<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                  FORM 10-Q/A


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


                  FOR THE QUARTERLY PERIOD ENDED APRIL 30, 1998

                         COMMISSION FILE NUMBER 1-13099


                              THE MAXIM GROUP, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


           Delaware                                      58-2060334
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)


210 TownPark Drive, Kennesaw, Georgia                               30144
----------------------------------------                   ---------------------
(Address of principal executive offices)                         (Zip Code)

Registrant's telephone number, including area code            (678) 355-4000
                                                           ---------------------

N/A
--------------------------------------------------------------------------------
(Former name, former address, and former fiscal year, if changed since last
report)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the last 90 days.

         Yes                                          No     X
             ---------                                   ---------

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date:

<TABLE>
<CAPTION>
   Common Stock, $.001 par value                          19,038,347
-----------------------------------           ---------------------------------
<S>                                           <C>
               Class                             Outstanding at October 1, 1999
</TABLE>
Explanatory Note:

During the course of the fiscal 1999 year-end financial audit process, The Maxim
Group, Inc. ("Maxim" or the "Company") recorded certain adjustments to its
previously reported interim results. The most significant of the adjustments
affecting the quarterly period ended April 30, 1998 related to certain vendor
support funds and the gain on the sale of equipment recognized in the Company's
operating results during the quarter. It was determined that certain revenue
related to vendor support funds was incorrectly recorded and that the gain
on the sale of certain equipment should be recognized in the quarter ended July
31, 1998.

As a result of the adjustments recorded by the Company, the Company has revised
its reported results of operations downward for the quarter ended April 30,
1998. This Form 10-Q/A reflects the effects of these adjustments.

The following Items are amended hereby:

PART I -- FINANCIAL INFORMATION:

     Item 1.    Financial Statements.

     Item 2.    Management's Discussion and Analysis of Financial Condition and
                Results of Operations.

PART II -- OTHER INFORMATION

     Item 6.    Exhibits and Reports on Form 8-K.


<PAGE>   2
PART I--FINANCIAL INFORMATION

ITEM 1--FINANCIAL STATEMENTS

                     THE MAXIM GROUP, INC. AND SUBSIDIARIES


                      CONDENSED CONSOLIDATED BALANCE SHEETS

                  (In Thousands, Except Per Share Information)



<TABLE>
<CAPTION>
                                                                        April 30,
                                                                           1998
                                                                       (As Restated   January 31,
                               Assets                                  See Note 2)       1998
--------------------------------------------------------------------   ------------   -----------
<S>                                                                    <C>            <C>
                                                                       (Unaudited)
Current assets:
    Cash and cash equivalents, including restricted cash of
       $17,960 at April 30, 1998 and $22,786 at January 31, 1998       $ 21,248        $ 28,880
    Current portion of franchise license fees receivable, net of
       allowance for doubtful accounts of $430 at April 30, 1998
       and $528 at January 31, 1998                                       2,365           3,107
    Trade accounts receivable, net of allowance for doubtful
       accounts of $2,341 at April 30, 1998 and $1,917 at
       January 31, 1998                                                  61,896          56,432
    Accounts receivable from officers and employees                       1,651           1,593
    Current portion of notes receivable from franchisees and
       related parties, net of allowance for doubtful accounts of
       $252 at April 30, 1998 and $261 at January 31, 1998                1,276           1,165
    Inventories                                                          58,958          54,693
    Refundable income taxes                                               1,986           2,558
    Deferred income taxes                                                 4,731           5,714
    Prepaid expenses                                                      5,903           3,406
                                                                       --------        --------
              Total current assets                                      160,014         157,548

Property and equipment, net of accumulated depreciation and
    amortization of $51,291 at April 30, 1998 and $48,039 at
    January 31, 1998                                                    148,127         137,207

Franchise license fees receivable, less current portion, net of
    allowance for doubtful accounts of $210 at April 30, 1998
    and January 31, 1998                                                  3,808           2,718

Notes receivable from franchisees, less current portion                   3,753           3,506

Intangible assets, net of accumulated amortization of $1,764 at
    April 30, 1998 and $1,626 at January 31, 1998                        13,520          13,640

Other assets                                                              8,888           6,875
                                                                       --------        --------
                                                                       $338,110        $321,494
                                                                       ========        ========


             Liabilities And Stockholders' Equity
--------------------------------------------------------------------

Current liabilities:
    Current portion of long-term debt                                 $     154       $     384
    Current portion of capital lease obligations                            512             501
    Rebates payable to franchisees                                        2,921           3,975
    Accounts payable                                                     22,056          23,376
    Accrued expenses                                                     13,609          14,333
    Deferred revenue                                                      3,072           1,750
    Deposits                                                              3,686           2,897
                                                                      ---------       ---------
              Total current liabilities                                  46,010          47,216

Long-term debt, less current portion                                    146,693         129,349

Capital lease obligations, less current portion                           1,289           1,429

Deferred taxes                                                            9,437           9,725
                                                                      ---------       ---------
              Total liabilities                                         203,429         187,719
                                                                      ---------       ---------
Commitments and contingencies

Stockholders' equity:
    Preferred stock, $.001 par value; 1,000 shares authorized, no
       shares issued or outstanding                                          --              --
    Common stock, $.001 par value; 25,000 shares authorized,
       17,526 shares issued at April 30, 1998 and 17,352 shares
       issued at January 31, 1998                                            18              17
    Additional paid-in capital                                          120,611         119,264
    Retained earnings                                                    30,706          29,388
    Treasury stock, 1,319 shares at April 30, 1998 and 1,221
       shares at January 31, 1998                                       (16,654)        (14,894)
                                                                      ---------       ---------
              Total stockholders' equity                                134,681         133,775
                                                                      ---------       ---------
                                                                      $ 338,110       $ 321,494
                                                                      =========       =========
</TABLE>




     See accompanying notes to condensed consolidated financial statements.


                                      -2-
<PAGE>   3
                     THE MAXIM GROUP, INC. AND SUBSIDIARIES


                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                  (In Thousands, Except Per Share Information)

                                   (Unaudited)



<TABLE>
<CAPTION>
                                                              Three Months Ended
                                                          -------------------------
                                                           April 30,
                                                              1998
                                                          (As Restated    April 30,
                                                           See Note 2)      1997
                                                          ------------    ---------
<S>                                                       <C>             <C>
Revenues:
    Sales of floor covering products                       $ 80,661       $ 71,490
    Fiber and PET sales                                       6,965          5,772
    Fees from franchise services                              6,857          7,281
    Other                                                     2,149          1,682
                                                           --------       --------
              Total revenues                                 96,632         86,225

Cost of sales                                                69,564         59,155
                                                           --------       --------
              Gross profit                                   27,068         27,070

Selling, general, and administrative expenses                22,390         20,438

Interest income                                                (386)           (94)

Interest expense                                              2,459          1,401

Other                                                            52            (35)
                                                           --------       --------
              Earnings before income taxes                    2,553          5,360

Income tax expense                                            1,235          2,109
                                                           --------       --------
              Net earnings                                 $  1,318       $  3,251
                                                           ========       ========

Earnings per common share:
    Basic                                                  $   0.08       $   0.20
                                                           ========       ========

    Diluted                                                $   0.08       $   0.20
                                                           ========       ========

Weighted average number of common shares outstanding:
    Basic                                                    16,424         16,110
                                                           ========       ========

    Diluted                                                  17,247         16,630
                                                           ========       ========
</TABLE>



     See accompanying notes to condensed consolidated financial statements.


                                      -3-
<PAGE>   4
                     THE MAXIM GROUP, INC. AND SUBSIDIARIES


                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (In Thousands)

                                   (Unaudited)



<TABLE>
<CAPTION>
                                                                                  Three Months Ended
                                                                              --------------------------
                                                                                April 30,
                                                                                  1998
                                                                              (As Restated     April 30,
                                                                               See Note 2)       1997
                                                                              ------------     ---------
<S>                                                                           <C>              <C>
Cash flows from operating activities:
    Net earnings                                                               $   1,318       $   3,251
                                                                               ---------       ---------
    Adjustments to reconcile net earnings to net cash used in operating
       activities:
           Depreciation and amortization                                           3,372           2,729
           Deferred income taxes                                                     695           1,401
           Changes in assets and liabilities:
              Increase in receivables                                             (6,229)         (7,125)
              Increase in inventories                                             (4,264)         (1,853)
              Decrease in refundable income taxes                                    572              49
              Increase in prepaid expenses and other assets                       (4,510)         (1,292)
              Decrease in rebates and accounts payable, accrued expenses,
                 deferred revenue, and deposits                                     (987)           (470)
                                                                               ---------       ---------
                     Total adjustments                                           (11,351)         (6,561)
                                                                               ---------       ---------
                     Net cash used in operating activities                       (10,033)         (3,310)
                                                                               ---------       ---------
Cash flows from investing activities:
    Capital expenditures                                                         (14,172)         (3,878)
                                                                               ---------       ---------
Cash flows from financing activities:
    Proceeds from issuance of common stock, net                                       --          47,248
    Proceeds from exercise of options, net                                         1,348             463
    Purchase of treasury stock                                                    (1,760)         (8,944)
    Borrowings under revolving credit agreement                                   17,114              --
    Repayment of revolving credit agreement                                           --         (33,428)
    Principal payments on capital lease obligations                                 (129)           (190)
                                                                               ---------       ---------
                     Net cash provided by financing activities                    16,573           5,149
                                                                               ---------       ---------
Net decrease in cash                                                              (7,632)         (2,039)

Cash, beginning of period                                                         28,880           6,439
                                                                               ---------       ---------
Cash, end of period                                                            $  21,248       $   4,400
                                                                               =========       =========
Supplemental disclosures of cash flow information:
    Cash paid during the period for:
       Interest                                                                $   4,711       $   1,332
                                                                               =========       =========

       Income taxes                                                            $      54       $   1,122
                                                                               =========       =========

</TABLE>


     See accompanying notes to condensed consolidated financial statements.


                                      -4-
<PAGE>   5
                    THE MAXIM GROUP, INC. AND SUBSIDIARIES


              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                  (In Thousands, Except Per Share Information)

                                   (Unaudited)



1.       Consolidated Financial Statements

         The accompanying unaudited condensed consolidated financial statements
         have been prepared in accordance with the instructions to Form 10-Q and
         do not include all of the information and footnotes required by
         generally accepted accounting principles for complete financial
         statements. In the opinion of management, all adjustments (consisting
         of normal recurring accruals) considered necessary for a fair
         presentation have been included. These statements should be read in
         conjunction with the consolidated financial statements and notes
         thereto included in the Company's 1998 Annual Report on Form 10-K as
         filed with the Securities and Exchange Commission.

         The results of operations for the periods presented are not necessarily
         indicative of the operating results for the full year.


2.       Restatement

         During the course of the fiscal 1999 year-end financial audit process,
         the Company recorded certain adjustments to its previously reported
         interim results. The most significant of the adjustments affecting the
         quarterly period ended April 30, 1998 related to certain vendor support
         funds and the gain on the sale of equipment recognized in the Company's
         operating results during the quarter. It was determined that certain
         revenue related to vendor support funds was incorrectly recorded and
         that the gain on the sale of certain equipment should be recognized in
         the quarter ended July 31, 1998.

         As a result of the adjustments recorded by the Company, the Company
         has revised its reported results of operations downward for the quarter
         ended April 30, 1998. This Form 10-Q/A reflects the effects of these
         adjustments.


<TABLE>
<CAPTION>
                                                     Three Months Ended April 30, 1998
                                                     ---------------------------------
                                                             As
                                                         Previously
                                                          Reported        Restated
                                                         ----------      -----------
<S>                                                      <C>             <C>
Sales of floor covering products                          $81,136         $80,661
Fees from franchise services                                9,287           6,857
Total revenues                                             99,537          96,632
Cost of sales                                              69,775          69,564
Gross profit                                               29,762          27,068
Selling, general, and administrative expenses              22,202          22,390
Interest expense                                            2,364           2,459
Other (income) expense                                       (187)             52
Earnings before income tax expense                          5,769           2,553
Income tax expense                                          2,225           1,235
Net earnings                                                3,544           1,318

Earnings per common share:
   Basic                                                  $  0.22         $  0.08

   Diluted                                                $  0.21         $  0.08

</TABLE>

<TABLE>
<CAPTION>
                                                              April 30, 1998
                                                         --------------------------
                                                             As
                                                         Previously
                                                          Reported        Restated
                                                         ----------      ----------
<S>                                                      <C>             <C>
Trade accounts receivable, net                           $ 64,326        $ 61,896
Property and equipment, net                               148,913         148,127
Deferred taxes, long-term liability                        10,427           9,437
Retained earnings                                          32,932          30,706
</TABLE>
<PAGE>   6


3.       Inventories

         Inventories consisted of the following:

<TABLE>
<CAPTION>
                                                         April 30,      January 31,
                                                           1998            1998
                                                         ---------      -----------
                  <S>                                    <C>            <C>
                  Raw materials                           $16,338         $14,809
                  Work in process                           4,139           3,363
                  Finished goods                           38,481          36,521
                                                          -------         -------
                                                          $58,958         $54,693
                                                          =======         =======
</TABLE>

4.       Senior Subordinated Notes

         On October 16, 1997, the Company completed the sale of $100,000 of
         9-1/4% Senior Subordinated Notes ("Notes") due 2007, to institutional
         buyers in a private offering under Rule 144A promulgated under the
         Securities Act of 1933. The net proceeds to the Company from the
         offering of the Notes were approximately $96,000, net of an issue
         discount and fees and related costs. The Company used the net proceeds
         from the offering of the Notes to repay all borrowings outstanding
         under its revolving credit agreements of approximately $82,700 and for
         general corporate purposes, including capital expenditures.


                                      -5-
<PAGE>   7
         Each of the Company's operating subsidiaries has fully and
         unconditionally guaranteed the Notes on a joint and several basis. The
         guarantor subsidiaries comprise all of the direct and indirect
         subsidiaries of the Company. The Company has not presented separate
         financial statements and other disclosures concerning the guarantor
         subsidiaries because management has determined that such information is
         not material to investors. There are no significant restrictions on the
         ability of the guarantor subsidiaries to make distributions to the
         Company.


5.       Subsequent Events

         Subsequent to April 30, 1998, the Company has amended its senior credit
         facility, consummated significant acquisitions and dispositions,
         defaulted a certain restricted payment covenant contained in the
         indenture which references the Company's $100 million Senior
         Subordinated Notes due October 2007 and other debt instruments
         including its senior credit facility and certain leases, and has been
         named as a party to legal and regulatory proceedings. Accordingly, the
         financial statements in this Quarterly Report on Form 10-Q/A should be
         read in conjunction with the Company's Annual Report on Form 10-K for
         the fiscal year ended January 31, 1999 as filed with the Securities and
         Exchange Commission.





                                      -6-
<PAGE>   8
ITEM 2

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF

                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Results of Operations

      Total Revenues. Total revenues increased 12.1% to $96.6 million for the
      three months ended April 30, 1998 from $86.2 million for the three months
      ended April 30, 1997. The components of total revenues are discussed
      below:

            Sales of Floor Covering Products. Sales of floor covering products
            increased 12.8% to $80.7 million for the three months ended April
            30, 1998 from $71.5 million for the three months ended April 30,
            1997. Sales of floor covering products in Company-owned stores
            increased 18.4% to $36.1 million for the three months ended April
            30, 1998 from $30.5 million for the three months ended April 30,
            1997. The growth in retail sales of floor covering products was
            primarily due to internal growth. Sales of manufactured carpet
            increased 6.1% to $40.2 million for the three months ended April 30,
            1998 from $37.9 million for the three months ended April 30, 1997.
            Unit sales of manufactured carpet were constant at 6.9 million
            square yards for the three months ended April 30, 1998 and April 30,
            1997. Sales from the Company's two distribution centers amounted to
            $4.4 million for the three months ended April 30, 1998 and $3.1
            million for the three months ended April 30, 1997, largely
            representing sales to the Company's franchisees.

            Fees From Franchise Services. Fees from franchise services, which
            include franchise license fees and royalties, brokering of floor
            covering products, and advertising, decreased 5.8% to $6.9 million
            for the three months ended April 30, 1998 from $7.3 million for the
            three months ended April 30, 1997.

            Fiber and PET Sales. Sales of fiber and polyethylene terephthalate
            ("PET") increased 20.7% to $7 million for the three months ended
            April 30, 1998 from $5.8 million for the three months ended April
            30, 1997. Unit sales increased 5.8% to 16.3 million pounds for the
            three months ended April 30, 1998 from 15.4 million pounds for the
            three months ended April 30, 1997. The increase in dollar and unit
            sales was the result of continued demand for PET fiber and flake
            products. The Company has continued to expand the customer base for
            such products.

      Gross Profit. Gross profit remained the same at $27.1 million for the
      three months ended April 30, 1998 and $27.1 million for the three months
      ended April 30, 1997. As a percentage of revenues, gross profit was 28.0%
      for the three months ended April 30, 1998 compared to 31.4% for the three
      months ended April 30, 1997. The decrease in gross profit


                                      -7-
<PAGE>   9
      as a percentage of revenues is primarily a result of the recognition of
      higher raw material costs associated with manufacturing operations.

      Selling, General, and Administrative Expenses. Selling, general, and
      administrative expenses increased 9.6% to $22.4 million for the three
      months ended April 30, 1998 from $20.4 million for the three months ended
      April 30, 1997. Increases in operating expenses on an absolute basis
      reflect an overall growth in the size of the Company's operations required
      to serve the growing retail base as well as increased selling costs at
      Image related to newly created territories. As a percentage of revenues,
      selling, general, and administrative expenses decreased to 23.2% for the
      three months ended April 30, 1998 from 23.7% for the three months ended
      April 30, 1997.

      Interest Expense. Interest expense increased 75.5% to $2.5 million for the
      three months ended April 30, 1998 from $1.4 million for the three months
      ended April 30, 1997 due principally to the Company having a larger debt
      balance and a higher interest rate during the three months ended April 30,
      1998 as compared to the prior year period. In October 1997, the Company
      sold $100 million of 9-1/4% senior subordinated notes.

      Income Tax Expense. The Company recorded income tax expense of $1.2
      million for the three months ended April 30, 1998 compared to $2.1 million
      for the three months ended April 30, 1997. The effective tax rate for the
      three months ended April 30, 1998 was 48.4%.

      Net Earnings. As a result of the foregoing factors, the Company recorded
      net earnings of $1.3 million for the three months ended April 30, 1998
      compared to net earnings of $3.3 million for the three months ended April
      30, 1997.


Liquidity and Capital Resources

      General. The Company's primary capital requirements are for new store
      openings, investments in the manufacturing operations, working capital,
      and acquisitions. The Company historically has met its capital
      requirements through a combination of cash flows from operations, net
      proceeds from the sale of equity and debt securities, bank lines of
      credit, and standard payment terms from suppliers.


         In March 1997, the Board of Directors of the Company authorized
      management to repurchase up to 1 million shares of common stock of the
      Company. In October 1997, the Board of Directors of the Company authorized
      management to repurchase up to an additional 1 million shares of the
      common stock of the Company. As of June 8, 1998, the Company had
      repurchased 1,359,000 shares of its common stock in the open market for a
      total of $17.3 million. These purchases were, and any future purchases
      will be, financed from borrowings under the Company's revolving credit
      facility.

      Credit Facility. On August 26, 1997 and as amended on September 24, 1997,
      the Company established a credit facility providing for aggregate
      commitments of $110 million (the "Credit Facility"). The Credit Facility
      consists of (i) a $50 million revolving credit facility, of which $22
      million was available for borrowings on June 8, 1998 and which matures in
      August 2000, (ii) a $29 million term loan which has been repaid, and (iii)
      a special-purpose letter of credit in the amount of up to $31 million for
      use as credit support for the


                                      -8-
<PAGE>   10

      Summerville Loan to be used to finance the expansion of Image's fiber
      extrusion capabilities at its plant in Summerville, Georgia, that matures
      in September 2017. As of June 8, 1998, the Company had $28 million
      outstanding under the revolving credit facility and no borrowings
      outstanding under the term loan. No amounts have been drawn on the letter
      of credit. Amounts outstanding under the Credit Facility bear interest at
      a variable rate based on LIBOR or the prime rate, at the Company's option.
      The Credit Facility contains customary covenants. As of the date hereof,
      the Company was in compliance with, or obtained waivers of all violations
      of, all covenants under the Credit Facility.

      Summerville Loan. Effective September 1, 1997, the Development Authority
      of the City of Summerville, Georgia (the "Authority"), issued Exempt
      Facility Revenue Bonds in an aggregate principal amount of $30 million
      (the "Facility Revenue Bonds"). On September 17, 1997, the Authority
      loaned (the "Summerville Loan") the proceeds from the sale of the Facility
      Revenue Bonds to Image to finance, in whole or in part, the expansion of
      Image's fiber extrusion capabilities at its plant in Summerville, Georgia.
      The Facility Revenue Bonds and the interest thereon are special, limited
      obligations of the Authority, payable solely from the revenues and income
      derived from a loan agreement between Image and the Authority, which
      revenues and income have been pledged and assigned by Image to secure
      payment thereof and funds which may be drawn under the special-purpose
      letter of credit described above. The Facility Revenue Bonds and the
      Summerville Loan will mature on September 1, 2017, and the interest rate
      of the Facility Revenue Bonds is to be determined from time to time based
      on the minimum rate of interest that would be necessary to sell the
      Facility Revenue Bonds in a secondary market at the principal amount
      thereof. The interest rate on the Summerville Loan equals the interest
      rate on the Facility Revenue Bonds.

      Senior Notes. On October 16, 1997, the Company completed the sale of $100
      million of 9-1/4% senior subordinated notes ("Senior Notes") due 2007.
      Each of the Company's operating subsidiaries has fully and
      unconditionally guaranteed the Senior Notes on a joint and several basis.
      The guarantor subsidiaries comprise all of the direct and indirect
      subsidiaries of the Company. The Company has not presented separate
      financial statements and other disclosures concerning the guarantor
      subsidiaries because management has determined that such information is
      not material to investors. There are no significant restrictions on the
      ability of the guarantor subsidiaries to make distributions to the
      Company.

      Synthetic Lease Financing. On April 9, 1998, the Company and its
      subsidiaries established a $13 million short-term end-loaded lease
      facility (the "Bridge Facility"), also referred to as a synthetic lease
      facility. Under the Bridge Facility, the Company has the ability to direct
      its lenders to make loans to the owner-trustee, principally for
      acquisition or expansion of CarpetMAX store locations, which financed
      locations are then leased by the owner trustee to the Company or a
      designated subsidiary.



                                      -9-
<PAGE>   11
      Cash Flows. During the three months ended April 30, 1998, operating
      activities used $10.0 million compared to $3.3 million for the three
      months ended April 30, 1997. The increase in cash used in operating
      activities resulted primarily from an increase in receivables and
      inventories. The increase in receivables and inventories was due to higher
      sales of floor covering products to franchisees and other carpet
      retailers.

            During the three months ended April 30, 1998, investing activities
      used $14.2 million compared to $3.9 million for the three months ended
      April 30, 1997. The increase is primarily due to an increase in capital
      expenditures related to manufacturing operations and the purchase of real
      estate for the expansion of retail stores.

            During the three months ended April 30, 1998, financing activities
      provided cash of $16.6 million compared to $5.1 million in the prior year
      period. This increase is primarily due to the proceeds received from
      borrowings under the Company's revolving credit agreement.

      Capital Expenditures. The Company anticipates that it will require
      approximately $15 million for the remainder of fiscal 1999 to (i) open
      approximately 32 new Gallery stores (assuming approximately 50% of such
      stores will be located on Company-owned property and the remainder on
      leased property), (ii) reconfigure three existing CarpetMAX stores, and
      (iii) upgrade its management information systems. The actual costs that
      the Company will incur in opening new Gallery stores cannot be predicted
      with precision because the opening costs will vary based upon geographic
      location, the size of the store, the amount of supplier contributions, and
      the extent of the buildout required at the selected site. The Company
      anticipates that it will require approximately $24 million during the
      remainder of fiscal 1999 for capital expenditures at Image, including the
      expansion of Image's polyester fiber production capacity.

            The Company believes that the net proceeds from the Notes Offering,
      borrowings under the Credit Facility, the Summerville Loan, and cash flows
      from the operating activities will be adequate to meet the Company's
      working capital needs, planned capital expenditures, and debt service
      obligations through fiscal 1999. As the Company's debt matures, the
      Company may need to refinance such debt. There can be no assurance that
      such debt can be refinanced or, if so, whether it can be refinanced on
      terms acceptable to the Company. If the Company is unable to service its
      indebtedness, it will be required to adopt alternative strategies, which
      may include actions such as reducing or delaying capital expenditures,
      selling assets, restructuring, or refinancing its indebtedness or seeking
      additional equity capital. There can be no assurance that any of these
      strategies could be effected on satisfactory terms, if at all.

      Recent Accounting Pronouncements. Effective with the three months ended
      April 30, 1998, the Company adopted Statement of Financial Accounting
      Standards No. 130 ("SFAS 130"), "Reporting Comprehensive Income". SFAS
      130 establishes standards for reporting and display of comprehensive
      income and its components in financial statements. SFAS 130 did not have
      an impact on the Company's financial statements.

            In June 1997, the FASB issued Statement of Financial Accounting
      Standards No. 131 ("SFAS 131"), "Disclosures About Segments of an
      Enterprise and Related Information", which is effective for fiscal years
      beginning after December 15, 1997. SFAS 131 establishes reporting
      standards for public companies concerning operating segments and related
      disclosures about products and services, geographic areas and major
      customers. SFAS 131 will be adopted with the Company's Annual Report for
      the fiscal year ending January 31, 1999.

            In March 1998, the American Institute of Certified Public
      Accountants (AICPA) issued Statement of Position 98-1 ("SOP 98-1"),
      "Accounting for Costs of Computer Software Developed or Obtained for
      Internal Use". SOP 98-1 requires capitalization of certain costs of
      internal-use software. Maxim adopted this statement in the first quarter
      of fiscal 2000, and has determined that it will have no material impact on
      the financial statements.

            In June 1998, the FASB issued Statement of Financial Accounting
      Standards No. 133 ("SFAS 133"), "Accounting for Derivative Instruments and
      Hedging Activities", which is effective for fiscal years beginning after
      June 15, 2000. Early adoption is encouraged. SFAS 133 establishes
      accounting and reporting standards for derivative instruments and
      transactions involving hedge accounting. The Company does not anticipate
      this statement will have an impact on its financial statements.

            In April 1998, the American Institute of Certified Public
      Accountants issued Statement of Position 98-5 ("SOP 98-5"), "Reporting on
      the Costs of Start-Up Activities", which is effective for fiscal years
      beginning after December 15, 1998. SOP 98-5 requires entities to expense
      certain start-up costs and organization costs as they are incurred. The
      Company does not anticipate that this statement will have an impact on its
      financial statements.

      Subsequent Events. Subsequent to April 30, 1998, the Company has amended
      its senior credit facility, consummated significant acquisitions and
      dispositions, defaulted a certain restricted payment covenant contained in
      the indenture which references the Company's $100 million Senior
      Subordinated Notes due October 2007 and other debt instruments including
      its senior credit facility and certain leases, and has been named as a
      party to legal and regulatory proceedings. Accordingly, this Quarterly
      Report on Form 10-Q/A should be read in conjunction with the Company's
      Annual Report on Form 10-K for the fiscal year ended January 31, 1999 as
      filed with the Securities and Exchange Commission.


                                      -10-
<PAGE>   12
Year 2000. Maxim has conducted an assessment of its computer systems to
identify the systems that could be affected by the "Year 2000" issue, which
results from computer programs being written using two digits rather than four
to define the applicable year.

     Maxim's Year 2000 readiness efforts are being undertaken on a project team
basis with centralized oversight from an external project management firm. Each
project team has developed and is implementing a plan to minimize the risk of a
significant negative impact on its operations. The teams are performing an
inventory of Year 2000 components (software, hardware and other equipment),
assessing which components may expose Maxim to business interruptions,
reprogramming or replacing components as necessary, testing each component, and
returning each component to production. Maxim is utilizing predominantly
internal resources to reprogram, replace, or test Maxim's software for Year
2000 compliance. Maxim believes the readiness effort related to critical
systems will be completed by the end of the third fiscal quarter ending
November 6, 1999, which is prior to any anticipated impact on its operating
systems. Maxim believes its other systems will be Year 2000 compliant by
December 31, 1999.

     Maxim has initiated formal communications with all of its significant
suppliers to determine the extent to which Maxim's operations and systems are
vulnerable to third parties' failure. Key Vendor Initiative documentation has
been received from vendors addressing all Year 2000 compliance issues. No
significant business disruptions are expected. Maxim presently believes that
with the planned conversion to new software and hardware and the planned
modifications to existing software and hardware, the effects of the Year 2000
issue will be timely resolved. All other equipment, machinery and systems have
been identified, replaced or upgraded as needed.

     Maxim's contingency plans at the retail store level include the temporary
use of manual processes, which Maxim occasionally utilizes during system
maintenance. The manual processes have been documented and tested with no
significant revenue loss anticipated.

     Maxim currently believes the costs to remediate Year 2000 issues are
approximately $2.8 million, of which $189,000 had been expensed as of January
31, 1999, and approximately $1.6 million remains to be spent as of October 1,
1999. All costs associated with analyzing the Year 2000 issue or making
conversions to existing software are being expensed as incurred. The costs to
Maxim of Year 2000 compliance and the date on which Maxim believes it will
complete the Year 2000 modifications are based on management's best estimates,
which were derived utilizing numerous assumptions of future events, including
the continued availability of certain resources, third party modification plans
and other factors. A Business Contingency Plan has been developed utilizing
five professional project managers to implement the plan. A Business Systems
Implementation schedule lists all issues related to the Year 2000. The issues
include identification of changes needed, costs, completion dates and staffing.
The plan is in the final stages of completion and will result in minimal Year
2000 effect on the Company's operations.

     Risks include the availability and cost of personnel trained in this area,
the ability to locate and correct all relevant hardware, software, computer
codes and similar uncertainties. Such risks could result in a system failure of
miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions, send invoices, or engage
in similar normal business activities. Also, there is the risk that the systems
of other companies upon which Maxim's operations and systems rely will not be
converted timely and will have an adverse effect on Maxim's results of
operations.

Forward-Looking Statements. This Report contains statements that constitute
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Those
statements appear in a number of places in this Report and include statements
regarding the intent, belief or current expectations of the Company, its
directors or its officers with respect to, among other things: (i) the timing,
magnitude and costs of the roll-out of the Gallery Stores; (ii) potential
acquisitions by the Company; (iii) the Company's financing plans; (iv) trends
affecting the Company's financial condition or results of operations; (v) the
Company's business and growth strategies; and (vi) the declaration and payment
of dividends. Any such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties, and actual results may differ
materially from those projected in the forward-looking statements as a result of
various factors. The accompanying information contained in this Report,
including without limitation the information set forth under the headings
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," identifies important factors that could cause such differences.


                                      -11-

<PAGE>   13
ITEM 3--QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      N/A










                                      -12-

<PAGE>   14
PART II--OTHER INFORMATION

ITEM 6--EXHIBITS AND REPORTS ON FORM 8-K



(A)   Exhibits

      11    Statements Regarding Computation of Per Share Earnings

      27.1  Financial Data Schedule for three month period
            ended April 30, 1998 (for SEC use only)

      27.2  Restated Financial Data Schedule for three month period ended
            April 30, 1997 (for SEC use only)*
      _____________
      * Previously filed

(B)   Reports on Form 8-K

      No reports on Form 8-K were filed during the quarter ended April 30, 1998.










                                      -13-


<PAGE>   15
                                   SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                             THE MAXIM GROUP, INC.


Dated: October 18, 1999   By: /s/ A. J. Nassar
                             ---------------------------------------------------
                             A. J. Nassar, President and Chief Executive Officer


Dated: October 18, 1999   By: /s/ Stephen P. Coburn
                             ---------------------------------------------------
                             Stephen P. Coburn, Principal Accounting Officer









                                      -14-