-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NhKxhakl8az2mUSeEbVOmyD0XeyALMfQmEQz0e1yoX/65j1rAcCqhhijwZuIr29B UCl9SoAox4PpJZOujVBcVg== 0001000096-98-000295.txt : 19980428 0001000096-98-000295.hdr.sgml : 19980428 ACCESSION NUMBER: 0001000096-98-000295 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980210 ITEM INFORMATION: FILED AS OF DATE: 19980427 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ORGANIC FOOD PRODUCTS INC CENTRAL INDEX KEY: 0001034992 STANDARD INDUSTRIAL CLASSIFICATION: CANNED, FRUITS, VEG & PRESERVES, JAMS & JELLIES [2033] IRS NUMBER: 943076294 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-22231 FILM NUMBER: 98601906 BUSINESS ADDRESS: STREET 1: 550 MONTEREY RD CITY: MORGAN HILL STATE: CA ZIP: 95037 BUSINESS PHONE: 4087821133 MAIL ADDRESS: STREET 1: 550 MONTEREY RD CITY: MORGAN HILL STATE: CA ZIP: 95037 8-K/A 1 FORM 8-K/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A AMENDMENT NO. 1 TO FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 date of Report (Date of earliest event reported): February 10, 1998 ORGANIC FOOD PRODUCTS, INC. --------------------------- (Exact name of registrant as specified in its charter) California 333-22997 97-3076294 ------------- ---------------- ------------------- (State of (Commission File (IRS Employer incorporation) Number) Identification No.) 550 Monterey Road, suite B Morgan Hill, CA 95037 -------------------------------------- Address of Principal/Executive Offices (408) 782-1133 ------------------------------ (Registrant's telephone number, including area code) On February 10, 1998, Organic Food Products, Inc. ("OFP") purchased certain assets of Sunny Farms Corporation, producer of bottled water and natural juice products in Richmond, California. On February 25, 1998, OFP filed a current report on Form 8-K (the "original 8-K") disclosing the acquisition. This amendment No. 1 to the original 8-K is being filed for the purpose of filing pro forma financial information and financial statements required to be filed under Item 7. Item 7. Financial Statements - ------- -------------------- F-1) Index Pro Forma Condensed Combined Financial Statements of Organic Food Products, Inc. F-2) Introduction F-3) Pro Forma Condensed Combined Balance Sheet as of December 31, 1997 (Unaudited) F-4) Pro Forma Condensed Combined Statement of Operations For the Year Ended June 30, 1997 (Unaudited) F-5) Pro Forma Condensed Combined Statement of Operations For the Six Month Period Ended December 31, 1997 (Unaudited) Financial Statements of Sunny Farms, a Division of Sunny Farms Corp. F-6) Report of Independent Certified Public Accountants F-7) Statements of Net Assets as of February 10, 1998 (Unaudited) and June 30, 1997 F-8) Statements of Revenues and Expenses For the Period From July 1, 1997 Through February 10, 1998 (Unaudited) and For the Years Ended June 30, 1997 and 1996 F-9) Notes to Financial Statements Pursuant to the requirements of the Securities and Exchange Act of 1934, Organic Food Products, Inc. has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: April 27, 1998 Organic Food Products, Inc. /s/ Thomas K. Ward ------------------------------------- Thomas K. Ward Chief Financial Officer FINANCIAL STATEMENTS INDEX ----- Pro Forma Condensed Combined Financial Statements of Organic Food Products, Inc. F-2) Introduction F-3) Pro Forma Condensed Combined Balance Sheet as of December 31, 1997 (Unaudited) F-4) Pro Forma Condensed Combined Statement of Operations For the Year Ended June 30, 1997 (Unaudited) F-5) Pro Forma Condensed Combined Statement of Operations For the Six Month Period Ended December 31, 1997 (Unaudited) Financial Statements of Sunny Farms, a Division of Sunny Farms Corp. F-6) Report of Independent Certified Public Accountants F-7) Statements of Net Assets as of February 10, 1998 (Unaudited) and June 30, 1997 F-8) Statements of Revenues and Expenses For the Period From July 1, 1997 Through February 10, 1998 (Unaudited) and For the Years Ended June 30, 1997 and 1996 F-9) Notes to Financial Statements F-1 ORGANIC FOOD PRODUCTS, INC. PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS Introduction: The following unaudited pro forma condensed combined financial statements give effect to the acquisition by Organic Food Products, Inc. ("the Company") of certain assets of Sunny Farms, A Division of Sunny Farms Corp., pursuant to the Agreement of Purchase and Sale of Assets between the parties, and are based on estimates and assumptions set forth herein and in the notes to such statements. This pro forma information has been prepared by utilizing the historical financial statements and notes thereto, which are incorporated by reference herein. The pro forma financial data does not purport to be indicative of the results which actually would have been obtained had the purchase been effected on the dates indicated or of the results which may be obtained in the future. The pro forma financial information is based on the purchase method of accounting for the acquisition. The pro forma entries are described in the accompanying footnotes to the unaudited pro forma condensed combined statements of operations assuming the acquisition took place on the first day of the period presented. The pro forma unaudited condensed combined balance sheet assumes the acquisition took place on the date of the balance sheet. Acquisition: On February 10, 1998, the Company acquired certain assets of Sunny Farms, A Division of Sunny Farms Corp. for approximately $2,557,367, comprised of $1,700,000 in common stock, $158,601 in cash of which $38,601 is deferred, and the assumption of $698,766 of debt. F-2
ORGANIC FOOD PRODUCTS, INC. PROFORMA CONDENSED COMBINED BALANCE SHEET (UNAUDITED) December 31, 1997 The following represents an unaudited pro forma condensed combined balance sheet as of December 31, 1997, assuming the Company's acquisition of certain assets of Sunny Farms, A Division of Sunny Farms Corp. for approximately $2,557,367, comprised of $1,700,000 in common stock, $158,601 in cash of which $38,601 is deferred, and the assumption of $698,766 of debt, and is accounted for under the purchase method of accounting. ASSETS Pro Forma Organic Food Pro Forma Combined Products, Inc. Sunny Farms Adjustments Amounts -------------- ----------- ----------- ------- Current Assets: Cash $ - $ - $ (120,000) (1) $ - 120,000 (2) Accounts receivable 1,402,461 - 1,402,461 Inventory 3,359,653 737,367 4,097,020 Other current assets 454,558 - 454,558 ---------- ---------- ----------- Total Current Assets 5,216,672 737,367 5,954,039 Property and equipment, net of accumulated depreciation 1,256,993 120,000 1,376,993 Other assets, net of accumulated amortization 2,283,783 - 1,700,000 (1) 3,983,783 ---------- ---------- ----------- Total Assets $8,757,448 $ 857,367 $11,314,815 ========== ========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Note payable $ - $ 698,766 120,000 (2) $ 818,766 Note payable - related parties 483,538 - 483,538 Capital lease 4,296 - 4,296 Accounts payable 1,173,373 - 38,601 (1) 1,211,974 Accrued expenses 75,654 - 75,654 ---------- ---------- ----------- Total Current Liabilities 1,736,861 698,766 2,594,228 Note payable - related parties 269,322 - 269,322 Capital lease - long-term 15,539 - 15,539 ---------- ---------- ----------- Total Liabilities 2,021,722 698,766 2,879,089 Shareholders' Equity 6,735,726 - 1,700,000 (1) 8,435,726 Equity in assets acquired - 158,601 (158,601) (1) - ---------- ---------- ----------- Total Liabilities and Shareholders' Equity $8,757,448 $ 857,367 $11,314,815 ========== ========== =========== (1) Pro forma adjustment to record acquisition of certain assets of Sunny Farms, A Division of Sunny Farms Corp. (2) Pro forma adjustment to record draws on Company's line of credit to fund acquisition. F-3
ORGANIC FOOD PRODUCTS, INC. PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS (Unaudited) For the Year Ended June 30, 1997 The following represents an unaudited pro forma condensed combined statement of operations for the year ended June 30, 1997, assuming the Company's acquisition of certain assets of Sunny Farms, A Division of Sunny Farms Corp. for approximately $2,557,367, comprised of $1,700,000 in common stock, $158,601 in cash of which $38,601 is deferred, and the assumption of $698,766 of debt, and is accounted for under the purchase method of accounting. Pro Forma Organic Food Pro Forma Combined Products, Inc. Sunny Farms Adjustments Amounts -------------- ----------- ----------- ------- Revenues $11,378,916 $ 7,119,104 $ 18,498,020 Cost of Revenues (7,530,270) (7,493,180) (15,023,450) ----------- ----------- ------------ Gross Profit (Loss) 3,848,646 (374,076) 3,474,570 Sales and Marketing Expenses (2,408,864) (106,460) (2,515,324) General and Adminis- trative Expenses (1,118,686) (568,323) $ (24,000) (1) (1,824,342) ----------- ----------- (113,333) (2) ------------ Income (Loss) from Operations 321,096 (1,048,859) (865,096) Other Income 11,447 88,953 100,400 Interest Expense (261,376) (135,984) (397,360) Gain on Sale of Assets - 101,105 101,105 ----------- ----------- ------------ Basic Income (Loss) before Income Taxes 71,167 (994,785) (1,060,951) Income Tax Expense (16,000) - 16,000 (3) - ----------- ----------- ------------ Net Income (Loss) $ 55,167 $ (994,785) $ (1,060,951) =========== =========== ============ Basic Income (Loss) per Share $ .01 $ (.14) =========== ============ Weighted Average Number of Shares Outstanding 5,692,830 7,392,830 =========== ============ (1) Pro forma adjustment to record the depreciation of fixed assets acquired from Sunny Farms, A Division of Sunny Farms Corp. (2) Pro forma adjustment to record the amortization of intangible assets resulting from the acquisition of certain assets of Sunny Farms, A Division of Sunny Farms Corp. (3) Adjustment of income taxes. F-4
ORGANIC FOOD PRODUCTS, INC. PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS (Unaudited) For the Six Month Period Ended December 31, 1997 The following represents an unaudited pro forma condensed combined statement of operations for the six month period ended December 31, 1997, assuming the Company's acquisition of certain assets of Sunny Farms, A Division of Sunny Farms Corp. for approximately $2,557,367, comprised of $1,700,000 in common stock, $158,601 in cash of which $38,601 is deferred, and the assumption of $698,766 of debt, and is accounted for under the purchase method of accounting. Pro Forma Organic Food Pro Forma Combined Products, Inc. Sunny Farms Adjustments Amounts -------------- ----------- ----------- ------- Revenues $5,639,661 $2,735,450 $8,375,111 Cost of Revenues (4,082,103) (2,497,827) (6,579,930) ---------- ---------- ---------- Gross Profit 1,557,558 237,623 1,795,181 Sales and Marketing Expenses (1,575,565) (293,184) (1,868,749) General and Adminis- trative Expenses (460,909) (202,623) $ (12,000) (1) (732,199) (56,667) (2) ---------- ---------- ---------- Loss from Operations (478,916) (258,184) (805,767) Other Income (Expense) (30,966) 40,615 9,649 Interest Expense (37,021) (77,766) (114,787) ---------- ---------- ---------- Loss before Taxes (546,903) (295,335) (910,905) Income Tax Benefit 136,726 - 136,726 ---------- ---------- ---------- Net Loss $ (410,177) $ (295,335) $ (774,179) ========== ========== ========== Basic Loss per Share $ (.06) $ (.09) ========== ========== Weighted Average Number of Shares Outstanding 6,525,173 8,225,173 ========== ========== (1) Pro forma adjustment to record the depreciation of fixed assets acquired from Sunny Farms, A Division of Sunny Farms Corp. (2) Pro forma adjustment to record the amortization of intangible assets resulting from the acquisition of certain assets of Sunny Farms, A Division of Sunny Farms Corp. F-5
INDEPENDENT AUDITORS' REPORT ---------------------------- Sunny Farms, A Division of Sunny Farms Corp. We have audited the accompanying statement of net assets of Sunny Farms, a Division of Sunny Farms Corp. as of June 30, 1997 and the related statements of revenues and expenses for the years ended June 30, 1997 and 1996. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets of Sunny Farms, A Division of Sunny Farms Corp. as of June 30, 1997, and the results of operations for the years ended June 30, 1997 and 1996, in conformity with generally accepted accounting principles. Semple & Cooper, LLP Phoenix, Arizona March 20, 1998 F-6 SUNNY FARMS, A DIVISION OF SUNNY FARMS CORP. STATEMENTS OF NET ASSETS February 10, June 30, 1998 1997 ----------- --------- (Unaudited) Inventories (Note 3) $ 737,367 $ 761,655 Property and equipment, net 120,000 171,000 --------- --------- 857,367 932,655 Liabilities assumed (Note 2) (698,766) (756,559) --------- --------- Net assets $ 158,601 $ 176,096 ========= ========= The Accompanying Notes are an Integral Part of the Financial Statements. F-7
SUNNY FARMS, A DIVISION OF SUNNY FARMS CORP. STATEMENTS OF REVENUES AND EXPENSES For The Period From July 1, 1997 Through February 10, 1998 (Unaudited) and For The Years Ended June 30, 1997 and 1996 February 10, June 30, June 30, 1998 1997 1996 ------------ ----------- ---------- (Unaudited) Sales $3,182,001 $ 7,119,104 $9,489,679 ---------- ----------- ---------- Cost of Sales (3,199,063) (7,599,640) (9,470,885) General and Administrative Expenses (341,604) (568,323) (432,625) ---------- ----------- ---------- Total Costs and Expenses (3,540,667) (8,167,963) (9,903,510) ---------- ----------- ---------- Excess of Expenses over Revenues $ (358,666) $(1,048,859) $ (413,831) ========== =========== ==========
The Accompanying Notes are an Integral Part of the Financial Statements F-8 SUNNY FARMS, A DIVISION OF SUNNY FARMS CORP. NOTES TO FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies, Description of Business and Use of Estimates: Description of Business and Basis of Presentation: The statements of net assets at June 30, 1997 and February 10, 1998 (unaudited) include certain assets of Sunny Farms, a Division of Sunny Farms Corp. to be acquired by Organic Food Products, Inc., pursuant to an asset acquisition agreement dated February 10, 1998 (Note 2). The statements of the net assets do not include assets and liabilities of the business that are not intended to be transferred to the purchaser under the terms of the asset acquisition agreement. Accordingly, statements of cash flows are not included or applicable to the business being sold. The accompanying statements of net assets and revenues and expenses relate to Sunny Farms, a Division of Sunny Farms Corp. ("the Division"). The principal business purpose of the Division is the production and distribution of bottled water and natural juices throughout the Western United States. During the period covered by the financial statements, Sunny Farms Division was operated as an integral part of Sunny Farms Corp.'s overall operations and separate financial statements were not prepared. The accompanying financial statements include historical revenues and expenses of the Sunny Farms Division plus allocated corporate overhead costs as described herein, which are not necessarily indicative of the costs and expenses which would have resulted if the business had been operated as a separate company. Corporate overhead and general and administrative expenses include only those costs that related directly or indirectly to the operation of the Sunny Farms Division. The financial statements have been prepared to substantially comply with rules and regulations of the Securities and Exchange Commission for businesses acquired. Pervasiveness of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Inventory: Inventory quantities and valuations are determined by a physical count and pricing of same. Inventory is stated at the lower of cost or market. Inventories are stated at standard cost, which approximates actual cost using the first-in, first-out method of inventory valuation. F-9 SUNNY FARMS, A DIVISION OF SUNNY FARMS CORP. NOTES TO FINANCIAL STATEMENTS (Continued) 1. Summary of Significant Accounting Policies, Description of Business and Use of Estimates: (Continued) Property and Equipment: Property and equipment are recorded at cost. Depreciation is provided for using the accelerated method over the estimated useful lives of the assets. Maintenance and repairs that neither materially add to the value of the property nor appreciably prolong its life are charged to expense as incurred. Betterments or renewals are capitalized when incurred. For the period ended February 10, 1998 (unaudited) and for the years ended June 30, 1997 and 1996, depreciation expense was $78,999, $89,227, and $129,184, respectively. Interim Financial Information: The financial data as of February 10, 1998 and for the period from July 1, 1997 through February 10, 1998 is unaudited but includes all adjustments (consisting only of normal recurring accruals) that management considers necessary for a fair presentation of the financial position at such date and the results of operations for those periods. Operating results for the period from July 1, 1997 through February 10, 1998 are not necessarily indicative of the results that may be expected for the entire fiscal year ending June 30, 1998. 2. Acquisition of Net Assets: On February 10, 1998, Organic Food Products, Inc., a public company, entered into a purchase agreement to purchase certain assets of Sunny Farms, a Division of Sunny Farms Corp. for approximately $2,557,367, comprised of $1,700,000 in common stock, $158,601 in cash, and the assumption of debt in the amount of $698,766. 3. Inventory: At February 10, 1998 and June 30, 1997, inventory on hand consisted of the following: February 10, June 30, 1998 1997 ------------ ---------- (Unaudited) Raw materials $ 370,430 $ 323,917 Finished goods 366,937 437,738 ---------- ---------- $ 737,367 $ 761,655 ========== ========== F-10 -----END PRIVACY-ENHANCED MESSAGE-----