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)
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
<TABLE>
<CAPTION>
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
-------------- ----------- ----------- -------
<S> <C> <C> <C> <C>
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
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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
-------------- ----------- ----------- -------
<S> <C> <C> <C>
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
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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
-------------- ----------- ----------- -------
<S> <C> <C> <C>
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
</TABLE>
<PAGE>
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
<PAGE>
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
<PAGE>
<TABLE>
<CAPTION>
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)
<S> <C> <C> <C>
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)
========== =========== ==========
</TABLE>
The Accompanying Notes are an Integral Part
of the Financial Statements
F-8
<PAGE>
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
<PAGE>
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
