FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________________________
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended June 30, 1996
_________________________________________________________
Commission File Number 0-16251
GALAXY FOODS COMPANY
(Exact name of registrant as specified in its charter)
Delaware 25-1391475
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2441 Viscount Row
Orlando, Florida 32809
(Address of principal executive offices) (Zip Code)
(407) 855-5500
(Registrant's telephone number, including area code)
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 past 90 days.
YES __X__ NO _____
On July 30, 1996, there were 54,774,372 shares of Common Stock $.01 par
value per share, outstanding.
<PAGE>
GALAXY FOODS COMPANY
Index to Form 10-QSB
For Quarter Ended June 30, 1996
PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets 3
Statements of Operations 4
Statements of Stockholders' Equity 5
Statements of Cash Flows 6-7
Notes to Financial Statements 8-9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10-11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12-15
SIGNATURES 16
<PAGE>
PART I. FINANCIAL INFORMATION
GALAXY FOODS COMPANY
BALANCE SHEETS
JUNE 30, MARCH 31,
1996 1996
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,700,054 $ 127,936
Marketable securities 2,013,742 --
Trade receivables, net 1,342,223 717,437
Inventories 1,668,864 1,188,674
Prepaid expenses 345,180 289,317
Total current assets 7,070,063 2,323,364
PROPERTY & EQUIPMENT, NET 5,594,666 5,286,452
OTHER ASSETS 468,597 422,156
TOTAL $ 13,133,326 $ 8,031,972
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade $ 287,071 $ 283,527
Accrued liabilities 299,387 323,594
Current portion of note payable -- 63,451
Current portion of obligations
under capital leases 47,694 56,788
Total current liabilities 634,152 727,360
OBLIGATIONS UNDER CAPITAL LEASES,
less current portion 28,309 35,926
Total liabilities 662,461 763,286
COMMITMENTS AND CONTINGENCIES -- --
STOCKHOLDERS' EQUITY:
Convertible preferred stock 40 --
Common stock 547,744 534,218
Additional paid-in capital 41,056,490 35,452,644
Accumulated deficit (16,361,209) (15,921,976)
25,243,065 20,064,886
Less: Notes receivable arising
from the exercise of stock options
and sale of common stock 12,772,200 12,796,200
Total stockholders' equity 12,470,865 7,268,686
TOTAL $ 13,133,326 $ 8,031,972
See accompanying notes to financial statements.
<PAGE>
GALAXY FOODS COMPANY
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED
JUNE 30,
1996 1995
(Unaudited) (Unaudited)
NET SALES $ 3,354,980 $ 757,579
COST OF GOODS SOLD 2,951,616 671,664
Gross margin 403,364 85,915
OPERATING EXPENSES:
Selling 364,957 192,570
Delivery 116,976 50,164
General and administrative 336,212 259,927
Research and development 58,541 29,423
Total operating expenses 876,687 532,084
OPERATING LOSS (473,323) (446,169)
OTHER INCOME (EXPENSE):
Interest expense (7,578) (20,372)
Interest income 39,016 10,694
Other income 2,652 23,687
Total 34,090 14,009
NET LOSS $ (439,233) $ (432,160)
LOSS PER COMMON SHARE $ (.01) $ (.03)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 34,144,011 15,986,126
See accompanying notes to financial statements.
<PAGE>
GALAXY FOODS COMPANY
Statements of Stockholders' Equity
<TABLE>
<CAPTION> Convertible
Common Stock Preferred Stock Additional Notes Rec &
Par Par Paid-In Accumulated Subs. for
Shares Value Shares Value Capital Deficit Common Stock Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at March 31, 1995 14,024,826 $ 140,248 -- $ -- $ 15,530,314 $ (12,501,401) $ (1,200,000) $ 1,969,161
Exercise of options 64,000 640 -- -- 31,360 -- (24,000) 8,000
Issuance of common stock
through Reg S offering 3,978,464 39,785 -- -- 1,780,393 -- -- 1,820,178
Issuance of convertible preferred
stock through Reg S offering -- -- 353,755 3,537 5,990,557 -- -- 5,994,094
Stock dividends paid 135,753 1,358 -- -- 136,619 (137,977) -- 0
Conversion of convertible preferred
stock into common stock 16,760,458 167,604 (353,755) (3,537) (164,067) -- -- 0
Reversal to unissued stock (4,153) (42) -- -- (5,928) -- -- (5,970)
Issuance of common stock
per employment agreement 18,000,000 180,000 -- -- 11,392,200 -- (11,572,200) 0
Issuance of common stock in
payment of consulting fees 200,000 2,000 -- -- 108,500 -- -- 110,500
Exercise of warrants 240,000 2,400 -- -- 181,850 -- -- 184,250
Issuance of common stock under
employee stock purchase plan 22,500 225 -- -- 11,025 -- -- 11,250
Issuance of warrants -- -- -- -- 459,821 -- -- 459,821
Net loss -- -- -- -- -- (3,282,598) -- (3,282,598)
Balance at March 31, 1996 53,421,848 $ 534,218 -- $ -- $ 35,452,644 $ (15,921,976) $(12,796,200) $ 7,268,686
Exercise of options 15,000 150 -- -- 7,350 -- -- 7,500
Collection of note receivable -- -- -- -- -- -- 24,000 24,000
Issuance of common stock
through Reg D offering 1,337,524 13,376 -- -- 1,846,095 -- -- 1,859,471
Issuance of convertible
preferred stock through
Reg D offering -- -- 4,000 40 3,733,901 -- -- 3,733,941
Issuance of warrants -- -- -- -- 16,500 -- -- 16,500
Net loss -- -- -- -- -- (439,233) -- (439,233)
Balance at June 30, 1996 54,774,372 $ 547,744 4,000 $ 40 $ 41,056,490 $ (16,361,209) $ (12,772,200) $ 12,470,865
See accompanying notes to financial statements.
<PAGE>
GALAXY FOODS COMPANY
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED
JUNE 30,
1996 1995
(Unaudited) (Unaudited)
CASH FLOWS FROM/(USED IN)
OPERATING ACTIVITIES:
Net Loss $ (439,233) $ (432,160)
ADJUSTMENTS TO RECONCILE NET
LOSS TO NET CASH USED IN
OPERATING ACTIVITIES:
Depreciation expense 96,393 64,240
Gain on sale of assets -- (21,599)
Provision for losses on trade receivables -- 22,103
Issuance of common stock warrants in
payment of consulting and director fees 16,500 --
(Increase) decrease in:
Trade receivables (624,786) (226,858)
Inventories (480,190) 50,793
Prepaid expenses (55,863) 10,024
Increase (decrease) in:
Accounts payable 3,544 (494,384)
Accrued liabilities (24,207) (56,835)
NET CASH USED IN OPERATING
ACTIVITIES (1,507,842) (1,084,676)
CASH FLOWS FROM/(USED IN) INVESTING
ACTIVITIES:
Proceeds from sale of property and equipment -- 25,668
Purchase of marketable securities (2,013,742) --
Purchase of property and equipment (404,607) (29,231)
Increase in other assets (46,441) (6,922)
Increase in deposits on equipment -- (901,247)
NET CASH USED IN INVESTING
ACTIVITIES (2,464,790) (911,732)
CASH FLOWS FROM/(USED IN) FINANCING
ACTIVITIES:
Principal payments on stockholder
notes -- (2,697,388)
Principal payments on note payable (63,451) --
Principal payments on capital lease
obligations (16,711) (23,903)
Proceeds from issuance of common
stock, net of offering costs $ 1,859,471 $ 1,895,189
<PAGE>
GALAXY FOODS COMPANY
STATEMENTS OF CASH FLOWS (continued)
THREE MONTHS ENDED
JUNE 30,
1996 1995
(Unaudited) (Unaudited)
Proceeds from issuance of convertible
preferred stock, net of offering
costs $ 3,733,941 $ 6,620,661
Proceeds from exercise of common
stock options 7,500 500
Collection of note receivable for
common stock 24,000 --
NET CASH FROM FINANCING
ACTIVITIES 5,544,750 5,795,059
NET INCREASE IN CASH AND
CASH EQUIVALENTS 1,572,118 3,798,651
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 127,936 16,205
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 1,700,054 $ 3,814,856
See accompanying notes to financial statements.
<PAGE>
GALAXY FOODS COMPANY
NOTES TO FINANCIAL STATEMENTS
(1) Management representation
The interim financial statements of Galaxy Foods Company (the
"Company") included herein are unaudited. In the opinion of
management, the financial statements include all adjustments that are
necessary for a fair presentation of such information for the periods
presented.
(2) Reclassifications
Certain items in the financial statements of prior periods have been
reclassified to conform to current period presentation.
(3) Change in Method of Accounting for Stock-Based Compensation
Effective April 1, 1995, the Company adopted the Statement of Financial
Accounting Standards No. 123 ("SFAS 123"), "Accounting for Stock-
Based Compensation" which establishes fair value as the measurement
basis for transactions in which an entity acquires goods or services from
nonemployees in exchange for equity instruments. Under the provisions of
SFAS 123, the Company has elected not to adopt the fair value method for
stock issued to employees, but will instead account for all employee stock
transactions under APB Opinion No. 25, "Accounting for Stock Issued to
Employees."
(4) Inventories
Inventories are summarized as follows:
JUNE 30, MARCH 31,
1996 1996
(unaudited)
Raw materials $ 1,047,597 $ 770,940
Finished goods 621,267 417,734
Total $ 1,668,864 $ 1,188,674
(5) Sale of Securities
On April 16, 1996, the Company completed a private placement of
1,337,524 shares of the Company's common stock at an aggregate price of
$2,000,000, and 4,000 shares of the Company's convertible preferred stock
at an aggregate price of $4,000,000. The holders of the convertible
preferred stock have the right to convert such shares into shares of the
Company's common stock at any time after June 30, 1996 at a conversion
price equal to 71.5% of the average market price of the common stock for
the five consecutive trading days ending one trading day prior to the date
of the Company's receipt of a notice of conversion from the holder;
provided that none of the buyers' aggregate shares of the Company's
common stock exceed 4.9% of the then outstanding shares of common
stock.
<PAGE>
GALAXY FOODS COMPANY
NOTES TO FINANCIAL STATEMENTS
(Continued)
(6) Net Loss per Share
Loss per share is computed based on the weighted average number of
shares outstanding during the period. Common stock equivalents have not
been included since the effect would be antidilutive.
(7) Note Payable
Note payable consisted of an unsecured note payable to a third party,
bearing interest at prime plus 3% (11.25% at March 31, 1996). The entire
balance plus accrued interest was paid in full by June 30, 1996.
(8) Common Stock Options and Warrants Issued for Consulting
During the three months ended June 30, 1996, consulting expense of
$31,231 was recognized on common stock warrants granted to consultants.
In addition, $337,562 has been recorded in other assets as of June 30, 1996
for the value of warrants issued for future services. All such options and
warrants were recorded as additional paid-in capital during the three
months ended June 30, 1996 and the fiscal year ended March 31, 1996.
(9) Supplemental Cash Flow Information
For purposes of the statement of cash flows, all highly liquid investments
with a maturity date of three months or less are considered to be cash
equivalents. Cash and cash equivalents include checking accounts, money
market funds and certificates of deposits.
For the three months ended June 30, 1996 1995
Noncash financing and investing activities:
Deferred public offering costs
applied to the proceeds -- 403,164
Cash paid for:
Interest 14,557 20,372
<PAGE>
GALAXY FOODS COMPANY
Management's Discussion and Analysis of Financial Conditions
and Results of Operations
Results of Operations
Net Sales were $3,354,980 in the quarter ended June 30, 1996, compared
to net sales of $757,579 for the quarter ended June 30, 1995. The 343%
increase in sales was attributed to the introduction of new and improved
products to the retail market, as well as the escalation of orders from major
foodservice customers at the end of fiscal 1996 and throughout the first
quarter of fiscal 1997. Also, there was a large increase in marketing
activities promoting these new products. In addition, the Company was
able to improve its cash flow position from financing activities, allowing it
to fill customer orders on a timely basis which was a problem in the first
quarter of fiscal 1996. (See "Management's Discussion and Analysis of
Financial Conditions and Results of Operations - Liquidity and Capital
Resources").
Cost of Goods Sold were $2,951,616 representing 88% of net sales for the
quarter ended June 30, 1996, compared with $671,664 or 89% of net sales
for the same period ended June 30, 1995. This is a vast improvement over
the fiscal 1996 annual average of 106%. Management will continue to
focus on reducing cost of goods sold as a percentage of net sales in the
coming quarters through production efficiencies, price control and changes
in the product mix.
Selling expenses were $364,957 for the quarter ended June 30, 1996,
compared with selling expenses of $192,570 for the same period ended
June 30, 1995. The 90% increase in expenses over the same period a year
ago is mainly attributed to an increase in marketing efforts resulting in
initial product introduction charges, and increased advertising and
brokerage costs. For the comparable period on year ago, strict cost
reductions were put into place due to a lack of working capital; therefore,
the Company's marketing, advertising and brokerage expenditures were
considerably less.
Delivery expenses were $116,976 for the quarter ended June 30, 1996,
compared with expenses of $50,164 for the same period ended June 30,
1995. The increase in delivery costs is a direct result of the increase in
sales shipments to customers.
General and Administrative expenses were $336,213 for the quarter ended
June 30, 1996, compared with $259,927 for the same period ended June
30, 1995. The 29% increase is attributed mostly to charges for consulting
services and increased salary expenses.
Research and Development expenses increased $29,118 to $58,541 for the
quarter ended June 30, 1996 when compared to the same period for the
prior year. This increase in expense is due largely to employee relocation
allowances paid during the first quarter of fiscal 1997 and costs associated
<PAGE>
with product reformulation. The Company does not expect to pay any
further relocation allowances this fiscal year.
Other Income and Expense for the period ended June 30, 1996 resulted in
income of $34,090 compared to income of $14,009 for the same period last
year. The $20,081 increase in income resulted from an increase in interest
income from the additional cash reserves produced by the sale of the
Company's securities and a decrease in interest expense due to lower debt
in the first quarter of fiscal 1997. (See "Management's Discussion and
Analysis of Financial Conditions and Results of Operations - Liquidity and
Capital Resources").
Liquidity and Capital Resources
Operating Activities -- Net cash used in operating activities was
$1,507,842 for the period ended June 30, 1996 compared to net cash used
of $1,084,676 for the same period in 1995. This increase resulted from the
build-up of inventory and receivables over prior year levels as a result of
the increase in the Company's sales.
Investing Activities -- Net cash used in investing activities totaled
$2,464,790 for the period ended June 30, 1996 compared to net cash used
of $911,732 for the same period in 1995. This large increase was the
result of the Company investing its cash reserves from its financing
activities into marketable securities during the first quarter of fiscal 1997.
Financing Activities -- Net cash flows from financing activities were
$5,544,750 for the three months ended June 30, 1996 compared to
$5,795,059 for the same period in 1995. The large cash flows from
financing activities resulted from a Regulation D offering of the Company's
stock in fiscal 1997 and a Regulation S offering of the Company's stock in
fiscal 1996.
On April 16, 1996, the Company completed a private placement of
1,337,524 shares of the Company's common stock at an aggregate price of
$2,000,000, and 4,000 shares of the Company's convertible preferred stock
at an aggregate price of $4,000,000.
On March 3, 1995, the Company began to offer certain of its securities to
non-US. persons under Regulation S promulgated by the Securities and
Exchange Commission under the Securities Act of 1933, as amended.
These sales of securities continued through the beginning of June 1995
with sales totaling 5,590,372 shares of Common Stock at the average price
of $0.92 per share. Additionally, the Company sold 353,755 shares of the
Company's convertible preferred stock at an average price of $20.06 per
share for total gross proceeds of $7,095,700. The resulting proceeds from
all securities sold during the offering were approximately $12.2 million, of
which $2,088,360 was used to pay investment brokerage commissions and
related offering fees and over $3 million was used to eliminate the
principal and accrued interest on all debt owed to stockholders.
<PAGE>
The Company does not currently have a bank line of credit; therefore,
management finds it necessary to fund all operations through working
capital, internally generated cash flow, private placements and short-term
financing obtained from the Company's shareholders. A bank line of credit
is an essential source of working capital for the Company in order to
continue rapid expansion and to introduce new products into the market
place. Therefore, the Company will continue pursuing a relationship with
a financial institution in order to establish a line of credit. However, the
Company does have in place a factoring agreement with J.T.A. Factors,
Inc. ("J.T.A.") of Greenville, South Carolina, whereby the Company may
sell certain of its accounts receivable to J.T.A. on a pre-approved full
recourse basis. The factoring charge equals .73% of the receivables sold.
The Company is permitted to receive advances up to 85% of uncollected
accounts factored at the time the receivables are placed with J.T.A., with
the remaining 15%, less the .73% factoring charge, being paid to the
Company upon collection. At June 30, 1996, the Company was not
factoring any of its accounts receivable. Additionally, the Company is
negotiating with several of its vendors and suppliers to obtain favorable
terms with respect to the Company's purchase of materials and supplies.
In exchange for such favorable terms, the Company has established letters
of credit and certificates of deposits in favor of these vendors to secure the
Company's purchase of certain materials and supplies.
PART II. OTHER INFORMATION
GALAXY FOODS COMPANY
ITEM 6. Exhibits and Reports on Form 8-K
The following Exhibits are filed as part of this Form 10-QSB.
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
One report on Form 8-K was filed by Galaxy Foods Company on April 19,
1996 reporting the sale of the Company's common and convertible
preferred stock under Regulation D during the quarter ended June 30,
1996.
<PAGE>
EXHIBIT INDEX
The following Exhibits are filed as part of this Form 10-QSB.
Exhibit No. Exhibit Description
* 3.1 Certificate of Incorporation of the Company, as amended
(Filed as Exhibit 3.1 to the Company's Registration
Statement on Form S-18, No. 33-15893-NY,
incorporated herein by reference.)
* 3.2 Amendment to Certificate of Incorporation of the
Company, filed on February 24, 1992 (Filed as Exhibit
4(b) to the Company's Registration Statement on Form S-
8, No. 33-46167, incorporated herein by reference.)
* 3.3 By-laws of the Company, as amended (Filed as Exhibit
3.2 to the Company's Registration Statement on Form S-
18, No. 33-15893-NY, incorporated herein by reference.)
* 3.4 Amendment to Certificate of Incorporation of the
Company, filed on January 19, 1994 (Filed as Exhibit 3.4
to the Company's Registration Statement on Form SB-2,
No. 33-80418, and incorporated herein by reference.)
* 3.5 Amendment to Certificate of Incorporation of the
Company, filed on July 11, 1996 (Filed as Exhibit 3.5 on
report 10-KSB for the fiscal year ended March 31, 1996,
and incorporated herein by reference.)
* 3.6 Amendment to Certificate of Incorporation of the
Company, filed on January 31, 1996 (Filed as Exhibit 3.6
on report 10-KSB for the fiscal year ended March 31,
1996, and incorporated herein by reference.)
* 4.1 Certificate of Designations, Preferences and Rights of
Series A Convertible Preferred Stock of Galaxy Foods
Company, as filed with the Secretary of State of
Delaware on April 16, 1996 (Filed as Exhibit 4.1 on
report 8-K, filed for events occurring as of April 16,
1996, and incorporated herein by reference.)
*10.1 1987 Stock Plan of the Company, as amended (Filed as
Exhibit 4(d) to the Company's Registration Statement on
Form S-8, No. 33-46167, incorporated herein by
reference.)
* - Previously filed
<PAGE>
Exhibit No Exhibit Description
*10.2 Form of Non-Qualified Stock Option Agreement between
the Company and certain directors (Filed as Exhibit 10
(n) to the Company's Report on Form 10-K for fiscal year
ended March 31, 1988, and incorporated herein by
reference.)
*10.3 Form of Incentive Stock Option Agreement issued
pursuant to the Company's 1987 Stock Plan (Filed as
Exhibit 10 (o) to the Company's Report on Form 10-K for
fiscal year ended March 31, 1988, and incorporated
herein by reference.)
*10.4 1991 Non-Employee Director Stock Option Plan of the
Company (Filed as Exhibit 4 (g) to the Company's
Registration Statement on Form S-8, No. 33-46167,
incorporated herein by reference.)
*10.5 1991 Employee Stock Purchase Plan of the Company
(Filed as Exhibit 4 (h) to the Company's Registration
Statement on Form S-8, No. 33-46167, incorporated
herein by reference.)
*10.6 Lease Agreement between ANCO Company and
Company dated as of November 13, 1991 (Filed as
Exhibit 10 (bb) to the Company's Report on Form 10-K
for fiscal year ended March 31, 1992, and incorporated
herein by reference.)
*10.7 Factoring Agreement, Assignment and Repurchase
Agreement, Security Agreement and Power of Attorney,
dated as of June 1, 1993, between the Company and
J.T.A. Factors, Inc. (Filed as Exhibit 10 (nn) to the
Company's Report on Form 10-QSB for the quarterly
period ended June 30, 1993.)
*10.8 Company's Registration Statement on Form S-8, Number
33-69546, filed September 28, 1993 (Filed as Exhibit
10.40 to the Company's Registration Statement on Form
SB-2, No. 33-80418, and incorporated herein by
reference.)
*10.9 Post-Effective Amendment No. 1 to Company's
Registration Statement on Form S-8, No. 33-69546, filed
October 28, 1993 (Filed as Exhibit 10.41 to the
Company's Registration Statement on Form SB-2, No.
33-80418, and incorporated herein by reference.)
* - Previously filed
<PAGE>
Exhibit No Exhibit Description
*10.10 Company's Registration Statement on Form S-8, No. 33-
78684, filed May 6, 1994 (Filed as Exhibit 10.42 to the
Company's Registration Statement on Form SB-2, No.
33-80418, and incorporated herein by reference.)
*10.11 Post-Effective Amendment No. 1 to Company's
Registration Statement on Form S-8, No. 33-78684
(Filed June 6, 1994, and incorporated herein by
reference.)
*10.12 Company's Registration Statement on Form S-8, No. 33-
81636 (Filed July 18, 1994, and incorporated herein by
reference.)
*10.13 Post-Effective Amendment No. 1 to Company's
Registration Statement on Form S-8, No. 33-81636
(Filed August 10, 1994, and incorporated herein by
reference.)
*10.14 Subscription for shares and investment letter, dated
November 4, 1994, between the Company and Angelo S.
Morini (Filed as Exhibit 10.122 on report 10-QSB, for
the quarterly period ended December 31, 1994, and
incorporated herein by reference.)
*10.15 Balloon promissory note, dated November 4, 1994 (Filed
as Exhibit 10.123 on report 10-QSB, for the quarterly
period ended December 31, 1994, and incorporated
herein by reference.)
*10.16 Stock pledge and security agreement dated November 4,
1994 (Filed as Exhibit 10.124 on report 10-QSB, for the
quarterly period ended December 31, 1994, and
incorporated herein by reference.)
*10.17 First Amendment to Lease Agreement between ANCO
Company and the Company dated as of April 1, 1994
(Filed as Exhibit 10.76 on report 10-KSB for the fiscal
year ended March 31, 1995, and incorporated herein by
reference.)
*10.18 Consulting Agreement, dated March 15, 1995, between Lee Chira and
the Company (Filed as Exhibit 10.77 on report 10-KSB for the fiscal
year ended March 31, 1995, and incorporated herein by reference.)
* - Previously filed
<PAGE>
Exhibit No Exhibit Description
*10.19 Consulting Agreement, dated March 15, 1995, between
Martin Consulting, Inc. and the Company (Filed as
Exhibit 10.78 on report 10-KSB for the fiscal year ended
March 31, 1995, and incorporated herein by reference.)
*10.20 Selling Agreement, dated February 6, 1995, between
Sands Brothers & Co., Ltd. and the Company (Filed as
Exhibit 10.79 on report 10-KSB for the fiscal year ended
March 31, 1995, and incorporated herein by reference.)
*10.21 Amendment Number 1 to Selling Agreement, dated
February 14, 1995, between Sands Brothers & Co., Ltd.
and the Company (Filed as Exhibit 10.80 on report 10-
KSB for the fiscal year ended March 31, 1995, and
incorporated herein by reference.)
*10.22 Amendment Number 2 to Selling Agreement, dated
March 8, 1995, between Sands Brothers & Co., Ltd. and
the Company (Filed as Exhibit 10.81 on report 10-KSB
for the fiscal year ended March 31, 1995, and
incorporated herein by reference.)
*10.23 Consulting agreement between the Company and Koi
Communications Corporation, dated June 1, 1995. (Filed
as Exhibit 10.82 on report 10-QSB for the quarterly
period ended June 30, 1995, and incorporated herein by
reference.)
*10.24 Employment Agreement dated as of October 10, 1995, by
and between the Company and Angelo S. Morini (Filed
as Exhibit 10.83 on report 8-K, filed for events occurring
as of October 11, 1995, and incorporated herein by
reference.)
*10.25 Balloon Promissory Note dated as of October 11, 1995,
by Angelo S. Morini in favor of the Company (Filed as
Exhibit 10.84 on report 8-K, filed for events occurring as
of October 11, 1995, and incorporated herein by reference.)
*10.26 Stock Pledge and Security Agreement dated as of October
11, 1995, by and between the Company and Angelo S.
Morini (Filed as Exhibit 10.85 on report 8-K, filed for
events occurring as of October 11, 1995, and
incorporated herein by reference.)
* - Previously filed
<PAGE>
Exhibit No Exhibit Description
*10.27 Consulting agreement between the Company and
Marshall K. Luther dated August 28, 1995 (Filed as
Exhibit 10.86 on Form 10-QSB/A for the nine months
ended December 31, 1995, and incorporated herein by
reference.)
*10.28 Amendment to Factoring Agreement (original agreement
dated June 1, 1993) dated January 29, 1996 between the
Company and J.T.A. Factors, Inc. (Filed as Exhibit 10.28
on report 10-KSB for the fiscal year ended March 31,
1996, and incorporated herein by reference.)
*10.29 Securities Purchase Agreement, dated April 16, 1996, by
and among Galaxy Foods Company and the buyers party
thereto (Filed as Exhibit 10.74 on report 8-K, filed for
events occurring as of April 16, 1996, and incorporated
herein by reference.)
*10.30 Registration Rights Agreement, dated April 16, 1996, by
and among Galaxy Foods Company and the buyers party
thereto (Filed as Exhibit 10.75 on report 8-K, filed for
events occurring as of April 16, 1996, and incorporated
herein by reference.)
27 Financial Data Schedule (Filed herewith.)
*99.1 Press Release issued by the Company dated April 17,
1996 (Filed as Exhibit 99.1 on report 8-K, filed for
events occurring as of April 16, 1996, and incorporated
herein by reference.)
* - Previously filed
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
GALAXY FOODS COMPANY
Date: July 30, 1996 /s/ Angelo S. Morini
Angelo S. Morini
Chairman and President
(Principal Executive Officer)
Date: July 30, 1996 /s/ LeAnn H. Davis
LeAnn H. Davis, CPA
Chief Financial Officer
(Principal Financial and
Accounting Officer)
<PAGE>
"EXHIBITS"
<PAGE>
Exhibit No Exhibit Description Page No.
* 3.1 Certificate of Incorporation of the Company, as
amended (Filed as Exhibit 3.1 to the Company's
Registration Statement on Form S-18, No. 33-
15893-NY, incorporated herein by reference.)
* 3.2 Amendment to Certificate of Incorporation of
the Company, filed on February 24, 1992
(Filed as Exhibit 4(b) to the Company's
Registration Statement on Form S-8, No. 33-
46167, incorporated herein by reference.)
* 3.3 By-laws of the Company, as amended (Filed as
Exhibit 3.2 to the Company's Registration
Statement on Form S-18, No. 33-15893-NY,
incorporated herein by reference.)
* 3.4 Amendment to Certificate of Incorporation of
the Company, filed on January 19, 1994 (Filed
as Exhibit 3.4 to the Company's Registration
Statement on Form SB-2, No. 33-80418, and
incorporated herein by reference.)
* 3.5 Amendment to Certificate of Incorporation of
the Company, filed on July 11, 1995 (Filed as
Exhibit 3.5 on report 10-KSB for the fiscal year
ended March 31, 1996, and incorporated herein
by reference.)
* 3.6 Amendment to Certificate of Incorporation of
the Company, filed on January 31, 1996 (Filed
as Exhibit 3.6 on report 10-KSB for the fiscal
year ended March 31, 1996, and incorporated
herein by reference.)
* 4.1 Certificates of Designations, Preferences and
Rights of Series A Convertible Preferred
Stock of Galaxy Foods Company, as filed with
the Secretary of State of Delaware on April 16,
1996 (Filed as Exhibit 4.1 on report 8-K, filed
for events occurring as of April 16, 1996,and
incorporated herein by reference.)
*10.1 1987 Stock Plan of the Company, as amended
(Filed as Exhibit 4(d) to the Company's
Registration Statement on Form S-8, No. 33-
46167, incorporated herein by reference.)
* - Previously filed
<PAGE>
Exhibit No Exhibit Description Page No.
*10.2 Form of Non-Qualified Stock Option Agreement
between the Company and certain directors
(Filed as Exhibit 10 (n) to the Company's Report
on Form 10-K for fiscal year ended March 31,
1988, and incorporated herein by reference.)
*10.3 Form of Incentive Stock Option Agreement
issued pursuant to the Company's 1987 Stock
Plan (Filed as Exhibit 10 (o) to the Company's
Report on Form 10-K for fiscal year ended
March 31, 1988, and incorporated herein by
reference.)
*10.4 1991 Non-Employee Director Stock Option Plan
of the Company (Filed as Exhibit 4 (g) to the
Company's Registration Statement on Form S-8,
No. 33-46167, incorporated herein by
reference.)
*10.5 1991 Employee Stock Purchase Plan of the
Company (Filed as Exhibit 4 (h) to the
Company's Registration Statement on Form S-8,
No. 33-46167, incorporated herein by
reference.)
*10.6 Lease Agreement between ANCO Company and
Company dated as of November 13, 1991 (Filed
as Exhibit 10 (bb) to the Company's Report on
Form 10-K for fiscal year ended March 31,
1992, and incorporated herein by reference.)
*10.7 Factoring Agreement, Assignment and
Repurchase Agreement, Security Agreement and
Power of Attorney, dated as of June 1, 1993,
between the Company and J.T.A. Factors, Inc.
(Filed as Exhibit 10 (nn) to the Company's
Report on Form 10-QSB for the quarterly period
ended June 30, 1993.)
*10.8 Company's Registration Statement on Form S-8,
No. 33-69546, filed September 28, 1993 (Filed
as Exhibit 10.40 to the Company's Registration
Statement on Form SB-2, No. 33-80418, and
incorporated herein by reference.)
* - Previously filed
<PAGE>
Exhibit No Exhibit Description Page No.
*10.9 Post-Effective Amendment No. 1 to Company's
Registration Statement on Form S-8, No. 33-
69546, filed October 28, 1993 (Filed as Exhibit
10.41 to the Company's Registration Statement
on Form SB-2, No. 33-80418, and incorporated
herein by reference.)
*10.10 Company's Registration Statement on Form S-8,
No. 33-78684, filed May 6, 1994 (Filed as
Exhibit 10.42 to the Company's Registration
Statement on Form SB-2, No. 33-80418, and
incorporated herein by reference.)
*10.11 Post-Effective Amendment No. 1 to Company's
Registration Statement on Form S-8, No. 33-
78684 (Filed June 6, 1994, and incorporated
herein by reference.)
*10.12 Company's Registration Statement on Form S-8,
No. 33-81636 (Filed July 18, 1994, and
incorporated herein by reference.)
*10.13 Post-Effective Amendment No. 1 to Company's
Registration Statement on Form S-8, No. 33-
81636 (Filed August 10, 1994, and incorporated
herein by reference.)
*10.14 Subscription for shares and investment letter,
dated November 4, 1994, between the Company
and Angelo S. Morini (Filed as Exhibit 10.122
on report 10-QSB, for the quarterly period
ended December 31, 1994, and incorporated
herein by reference.)
*10.15 Balloon promissory note, dated November 4,
1994 (Filed as Exhibit 10.123 on report 10-
QSB, for the quarterly period ended December
31, 1994, and incorporated herein by reference.)
*10.16 Stock pledge and security agreement dated
November 4, 1994 (Filed as Exhibit 10.124 on
report 10-QSB, for the quarterly period ended
December 31, 1994, and incorporated herein by
reference.)
* - Previously filed
<PAGE>
Exhibit No Exhibit Description Page No.
*10.17 First Amendment to Lease Agreement between
ANCO Company and the Company dated as of
April 1, 1994 (Filed as Exhibit 10.76 on report
10-KSB for the fiscal year ended March 31,
1995, and incorporated herein by reference.)
*10.18 Consulting Agreement, dated March 15, 1995,
between Lee Chira and the Company (Filed as
Exhibit 10.77 on report 10-KSB for the fiscal
year ended March 31, 1995, and incorporated
herein by reference.)
*10.19 Consulting Agreement, dated March 15, 1995,
between Martin Consulting, Inc. and the
Company (Filed as Exhibit 10.78 on report 10-
KSB for the fiscal year ended March 31, 1995,
and incorporated herein by reference.)
*10.20 Selling Agreement, dated February 6, 1995,
between Sands Brothers & Co., Ltd. and the
Company (Filed as Exhibit 10.79 on report 10-
KSB for the fiscal year ended March 31, 1995,
and incorporated herein by reference.)
*10.21 Amendment Number 1 to Selling Agreement,
dated February 14, 1995, between Sands
Brothers & Co., Ltd. and the Company (Filed as
Exhibit 10.80 on report 10-KSB for the fiscal
year ended March 31, 1995, and incorporated
herein by reference.)
*10.22 Amendment Number 2 to Selling Agreement,
dated March 8, 1995, between Sands Brothers &
Co., Ltd. and the Company (Filed as Exhibit
10.81 on report 10-KSB for the fiscal year ended
March 31, 1995, and incorporated herein by
reference.)
*10.23 Consulting agreement between the Company
and Koi Communications Corporation, dated
June 1, 1995. (Filed as Exhibit 10.82 on report
10-QSB for the quarterly period ended June 30,
1995, and incorporated herein by reference.)
*10.24 Employment Agreement dated as of October 10,
1995, by and between the Company and Angelo
S. Morini (Filed as Exhibit 10.83 on report 8-K,
filed for events occurring as of October 11,
1995, and incorporated herein by reference.)
* - Previously filed
<PAGE>
Exhibit No Exhibit Description Page No.
*10.25 Balloon Promissory Note dated as of October 11,
1995, by Angelo S. Morini in favor of the
Company (Filed as Exhibit 10.84 on report 8-K,
filed for events occurring as of October 11,
1995, and incorporated herein by reference.)
*10.26 Stock Pledge and Security Agreement dated as
of October 11, 1995, by and between the
Company and Angelo S. Morini (Filed as
Exhibit 10.85 on report 8-K, filed for events
occurring as of October 11, 1995, and
incorporated herein by reference.)
*10.27 Consulting agreement between the Company
and Marshall K. Luther dated August 28, 1995
(Filed as Exhibit 10.86 on Form 10-QSB/A for
the nine months ended December 31, 1995, and
incorporated herein by reference.)
*10.28 Amendment to Factoring Agreement (original
agreement dated June 1, 1993) dated January
29, 1996 between the Company and J.T.A.
Factors, Inc. (Filed as Exhibit 10.81 on report
10-KSB for the fiscal year ended March 31,
1996, and incorporated herein by reference.)
*10.29 Securities Purchase Agreement, dated April 16,
1996, by and among Galaxy Foods Company
and the buyers party thereto (Filed as Exhibit
10.74 on report 8-K, filed for events occurring
as of April 16, 1996, and incorporated herein by
reference.)
*10.30 Registration Rights Agreement, dated April 16,
1996, by and among Galaxy Foods Company
and the buyers party thereto (Filed as Exhibit
10.75 on report 8-K, filed for events occurring
as of April 16, 1996, and incorporated herein by
reference.)
27 Financial Data Schedule (Filed herewith.) 5
*99.1 Press Release issued by the Company dated
April 17, 1996 (Filed as Exhibit 99.1 on report
8-K, filed for events occurring as of April 16,
1996,and incorporated herein by reference.)
* - Previously filed
<PAGE>
Reports on Form 8-K
One report on Form 8-K was filed by Galaxy Foods
Company on April 19, 1996 reporting the sale of the
Company's common and convertible preferred stock
under Regulation D during the quarter ended June 30,
1996.
</TABLE>
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<CASH> 1,700,054
<SECURITIES> 2,013,742
<RECEIVABLES> 1,479,643
<ALLOWANCES> 137,420
<INVENTORY> 1,668,864
<CURRENT-ASSETS> 7,070,063
<PP&E> 6,862,578
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0
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<TOTAL-LIABILITY-AND-EQUITY> 13,133,326
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<INCOME-CONTINUING> (439,233)
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