                                                                       ===========    ===========    ===========
   Income (loss) from discontinued operations                                   --             --          ($.01)
                                                                       ===========    ===========    ===========
   Net income from extraordinary items                                        $.12             --             --
                                                                       ===========    ===========    ===========
   Net (loss)                                                                ($.06)         ($.01)         ($.05)
                                                                       ===========    ===========    ===========

Weighted average number of shares outstanding                            3,979,015      4,635,709      3,913,175
                                                                       ===========    ===========    ===========

                               The accompanying notes are an integral part hereof.
</TABLE>
                                                       26
<PAGE>
<TABLE>
<CAPTION>
                                                    THE MNI GROUP INC.
                                     CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                       YEARS ENDED JANUARY 31, 2000, 1999 AND 1998



                                                        Common Stock           Accumulated      Treasury         Total
                                                    Shares        Amount         Deficit         Stock          Equity
                                                 -----------    -----------    -----------    -----------    -----------
<S>                                                <C>          <C>            <C>                     <C>     <C>
Balance, January 31, 1997                          3,810,709    $ 7,248,900    ($7,799,300)            --      ($550,400)

Issuance of shares for acquisition of
subsidiary                                           600,000        300,000             --             --        300,000

Exercise of warrants                                 275,000         27,500             --             --         27,500

Net (loss)                                                --             --       (206,600)            --       (206,600)
                                                 -----------    -----------    -----------    -----------    -----------

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)
                                                 -----------    -----------    -----------    -----------    -----------

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

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

Net (loss)                                                --             --       (244,200)            --       (244,200)
                                                 -----------    -----------    -----------    -----------    -----------

Balance, January 31,2000                           4,110,709    $ 7,313,900    ($8,316,800)      ($10,400)   ($1,013,300)
                                                 ===========    ===========    ===========    ===========    ===========

                                   The accompanying notes are an integral part hereof.
</TABLE>
                                                           27
<PAGE>
<TABLE>
<CAPTION>
                                                    THE MNI GROUP INC.
                                          CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                        Years Ended January 31,
                                                                              -----------------------------------------
                                                                                  2000          1999            1998
                                                                              -----------    -----------    -----------
<S>                                                                           <C>            <C>            <C>
Cash flows from operating activities:
  Net (loss)                                                                  ($  244,200)   ($   66,700)   ($  206,600)
  Adjustments to reconcile net (loss) to
    net cash provided (used) by operating
    activities:
      Extraordinary items:
        Foregiveness of debt                                                     (337,500)            --             --
        Extinguishment of minority interest                                      (147,600)            --             --
      Payment by common stock for services                                         37,500             --             --
      Depreciation and amortization                                                (2,500)         1,200          1,400
      Net gain on discontinued operations                                              --        (15,700)            --
      Changes in working capital items:
       (Increase) decrease in accounts receivable                                  72,800         44,600         (5,500)
       (Increase) decrease in inventories                                         (43,100)        85,800        (64,700)
       (Increase) decrease in other assets                                        (21,900)         6,700          4,100
       (Increase) decrease in security deposits                                      (200)           700           (200)
        Increase (decrease) in accounts payable
          and accrued expenses                                                     51,300       (121,200)       157,600
                                                                              -----------    -----------    -----------
Net cash (used) by operating activities                                          (635,400)       (64,600)      (113,900)
                                                                              -----------    -----------    -----------

Cash flows from investing activities:
  Purchase of equipment                                                           (10,600)        (4,000)            --
  Goodwill adjustment                                                                  --         63,300        (52,000)
                                                                              -----------    -----------    -----------
Net cash (used) provided by investing activities                                  (10,600)        59,300        (52,000)
                                                                              -----------    -----------    -----------

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                                 (172,500)        48,700         76,500
  (Decrease) increase in short-term debt                                          (47,700)       (75,300)       124,500
  Proceeds from exercise of warrants                                                   --             --         27,500
  Proceeds from sale of debentures                                              1,521,300             --             --
  (Decrease) in long-term debt                                                         --             --        (38,700)
                                                                              -----------    -----------    -----------
Net cash provided (used) by financing activities                                1,290,700        (26,600)       189,800
                                                                              -----------    -----------    -----------

Increase (decrease) in cash                                                       644,700        (31,900)        23,900
Cash, beginning of year                                                             5,000         36,900         13,000
                                                                              -----------    -----------    -----------

Cash, end of year                                                             $   649,700    $     5,000    $    36,900
                                                                              ===========    ===========    ===========

Supplemental information:
  Cash expended for:
    Interest expense                                                          $    32,600    $    32,400    $    22,600
    Federal income taxes                                                               --             --             --
  Non-cash transactions:
    Value of shares issued for acquisition of subsidiary
                                                                                       --             --    $   300,000
    Value of shares reacquired from reversal of
      acquisition of subsidiary                                                        --    ($  300,000)            --

                                   The accompanying notes are an integral part hereof.
</TABLE>
                                                           28
<PAGE>


                               THE MNI GROUP INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                JANUARY 31, 2000


Note 1. ORGANIZATION AND BUSINESS:

        The MNI Group Inc. (MNI), 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 weight control, 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.

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 and does not include any of the activities of KOS.
     Certain amounts in the January 31, 1999 and 1998 financial statements were
     reclassified to conform to the January 31, 2000 presentation.

        The consolidated statements of operations for the years ended January
     31, 1999 and 1998, 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) because the Company incurred a net loss in those years, and has
     substantial net operating loss carryforwards.

        INVENTORIES - Inventories, which consist primarily of purchased finished
     products, 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:

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

                                       29
<PAGE>


Note 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

        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 January 31, 2000, such costs have been incurred during the
     preliminary project stage and, accordingly, have been expensed.

        REVENUE RECOGNITION - The Company recognizes revenue when its products
    are shipped.

        EARNINGS PER SHARE - The consolidated financial statements are presented
     in accordance with Statement of Financial Accounting Standards No. 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 No. 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.

        STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 123 - The Company
     applies APB Opinion 25 "Accounting for Stock Issued to Employees", and
     related Interpretations in accounting for its stock based compensation.
     Accordingly, no expense has been recorded for stock options issued.

Note 3. FIXED ASSETS:

        Fixed assets consisted of the following at January 31, 2000 and 1999,
respectively:

                                                             January 31,
                                                      -------------------------
                                                         2000            1999
                                                      ---------       ---------
                    Furniture, fixtures and equipment $  75,800       $  73,300
                    Leasehold improvements               25,100          17,700
                    Promotional video                        --          29,000
                                                      ---------       ---------
                                                        100,900         120,000
                    Less:  accumulated depreciation
                      and amortization                   91,100         120,000
                                                      ---------       ---------

                                                      $   9,800       $      --
                                                      =========       =========

Note 4. NOTES PAYABLE:

        In November 1991, Family Weight Loss Centers, Inc. (FWLC), (a former
     subsidiary of MNI), 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.

                                       30
<PAGE>


        Subsequent to the bankruptcy filing, MNI 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. The note is currently in default and the Company
     is discussing a payoff settlement with Fleet Bank. Interest on this debt
     was $3,822, $2,788, and $4,939 for the years ended January 31, 2000, 1999
     and 1998, 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, the
     terms of this loan were changed to a demand note. Principal and interest
     payments are being made on a monthly basis. Interest paid during the year
     ending January 31, 2000 was approximately $3,800. At January 31, 2000, the
     outstanding balance was $37,200.

       In December 1992, LN Investment Capital Limited Partnership (LNIC)
     advanced $75,000 to the Company. Mr. Michael Connelly, who at the time of
     the loan was the Chairman of the Company's Board of Directors, is President
     of LNIC. This loan was originally due on July 31, 1993, and, in accordance
     with the terms of the loan agreement, was extended and converted to a
     demand note, with interest at 10% per annum. In addition, under the
     original loan terms, LNIC received warrants to purchase 300,000 shares of
     the Company's common stock at an exercise price of $.25 per share. Upon
     LNIC's agreement to extend the note, the warrant exercise prices were
     reduced and the number of warrants increased.

        In the year ended January 31, 1998, 275,000 warrants were exercised at
     $.10 per share (see Note 6). The exercise of these warrants is reflected in
     the capitalization of the Company as of January 31, 1998.

        During the year ended January 31, 2000, Mr. Connelly tendered his
     resignation as Chairman of the Board. Concurrently, the Company entered
     into a settlement agreement with LNIC, whereby the loan and accrued
     interest were foregiven (see Note 10).

        A summary of the Company's notes payable at January 31, 2000 and 1999 is
as follows:
<TABLE>
<CAPTION>
                                      January 31, 2000               January 31, 1999
                               ----------------------------     -------------------------
                                Short-term       Long-term      Short-term      Long-term
                               -----------       ----------     ----------      ---------
<S>                            <C>               <C>            <C>             <C>
     Fleet Bank, NA            $    23,800       $       --     $   24,000      $      --
     PNC Bank                       37,200                          42,900
     Advanta Bank Corp.                 --               --         18,000             --
     LN Investment Capital
       Ltd. Partnership                 --               --             --         75,000
                               -----------       ----------     ----------      ---------
                               $    61,000       $       --     $   84,900      $  75,000
                               ===========       ==========     ==========      =========
</TABLE>
     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 (including $390,000 of unsecured advances received during the second
     quarter which were converted into 10% Convertible Subordinated Debentures).

                                       31
<PAGE>


     Under the terms of the Debentures, the principal dollar amount is
     convertible by the holders at $.075 per share. The Debentures must be
     converted upon the Company amending its Certificate of Incorporation to
     increase its authorized capitalization to not less than 35,000,000 shares
     of Common Stock. The Company expects the recapitalization to be approved by
     the stockholders at its next annual meeting. At January 31, 2000, the
     Company has accrued to the debenture holders interest payable amounting to
     $58,200.

     Loans Payable - Officer

         From time to time 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
     $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.

Note 5. LEASE COMMITMENTS:

        MNI 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, 2000, 1999 and
     1998 was approximately $65,600, $77,300 and $83,000, respectively. MNI
     sub-leases (on a month to month basis) a portion of its facility to various
     entities at an annual rental income of approximately $34,600, $41,000 and
     $43,000 for the year ended January 31, 2000, 1999 and 1998, respectively.
     The future minimum annual rents are as follows:
<TABLE>
<CAPTION>
                               Year ended January 31,:
<S>                                                                          <C>            <C>
                                                                             2001           $ 65,600
                                                                             2002             65,600
                                                                             2003             65,800
                                                                             2004             67,500
                                                                             2005             61,900
                                                                                            --------
                               Total minimum annual rent payments                           $326,400
                                                                                            ========

        The Company leases equipment under various operating leases. During the
     year ended January 31, 2000, the total payments under such leases were
     $16,700. The future minimum annual lease payments are as follows:

                               Year ended January 31,:

                                                                             2001           $ 16,600
                                                                             2002              6,200
                                                                                            --------
                               Total minimum annual rent payments                           $ 22,800
                                                                                            ========
</TABLE>
Note 6. STOCKHOLDERS' EQUITY:

        In January 1990, MNI adopted its Incentive and Nonqualified Stock Option
     Plan (the "Plan"), to which options for an aggregate of 175,000 shares of
     common stock may be granted to key employees and certain other persons. The
     Plan terminated on November 28, 1999. During 1993, MNI issued 50,000
     options under this plan, exercisable at $.10 per share. These were
     subsequently replaced with new options in 1994. The new options were not
     exercised and expired in 1999.

                                       32
<PAGE>


        In February 1992, in connection with the bankruptcy of FWLC (see Note 4)
     the Company issued warrants to purchase 750,000 shares of the Company's
     common stock to Fleet Bank. The warrants are exercisable at $.01 per share
     and expire in February 2002. At January 31, 2000, none of the options were
     exercised.

        In March 1992, three officers and directors of MNI were granted options
     to immediately purchase 125,000 shares each and an additional 150,000
     options each to be granted over the next 60 months at a rate of 2,500 per
     month per officer and director. The options are exercisable at $.10 per
     share. Upon the resignation of one of the officers, 150,000 of the
     aforementioned additional options were cancelled. Additionally, the
     original 125,000 options issued to this officer expired in 1999. The
     options issued to the remaining two officers (275,000 each), were extended
     in 1999 to November 2004. At January 31, 2000. none of the options were
     exercised.

        During 1993, MNI issued warrants to purchase 125,000 shares of its
     common stock in exchange for the elimination of approximately $41,000 of
     accounts payable. These warrants are exercisable at $.10 per share and
     expired in February 1999. These warrants were not exercised. In addition,
     156,500 warrants were issued to a financial advisor as compensation for
     services rendered in conjunction with the private placement offering of
     NutraPet. These warrants were exercisable at $.125 per share. In March
     1999, the options were unexercised and expired.

        During 1994, an officer of MNI was issued 35,000 fully-vested options at
     an exercise price of $.10 per share. In addition, 15,000 previously issued
     options exercisable at a price of $2.00 were cancelled, and 15,000 options
     subject to a three-year vesting and exercisable at a price of $.10 per
     share were issued. In addition, consultants to MNI were issued 40,000
     options exercisable at $.10 per share. None of the options were exercised
     and all expired in March and September 1999.

       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, 2000, none of the options were exercised.

        In August 1997, in conjunction with the acquisition of KOS, two
     shareholders were granted options to purchase 900,000 shares of MNI's stock
     exercisable at $.50 per share. These options were to expire on December 31,
     2001. These options were recalled upon the completion of the reversal of
     the acquisition effective December 31, 1998.

        During the fiscal year ended January 31, 1998, one option holder
     exercised options for 275,000 shares at $.10 per share. This has been
     reflected in the capital accounts and in the consolidated statement of
     stockholders' equity.

       During 1999, the Company issued options to a consultant to purchase
     250,000 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
     exercisable at $.10 per share and expire November 2004. At January 31,
     2000, 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, 2000, none of the options were exercised.

                                       33
<PAGE>


       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, 2000, none
     of the options were exercised.

       In October 1999, five individuals, including several proposed nominees
     for directorships and the Chairman 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 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.

        In November 1999, options to purchase 335,000 shares of the Company's
     common stock were issued to various medical consultants. Such options
     expire on November 1, 2009. At January 31, 2000, 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, 2000, none of the options were
     exercised.

Note 7. INCOME TAXES:

        The Company has adopted the liability method of accounting for income
     taxes pursuant to Statement of Financial Accounting Standards No. 109
     "Accounting for Income Taxes". No recognition has been made of the possible
     benefits of available net operating loss carryforwards due to the
     uncertainties that such benefits will be available to be used to offset
     future years' income. MNI and its subsidiaries have net operating loss
     carryforwards in excess of $8,000,000 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 $2,911,000 as of January 31, 2000, with a valuation allowance
     of an equal amount as follows:
<TABLE>
<CAPTION>
                                                           Year Ended January 31,
                                                2000              1999               1998
                                            ------------      ------------       ------------
<S>                                         <C>               <C>                <C>
        Deferred tax asset                  $  2,911,000      $  1,720,000       $  1,700,000
        Allowance for deferred tax asset      (2,911,000)       (1,720,000)        (1,700,000)
                                            ------------      ------------       ------------
        Net deferred tax asset              $         --      $         --       $         --
                                            ============      ============       ============
</TABLE>
                                       34
<PAGE>


Net operating losses expire during various years as follows:

            Years ending prior to January 31, 2006                  $4,047,800
            Year ending January 31, 2007                             2,932,000
            Year ending January 31, 2008                               486,300
            Year ending January 31, 2009                                31,600
            Year ending January 31, 2010                               310,500
            Year ending January 31, 2011                                16,200
            Year ending January 31, 2012                                16,200
            Year ending January 31, 2017                               232,000
            Year ending January 31, 2018                               244,200
                                                                    ----------
                                                                    $8,316,800
                                                                    ==========

Note 8. COMMITMENTS AND CONTINGENCIES:

         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
     lawsuits. In addition, it has no commitments to its vendors for the
     purchase of either raw materials or finished product.

     Going Concern

        As shown in the accompanying financial statements, the Company's
     revenues have decreased from $939,700 to $443,200, and losses from
     operations have increased from ($66,700) to ($729,300). 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 an
     additional $750,000 of subordinated convertible debentures, which is
     expected to be completed by June 30, 2000 (during the year ended January
     31, 2000 the Company sold approximately $1.5 million of its subordinated
     convertible debentures).

       Managements' efforts and the Company's resources have been directed
     toward the development of its non-biased gender based womens' healthcare
     Internet web site. This site is expected to be launched in June 2000 and
     will provide a medium to reach 1) a women specific targeted market for the
     Company's products, and 2) a healthcare professional market
     (e.g.-physicians, dieticians, etc.) for video-streaming based continuing
     medical education courses. Additionally, the Company has affiliated itself
     with several of the most prestigious womens' healthcare professionals in
     the country as both consultants and board of director members. Finally, the
     Company has begun discussions with prominent healthcare professionals
     interested in bringing the Company's products to the public in conjunction
     with their own direct sales and marketing efforts.

        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

                                       35
<PAGE>


     plan to expand operations. The Company anticipates that the proceeds from
     the forthcoming sale of debentures as discussed above will provide the
     necessary funds it requires for the balance of the year ending January 31,
     2001. The financial statements do not include any adjustments that might be
     necessary if the Company is unable to continue as a going concern.

Note 9. MAJOR CUSTOMERS:

        One customer was responsible for approximately $75,800 in sales for the
     year ended January 31, 2000, representing approximately 17% of total sales.
     For the years ended January 31, 1999, and 1998, two customers were
     responsible for approximately $523,000 and $540,300 in sales, respectively,
     representing approximately 56% and 43% of total sales, respectively.

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.

     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. SUBSEQUENT EVENTS:

        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.

        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 options to purchase 515,000 shares of the Company's
     common stock on substantially the same terms to the Department of Medicine
     at Columbia University College of Physicians and Surgeons.

                                       36
<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, 2000

                                    Nutritional                                         Adjustment
                                       Support          Holistic         Animal             &
                                      Products          Products        Products        Elimination         Consolidated
                                    -----------        ---------       ---------        -----------         ------------
<S>                                  <C>               <C>             <C>               <C>                  <C>
 Revenues:
 From unaffiliated
   customers                         $  232,300        $ 104,100       $ 106,800                              $ 443,200
                                     ==========        =========       =========                              =========
 (Loss) from operations before
 discontinued operations and
 extraordinary item                   ($777,100)       $  50,400         ($2,600)                            ($ 729,300)
                                     ==========        =========       =========                              =========
 Identifiable assets at
 January 31, 2000                    $1,087,000        $  63,200       $ 237,000         ($ 592,100)          $ 795,100
                                     ==========        =========       =========         ==========           =========
</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 results of operations for each of the quarters
     of the years ended January 31, 2000 and 1999:

   January 31, 2000:        First        Second         Third         Fourth
                         ----------    ----------    ------------    ---------

Revenue                  $   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    ($304,600)
                         ==========    ==========    ============    =========
Net  Income(Loss) per
common share             ($     .03)   ($     .02)   $        .07        ($.08)
                         ==========    ==========    ============    =========

   January 31, 1999:

Revenue                  $  368,500    $  299,200    $    271,000    $   1,000
                         ==========    ==========    ============    =========
Gross profit             $  128,400    $  106,700    $     84,500    $  92,400
                         ==========    ==========    ============    =========
Net Income (Loss)          ($55,200)     ($80,500)       ($51,100)   $ 120,100
                         ==========    ==========    ============    =========
Net  Income(Loss) per
common share                  ($.01)        ($.02)          ($.01)   $     .03
                         ==========    ==========    ============    =========

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

          The Company has replaced its prior auditor. Reference is made to form
8-K filed March 24, 2000.

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          57                Chairman (1) and Director
Arnold Gans                65                President
Myra Gans                  62                Executive Vice President/Director

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

                                       37
<PAGE>


LAWRENCE BURSTEIN is and since March 1996 has been President, a director and the
principal shareholder of Unity Venture Capital Associates, a private investment
banking firm. He is also a director of CAS Medical Systems, Inc. engaged in the
manufacture and marketing of disposable medical devices, T.H.Q., Inc., a
developer of electronic game cartridges, Quintel Communications, Inc., a direct
marketing company and ID Systems, Inc., a manufacturer of wireless tracking
devices. Mr. Burstein became Chairman of MNIG in July 1999 upon the resignation
of the former Chairman.

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. Prior to thereto, Mrs.
Gans served as Vice President/Sales for Control Drug, Inc.

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.

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. Based solely on review of the copies of such reports
furnished to the Company, or written representations that no other reports were
required, the Company believes that during Fiscal Year 1999, 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, 2000, 1999, & 1998 respectively, to the
              Company's Chief Executive Officer and Executive Vice President.

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION   ANNUAL COMPENSATION  LONG TERM COMPENSATION AWARDS(b)
                              -------------------  --------------------------------
                              YEAR       SALARY            STOCK OPTIONS
                              ----      --------           -------------
<S>                           <C>       <C>                   <C>
Arnold Gans
    President (CEO)           2000      $140,000              750,000 (a)
                              1999      $140,000
                              1998      $140,000
Myra Gans
   Executive Vice President   2000      $ 85,000              750,000 (a)
     & Secretary              1999      $ 85,000
                                        $ 85,000
</TABLE>
                                       38
<PAGE>


(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.

                 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                          $1,346,800        $
Myra Gans (a)      1,400,000                          $1,346,800        $

---------
(a)      includes 750,000 options owned jointly by Mr.and Mrs. Gans
<TABLE>
<CAPTION>
                                            OPTIONS GRANT IN LAST FISCAL YEAR
-----------------------------------------------------------------------------------------------------------------------
                                                                                           Potential realizable value
                                                                                           at assumed annual rates of
                                                                                            stock price appreciation
                                                                                               for option term(1)
  Individual Grants
-----------------------------------------------------------------------------------------------------------------------
                                               Percent
                                               of total
                             Number          options/SARs
                         of securities         granted
                           underlying             to           Exercise
                          option/SARs         employees         or base
                            granted           in fiscal          price       Expiration       5%            10%
Name                          (#)                year           ($/Sh)          date       ($)$ (2)       ($)$(2)
-----------------------------------------------------------------------------------------------------------------------
<S>                         <C>                 <C>              <C>           <C>         <C>          <C>
Arnold Gans                 750,000             87.6%            $0.10         11/04       $920,837     $1,161,982
-----------------------------------------------------------------------------------------------------------------------
Myra Gans                   750,000             87.6%            $0.10         11/04       $920,837     $1,161,982
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
1.       In accordance with Securities and Exchange Commission rules, these
         columns show gains that might exist for the respective options,
         assuming that the market price of MNI common stock appreciates from the
         date of grant over a period of 10 years at the annualized rates of 5%
         and 10%, respectively. If the stock price does not increase above the
         exercise price at the time of exercise, realized value to the named
         executives from these options will be zero.

2.       Only reflects a five year period in accordance with the expiration date
         of the options.

                                       39
<PAGE>


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.

(e)   TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS

        None.


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, 2000 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)                   39.0%
10-West Forest Avenue,
Englewood, NJ 07631

Myra Gans                          2,399,830(2)                   39.0%
10 West Forest Avenue,
Englewood, New Jersey 07631

Lawrence Burstein                      2,750 (3)                  0.04%
245 Fifth Avenue,
New York, New York 10016

All directors and executive
officers as a group
(3 persons)(2) - (3)               2,402,580 (2) - (3)            39.0%


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

(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.

                                       40
<PAGE>


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 $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.

                                       41
<PAGE>


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

 3.1          Certificate of Incorporation of the Registrant (incorporated by
              reference to Exhibit 3.1 to the Registrant's Registration
              Statement on Form S-18, File No. 33-32438-NY (the "Registration
              Statement"))
 3.2          Certificate of Amendment to Certificate of Incorporation of
              Registrant (incorporated by reference to Exhibit 3.2 to the
              Registration Statement)
 3.3          Certificate of Amendment to Certificate of Incorporation of
              Registrant (incorporated by reference to Exhibit 3.3 to the
              Registration Statement)
 3.4          Bylaws of the Registrant (incorporated by reference to Exhibit 3.4
              to the Registration Statement)
 4            Form of Senior Subordinated Convertible Debenture, dated as of
              October 1999 (filed herewith)
10.1(a)       Lease for premises located at 10 West Forest Avenue, Englewood,
              New Jersey 07631 dated October 4, 1984 between Registrant and Van
              Brunt Associates (incorporated by reference to Exhibit 10.3 to the
              Registration Statement)
10.1(b)       Amendment to Lease (filed herewith)
10.2          Web Design and Consulting Agreement, dated as of March 29, 2000,
              between the Registrant and Keepsmart.com (filed herewith)
10.3          Web Hosting Services Agreement, dated as of March 29, 2000,
              between the Registrant and Keepsmart.com (filed herewith)
10.4          Consulting Services Agreement, dated March 24, 2000, by and
              between the MNI Group Inc. and Marianne J. Legato, M.D.
              (incorporated by reference to Exhibit 10.1 to the Registrant's
              Current Report on Form 8-K dated as of March 24, 2000 (the "March
              8-K"))
10.5          Non-Qualified Stock Option Agreement, dated March 24, 2000,
              between The MNI Group Inc. and Marianne J. Legato (incorporated by
              reference to Exhibit 10.2 to the March 8-K)
 21           Subsidiaries of the Registrant (filed herewith)
 23           Consent of Lipner Gordon & Co.(filed herewith)
 27           Financial Data Schedule (filed herewith)

                                       42
<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 28, 2000          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 28, 2000
Lawrence Burstein


 /s/ ARNOLD GANS                 President (Principal
-------------------------------  Operating Officer and
Arnold Gans                      Principal Accounting
                                 and Financial Officer)          April 28, 2000


 /s/ MYRA GANS                   Vice President,
-------------------------------  Secretary, and Director         April 28, 2000
Myra Gans

                                       43