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Filed pursuant to Rule 424(b)(3)
Registration No. 333-10057
FLORAFAX INTERNATIONAL, INC.
Supplement No. 1
Dated November 13, 1997
to Prospectus
Dated August 13, 1996
This Supplement No. 1 supplements Florafax International, Inc. (the
"Company") Prospectus dated August 13, 1996 (the "Prospectus"), which forms a
part of the Form S-3 Registration Statement No. 333-10057 relating to 2,791,945
shares of Company common stock, par value $.01 per share ("Common Stock").
By this Supplement No. 1, the Company hereby amends the Prospectus as
follows:
HISTORY OF OPERATING LOSSES
The Company incurred losses of $401,000.00 and $311,000.00,
respectively, during fiscal years 1993 and 1994; however, during fiscal year
1995, the Company reported a net income of $707,000.00, and during fiscal year
1996, the Company reported a net income of $2,262,000.00. During the most
recently ended fiscal year, being August 31, 1997, the Company reported a net
income of $3,433,000.00.
SHARES ELIGIBLE FOR FUTURE SALE
As of the date of the Prospectus, the Company had outstanding 6,138,561
shares of Common Stock. In addition, the Company had outstanding stock options
to purchase 221,000 shares of its Common Stock. As of the date of this
Supplement No. 1, the Company has outstanding 7,745,029 shares of Common Stock,
the Company has outstanding stock options to purchase 888,250 shares of its
Common Stock, and the Company has outstanding warrants to purchase 630,967
shares of its Common Stock. If all of the shares issuable upon exercise of these
options and warrants are issued, the Company will have an additional 1,519,217
shares of Common Stock outstanding, all of which will be eligible for resale
into the public markets after any applicable vesting periods. The sale of such
shares in the public markets could have a material adverse effect on the trading
price of the Company's Common Stock.
NASDAQ LISTING AND MARKET ILLIQUIDITY
As of the date of this Supplement No. 1, the Common Stock of the
Company is now listed on the NASDAQ Small Cap Market ("NSCM"). Continued
inclusion of such securities on the NSCM will, unless the NASD grants a specific
exemption from any particular requirement, require that (i) the Company maintain
at least $2,000,000 in net tangible assets; market capitalization of
$35,000,000, or net income of $500,000 in the most recently completed fiscal
year or in two of the three most recently completed fiscal years, (ii) the
minimum bid price for the Common Stock be at least $1.00 per share, (iii) the
public float consist of at least 500,000 shares of Common Stock, valued in the
aggregate at more than $1,000,000, (iv) the Common Stock have at least two (2)
registered market makers and (v) the Common Stock be held by at least 300
holders. If the Company is unable to satisfy such maintenance requirements, the
Company's securities may be de-listed from the NSCM. In such event, trading, if
any, in the Common Stock would thereafter be conducted in the over-the-counter
market in the so-called "pink sheets" or the "NASD's OTC Electronic Bulletin
Board."
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VOTING CONTROL
As of the date of this Supplemental No. 1, the directors and executive
officers of the Company, as a group, now have sole voting and investment power
of approximately forty-five percent (45%) of the Company's outstanding Common
Stock, assuming that all shares to be offered hereby are sold. In addition,
Laifer Capital Management, Inc. ("Laifer") has the sole voting and investment
power of approximately twenty-four percent (24%) of the Company's outstanding
Common Stock. Therefore, either the directors and executive officers of the
Company, or Laifer, or both, exercise practical voting control over the affairs
of the Company.
MAJOR CUSTOMER DEPENDENCE
As stated in the Prospectus, the Company's wholly-owned subsidiary,
Credit Card Management System, Inc. ("CCMS"), provides Service Corporation
International ("SCI") with credit card and charge card processing services to
its funeral and cemetery divisions. During fiscal year 1995, CCMS received
estimated net revenues of $109,200.00 from SCI. During fiscal year 1996, CCMS
received estimated net revenues of $139,000.00 from SCI, and during fiscal year
1997, CCMS received estimated net revenues of $217,000.00 from SCI.
