SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) : October 20, 1999
SPECTRUM ORGANIC PRODUCTS, INC. *
----------------------------------------------------
(Exact name of registrant as specified in its charter)
* formerly Organic Food Products, Inc.
California 333-22997 94-3076294
- --------------------------------------------------------------------------------
(State or other (Commission File (IRS Employer
jurisdiction of incorporation) Number) Identification No.)
133 Copeland Street
Petaluma, CA 94952
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Address of Principal Executive Offices
(707) 778-8900
--------------
(Registrant's telephone number,
including area code)
<PAGE>
ITEM 5. CHANGE IN REGISTRANT NAME
In connection with the merger of Organic Food Products, Inc., Spectrum
Naturals, Inc. and Organic Ingredients, Inc., shareholders of the registrant
approved the change of the Company name to "Spectrum Organic Products, Inc."
Following the approval of the Merger by the State of California on October 20,
1999, the Company has taken the necessary actions to effect the name change,
including the issuance of common stock under the common stock certificate
specimen referenced in Exhibit 10.25 below.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements: On October 6, 1999, Registrant merged with Spectrum
Naturals, Inc. ("SNI"), in a transaction accounted for as a reverse
acquisition, since SNI shareholders now own approximately 75% of the post
merger common stock. Accordingly, SNI will become the Registrant and
present its historical financial results as the Registrant in the future.
The following unaudited financial statements for the nine months ended
September 30, 1999 and 1999 present the historical financial statements of
SNI, which now becomes the Registrant.
2
<PAGE>
SPECTRUM ORGANIC PRODUCTS, INC.
BALANCE SHEETS
ASSETS
September 30, December 31,
1999 1998
--------- ---------
(unaudited)
CURRENT ASSETS
Cash $ -- $ 500
Accounts receivable, net 2,160,100 1,712,400
Note receivables-shareholders 20,000 --
Inventory, net 3,507,900 2,772,200
Prepaid expenses 436,700 148,300
Deferred income taxes 74,400 73,100
---------- ----------
Total Current Assets 6,199,100 4,706,500
---------- ----------
PROPERTY AND EQUIPMENT, net 2,958,500 2,076,900
OTHER ASSETS
Trademarks and label development 266,900 352,600
Deferred acquisition expenses 298,500 --
Other 144,000 90,300
---------- ----------
Total Assets $9,867,000 $7,226,300
========== ==========
The Accompanying Notes are an Integral Part
of the Financial Statements
3
<PAGE>
SPECTRUM ORGANIC PRODUCTS, INC.
BALANCE SHEETS (Continued)
LIABILITIES AND SHAREHOLDER' EQUITY
September 30, December 31,
1999 1998
--------- ---------
(unaudited)
CURRENT LIABILITIES
Bank overdraft $ 382,300 $ 186,400
Line of Credit 1,445,000 1,417,500
Accounts payable 2,125,400 1,701,300
Accrued expenses 680,700 367,900
Income taxes payable 343,000 19,000
Current portion of long-term debt
Notes 461,400 512,700
Leases 45,800 35,300
Former shareholder 121,700 --
---------- ----------
Total Current Liabilities 5,605,300 4,240,100
---------- ----------
LONG-TERM LIABILITIES
Long-term debt, less current maturities 1,392,000 748,000
Note Payable to former shareholder,
less current maturities 1,783,700 1,783,700
Obligations under capital lease,
less current maturities 127,500 70,800
Deferred income taxes 168,000 168,000
Other -- 75,000
---------- ----------
Total Liabilities 9,076,500 7,085,600
---------- ----------
SHAREHOLDERS' EQUITY
Common stock, no par value; 100,000
shares authorized, 6,925 shares
issued and outstanding 95,500 95,500
Retained earnings 695,000 45,200
---------- ----------
790,500 140,700
---------- ----------
Total Liabilities and
Shareholders' equity $9,867,000 $7,226,300
========== ==========
The Accompanying Notes are an Integral Part
of the Financial Statements
4
<PAGE>
SPECTRUM ORGANIC PRODUCTS, INC.
STATEMENTS OF INCOME
Nine Months Ended September 30,
1999 1998
---- ----
(unaudited) (unaudited)
GROSS SALES $ 18,751,900 $ 17,575,900
COST OF GOODS SOLD 11,525,500 11,283,300
------------ ------------
GROSS PROFIT 7,226,400 6,292,600
PROMOTIONS AND ADVERTISING 1,474,000 1,385,100
OPERATING EXPENSES 4,287,800 3,836,300
------------ ------------
INCOME FROM OPERATIONS 1,464,600 1,071,200
OTHER (INCOME) EXPENSE
Interest, net 392,000 352,700
Other (9,000) 17,500
------------ ------------
383,000 370,200
INCOME BEFORE INCOME TAXES 1,081,600 701,000
PROVISION FOR INCOME TAXES 431,800 280,400
------------ ------------
NET INCOME $ 649,800 $ 420,600
============ ============
BASIC EARNINGS PER SHARE $ 93.83 $ 60.74
============ ============
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC 6,925 6,925
============ ============
DILUTED EARNINGS PER SHARE $ 91.46 $ 59.20
============ ============
WEIGHTED AVERAGE SHARS
OUTSTANDING - DILUTED 7,105 7,105
============ ============
The Accompanying Notes are an Integral Part
of the Financial Statements
5
<PAGE>
<TABLE>
<CAPTION>
SPECTRUM ORGANIC PRODUCTS, INC.
STATEMENTS OF INCOME
Nine Months Ended September 30,
1999 1998
---- ----
(unaudited) (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 649,800 $ 420,600
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 277,900 230,800
Deferred income taxes (1,300) 13,400
Allowances against receivables
and chargebacks 7,500 --
Changes in:
Receivables (455,200) 102,600
Inventories (735,700) (170,200)
Prepaid expenses (288,400) (130,500)
Other assets (53,700) 12,700
Accounts payable 424,100 (293,600)
Accrued expenses 312,800 206,400
Income taxes payable 324,000 (37,000)
Other (75,000) --
----------- -----------
Net cash provided by operating activities 386,800 355,200
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (971,800) (262,400)
Loan to Shareholder (20,000) (2,700)
Deferred acquisition expenses (298,500) --
----------- -----------
Net cash used by investing activities (1,290,300) (265,100)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings (repayments) under line of credit 27,500 240,000
Principal repayments on long-term debt (407,300) (174,400)
Bank overdraft 195,900 (97,000)
Proceeds from note receivable from stock sale -- 10,000
Principal payments on obligations under capital lease (34,800) (12,400)
Proceeds from long-term debt 1,121,700 --
----------- -----------
Net cash provided (used) by financing activities 903,000 (33,800)
----------- -----------
INCREASE (DECREASE) IN CASH (500) 56,300
CASH, BEGINNING OF PERIOD 500 154,400
----------- -----------
CASH, END OF PERIOD $ -- $ 210,700
=========== ===========
The Accompanying Notes are an Integral Part
of the Financial Statements
6
</TABLE>
<PAGE>
SPECTRUM ORGANIC PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS
1. Interim Financial Statements
The unaudited interim financial statements include all adjustments
(consisting of normal recurring accruals) which, in the opinion of
management, are necessary in order to make the financial statements not
misleading. Operating results for the nine-month period ended September 30,
1999 are not necessarily indicative of the results that may be expected for
the entire year ending December 31, 1999. These financial statements have
been prepared in accordance with the instructions to Form 10-QSB and do not
contain certain information required by generally accepted accounting
principles. These statements should be read in conjunction with Spectrum
Naturals, Inc. financial statements and notes thereto for the three-months
ended March 31, 1999 and year ended December 31, 1998 included in the Joint
Proxy Registration Statement on Form S-4, filed by Organic Food Products,
Inc.
2. Subsequent Events: Merger and Name Change
On May 14, 1999, Spectrum Naturals, Inc. ("SNI") and Organic Food
Products, Inc. ("OFPI") entered into a definitive agreement to merge the
companies in a stock exchange. In addition, the OFPI entered into a
definitive agreement to acquire all the outstanding shares of SNI and
Organic Ingredients, Inc. ("OI"). Collectively, defined as the "Merger".
Under the terms of the Merger, which will be accounted for as a reverse
acquisition purchase, SNI will receive approximately 75% of the post merger
Common Stock of OFPI, subject to certain adjustments. The Merger was
approved by the shareholders of all of the parties, and became effective on
October 6, 1999 with approval by the State of California as of October 20,
1999.
As approved by shareholders, the newly combined group changed its name
to "Spectrum Organic Products, Inc." in connection with the Merger. The
name change became effective October 20, 1999 upon approval of the merger
by the State of California.
3. Transactions with OFPI
In expectation of the Merger, SNI advanced working capital to the OFPI
to enable the company to maintain minimum inventory levels of selected
products. As of September 30, 1999, OFPI owed SNI approximately $151,400
for payments SNI made to vendors on behalf of OFPI. SNI purchased inventory
from OFPI of approximately $296,900 in connection with a royalty agreement.
The full amount of this purchse had been paid by SNI as of September 30,
1999.The Company believes that the terms and conditions of these
transactions were fair, reasonable and consistent with terms it could have
obtained from unaffiliated third parties.
(a) Pro forma financial statements.
See Registrant's Joint Proxy Registration Statement on Form S-4,
declared effective July 30, 1999.
(b) Exhibits.
7
<PAGE>
(c) Exhibits
10.16 Agreement and Plan of Merger and Reorganization dated May 14, 1999 by and
between Organic Food Products, Inc. and Organic Ingredients, Inc. (1)
10.17 Agreement and Plan of Merger and Reorganization dated May 14, 1999 by and
between Organic Food Products, Inc. and Spectrum Naturals, Inc. (1)
10.18 Form of Amended and Restated Articles of Incorporation of Organic Food
Products, Inc. (1)
10.23 September 23, 1999 Private Placement Memorandum by Organic Food Products,
Inc. (2)
10.24 Amended and restated Bylaws of Spectrum Organic Products, Inc. (3)
10.25 Specimen of Spectrum Organic Products, Inc. Common Stock certificate
27 Financial data schedule
- -------------------------
(1) Incorporated by reference to annexes filed with Registrant's Joint Proxy
Registration Statement on Form S-4, File No. 333-83675, declared effective
July 30, 1999.
(2) Incorporated by reference to exhibits filed with Registrant's Form 10KSB on
October 13, 1999.
(3) Incorporated by reference to exhibits filed with Registrant's Form 8K on
October 21, 1999.
ITEM 8. CHANGE IN FISCAL YEAR
As reported in the original Form 8K filed on October 21, 1999, the
Registrant has changed its accounting year-end to December 31, the year end
of the accounting acquire, SNI.
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 hereunto duly authorized.
Dated: December 27, 1999 Spectrum Organic Products, Inc.
/s/ Richard R. Bacigalupi
-----------------------------------------
Richard R. Bacigalupi
Chief Financial Officer
8
Exhibit 10.25
Number Shares
SPECTRUM
Organic Products, Inc.
Incorporated Under the Laws of the State of California
See Reverse For
Certain Definitions
CUSIP 84762W 10 1
This Certifies That
is the owner of
Fully Paid and Non-Assessable Common Stock, No Par Value, of
Spectrum Organic Products, Inc.
transferable on the books of the Company by the holder hereof in person or by
duly authorized attorney upon surrender of this Certificate properly endorsed.
This Certificate and the shares represented hereby are issued and shall be
subject to all the provisions of the articles of Incorporation, to all of which
the holder by acceptance hereby assents.
In Witness Whereof, the said Company has caused this Certificate to be signed
in facsimile by its duly authorized officers and the facsimile seal of the
Company to be duly affixed hereto.
/s/ (Seal Graphic Omitted) /s/
----------------------- ----------------------
SECRETARY PRESIDENT
COUNTERSIGNED:
CORPORATE STOCK TRANSFER, INC.
1200 Cherry Creek Drive South, Suite 430,
Denver, CO 80209
By: --------------------------------------
Transfer Agent and Registrar
Authorized Officer
<PAGE>
Back of Certificate
Spectrum Organic Products, Inc.
Corporate Stock Transfer, Inc.
Transfer Fee: As Required
- --------------------------------------------------------------------------------
The following abbrevaiations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian for
(Cust.) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts to Minors
JT TEN - as joint tenants with right of Act of
survivorship and not as tenants -------------------------
in common (State)
Additional abbreviations may also be used though not in the above list.
For value received ___________________________ hereby, sell, assign and
transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
INDENTIFYING NUMBER OF ASSIGNEE
---------------------------------------
Please print or type name and address of assignee
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------Shares
of the Common Stock represented by the within Certificate and do hereby
irrevocably constitute and appoint
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Attorney to transfer the said stock on the books of the within-named
Corporation, with full power of substitution in the premises.
Dated
--------------------------
SIGNATURE: X
-------------------------------------------
X
-------------------------------------------
THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON
THE FACE OF THIS CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER, THE SIGNATURE(S) MUST BE GUARANTEED BY AN
ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockholders, Savings and Loan
Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 2,194,900
<ALLOWANCES> 34,800
<INVENTORY> 3,507,900
<CURRENT-ASSETS> 6,199,100
<PP&E> 3,825,000
<DEPRECIATION> 866,600
<TOTAL-ASSETS> 9,867,000
<CURRENT-LIABILITIES> 5,605,300
<BONDS> 0
0
0
<COMMON> 95,500
<OTHER-SE> 695,000
<TOTAL-LIABILITY-AND-EQUITY> 9,867,000
<SALES> 18,751,900
<TOTAL-REVENUES> 18,751,900
<CGS> 11,525,500
<TOTAL-COSTS> 11,525,500
<OTHER-EXPENSES> (9,000)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 392,000
<INCOME-PRETAX> 1,081,600
<INCOME-TAX> 431,800
<INCOME-CONTINUING> 649,800
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 649,800
<EPS-BASIC> 93.83
<EPS-DILUTED> 91.46
</TABLE>
