-----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, KpCv7SBLpZyDsRPWGx14LqI4n0NJlZ7gTg974nJg4/4hh1fQLPbA6kL9ofUlDRT9 jHgsC5OYrTZx1x8faVdEBw== 0000950144-96-001618.txt : 19960416 0000950144-96-001618.hdr.sgml : 19960416 ACCESSION NUMBER: 0000950144-96-001618 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960229 FILED AS OF DATE: 19960412 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLORAFAX INTERNATIONAL INC CENTRAL INDEX KEY: 0000037525 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 410719035 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-05531 FILM NUMBER: 96546571 BUSINESS ADDRESS: STREET 1: 8075 20TH STREET CITY: VERO BEACH STATE: FL ZIP: 32966 BUSINESS PHONE: 4075630263 MAIL ADDRESS: STREET 1: 8075 20TH STREET CITY: VERO BEACH STATE: FL ZIP: 32966 FORMER COMPANY: FORMER CONFORMED NAME: SPOTTS FLORAFAX CORP DATE OF NAME CHANGE: 19740924 FORMER COMPANY: FORMER CONFORMED NAME: SPOTTS CORP DATE OF NAME CHANGE: 19671205 FORMER COMPANY: FORMER CONFORMED NAME: SPOTTS MAILING CORP DATE OF NAME CHANGE: 19671205 10QSB 1 FLORAFAX INTERNATIONAL, INC FORM 10-QSB 2/29/96 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended February 29, 1996 ----------------- [ ] Transition Report Under Section 13 or 15(d) of the Exchange Act For the transition period from to ---------------- ---------------- Commission File Number: 0-5531 ------------------------------------------------ FLORAFAX INTERNATIONAL, INC. ----------------------------- (Exact name of small business issuer as specified in its charter) Delaware 41-0719035 ------------------------------- ------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 8075 20th Street, Vero Beach, Florida 32966 -------------------------------------------------------------------- (Address of principal executive offices) 407-563-0263 ------------ (Issuer's telephone number) - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 --- --- The registrant had 6,022,973 shares of common stock, $0.01 par value, outstanding at February 29, 1996, Transitional Small Business Disclosure Format (Check one): Yes ; No X ------ ------ 2 INDEX PART I FINANCIAL INFORMATION Page No. --------------------- Item 1. Financial Statements (Unaudited): Consolidated Balance Sheets February 29, 1996 and August 31, 1995 1 - 2 Consolidated Statements of Income and Accumulated Deficit Three Months and Six Months Ended February 29, 1996 and February 28, 1995 3 Consolidated Statements of Cash Flows Six Months Ended February 29, 1996 and February 28, 1995 4 - 5 Notes to Consolidated Financial Statements 6 - 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 - 12 PART II OTHER INFORMATION ----------------- Item 1. Legal Proceedings 13 Item 2. Changes in Securities 13 Item 3. Defaults Upon Senior Securities 13 Item 4. Submission of Matters to a Vote of Security Holders 13 - 14 Item 5. Other Information 14 Item 6. Exhibits and Reports on Form 8-K 14 - 16 Signatures 17
3 FLORAFAX INTERNATIONAL, INC. Consolidated Balance Sheets
(In Thousands) ASSETS February 29 August 31 1996 1995 ----------- --------- (Unaudited) CURRENT ASSETS: Cash and cash equivalents $3,349 $1,972 Restricted cash and investments 107 566 Accounts receivable: Members, less allowances of $465 at February 29, 1996 and $706 at August 31, 1995 1,653 1,289 Charge card issuers 682 225 Other 257 34 ------ ------ 2,592 1,548 Prepaid and other assets 109 31 ------ ------ TOTAL CURRENT ASSETS 6,157 4,117 Property and equipment, at cost: Fixtures and equipment 605 1,347 Computer systems 539 1,114 Communication systems 1,268 1,516 Leasehold improvements 23 311 ------ ------ 2,435 4,288 Accumulated depreciation and amortization 2,163 3,919 ------ ------ 272 369 Other assets: Excess of cost over net assets of acquired business 1,995 1,995 Other 321 371 ------ ------ 2,316 2,366 ------ ------ TOTAL ASSETS $8,745 $6,852 ====== ======
See accompanying notes. 1 4 FLORAFAX INTERNATIONAL, INC. Consolidated Balance Sheets
(In Thousands) LIABILITIES AND STOCKHOLDERS' NET CAPITAL DEFICIENCY February 29 August 31 1996 1995 ---------- --------- (Unaudited) CURRENT LIABILITIES: Current maturities of long-term debt 2,578 466 Accounts payable 5,453 3,919 Accrued liabilities: Member benefits 162 150 Other 1,085 980 ------ ------ TOTAL CURRENT LIABILITIES 9,278 5,515 Long-term debt, less current maturities: 9 1/2% convertible subordinated notes 2,567 Other 365 467 ------ ------ 365 3,034 Membership security deposits 49 59 Unearned directory income 35 ------ ------ TOTAL LIABILITIES 9,727 8,608 Stockholders' net capital deficiency: Preferred stock (par value $10, 600,000 shares authorized, none issued) Common stock - ( par value $.01, 18,000,000 shares authorized, 6,045,973 and 5,793,874 issued at February 29, 1996 and August 31, 1995, respectively, 6,022,973 and 5,770,874 outstanding at February 29, 1996 and August 31, 1995, respectively 61 58 Additional paid-in capital 7,409 7,381 Accumulated deficit (8,452) (9,195) ------ ------ TOTAL STOCKHOLDERS' NET CAPITAL DEFICIENCY (982) (1,756) ------ ------ TOTAL LIABILITIES AND STOCKHOLDERS' NET CAPITAL DEFICIENCY $8,745 $6,852 ====== ======
See accompanying notes. 2 5 FLORAFAX INTERNATIONAL, INC. Consolidated Statements of Income and Accumulated Deficit (In Thousands Except per Share Data)
Three Months Ended Six Months Ended --------------------------- ------------------------------ February 29 February 28 February 29 February 28 1996 1995 1996 1995 ----------- ----------- ----------- ----------- (Unaudited) NET REVENUES: Member dues and fees $ 507 $ 501 $ 976 $ 977 Floral and other order processing 1,186 820 1,770 1,186 Directory and advertising fees 296 301 592 593 Charge card processing 348 344 658 738 Other revenue 13 7 37 17 ------ ------ ------ ------ 2,350 1,973 4,033 3,511 EXPENSES: General and administrative 1,416 1,340 2,543 2,449 Selling, advertising and promotion 215 116 372 266 Directory publishing 81 75 157 153 Depreciation, amortization and retirements 103 109 206 219 ------ ------ ------ ------ 1,815 1,640 3,278 3,087 ------ ------ ------ ------ OPERATING INCOME 535 333 755 424 OTHER INCOME (EXPENSE): Interest expense (80) (77) (158) (153) Other -- 1 5 Interest income 26 -- 46 -- ------ ------ ------ ------ (54) (77) (111) (148) ------ ------ ------ ------ INCOME BEFORE TAXES AND EXTRAORDINARY ITEM $ 481 $ 256 $ 644 $ 276 ------ ------ ------ ------ INCOME TAXES 20 26 ------ ------ ------ ------ INCOME BEFORE EXTRAORDINARY ITEM 461 256 618 276 EXTRAORDINARY ITEM (GAIN ON FORGIVENESS OF DEBT) LESS APPLICABLE INCOME TAXES 125 125 ------ ------ ------ ------ NET INCOME 586 256 743 276 Accumulated deficit at beginning of period (9,038) (9,882) (9,195) (9,902) Accumulated deficit at end of period (8,452) (9,626) (8,452) (9,626) ====== ====== ====== ====== Primary and fully diluted earnings per common share: Income before extraordinary item $ 0.06 $ 0.04 $ 0.09 $ 0.05 Extraordinary item 0.02 0.00 0.02 0.00 ------ ------ ------ ------ NET INCOME $ 0.08 $ 0.04 $ 0.11 $ 0.05 ====== ====== ====== ======
See accompanying notes. 3 6 FLORAFAX INTERNATIONAL, INC. Consolidated Statements of Cash Flows (In Thousands)
Six months ended February 29 February 28 1996 1995 ----------- ----------- (Unaudited) OPERATING ACTIVITIES Net income $743 $276 ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Depreciation, amortization, and retirements 150 170 Provision for doubtful accounts 103 143 Non cash compensation expense 37 Increase (decrease) in cash flows due to changes in: Accounts receivable (1,147) (276) Prepaid and other assets (78) (52) Other assets 50 52 Accounts payable 1,534 1,219 Accrued liabilities 152 371 Unearned directory income 30 Membership security deposits (10) (3) ------ ------ Net cash provided by operating activities 1,497 1,967 INVESTING ACTIVITIES Capital expenditures (53) (80) Release of restricted cash 459 ------ ------ Net cash (used in) provided by investing activities $406 ($80)
(Continued) 4 7 FLORAFAX INTERNATIONAL, INC. Consolidated Statements of Cash Flows (In Thousands)
Six months ended February 29 February 28 1996 1995 ----------- ----------- (Unaudited) FINANCING ACTIVITIES Proceeds from issuing debt 2,500 Proceeds from issuing stock 31 Reduction in bank overdraft (1,065) Payments of debt (3,057) (65) ------- ------- Net cash used in financing activities (526) (1,130) ------- ------- NET INCREASE IN CASH AND CASH EQUIVALENTS 1,377 757 Cash and cash equivalents at beginning of year 1,972 558 ------- ------- CASH AND CASH EQUIVALENTS AT EMD OF PERIOD $ 3,349 $ 1,315 ======= ======= Supplemental disclosures of cash flow information: Cash paid during the period for interest $ 208 $ 143 Cash paid during the period for income tax $ 6 ======= =======
See accompanying notes. 5 8 FLORAFAX INTERNATIONAL, INC. Notes to Consolidated Financial Statements Six Months Ended February 29, 1996 Note (1) Management's Opinion and Accounting Policies The accompanying interim financial statements should be read in conjunction with the Florafax International, Inc. (the Company's) Form 10-KSB for the year ended August 31, 1995. In the opinion of Management the unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the Company's consolidated financial position as of February 29, 1996 and the consolidated results of operations and cash flows for the three months ended February 29, 1996. Historically, the Company's flowers-by-wire operation is seasonal in that its member florists send a much larger volume of orders during Thanksgiving, the Christmas season, Valentine's Day, Easter and Mother's Day. Therefore, the results of operations of an interim period may not necessarily be indicative of the results expected for a full year. In an effort to increase orders to member florists the Company continues to engage in non traditional campaigns through it's wholly owned subsidiary, The Flower Club (800 800 SEND). The Flower Club, Inc. was formed to generate additional orders by pursuing relationships with nationally recognized corporations. The Company engages in joint marketing campaigns with these corporations not only during holidays, but also during non seasonal periods in an effort to provide member florists with orders during slow periods of the year. Floral orders and handling fees generated through The Flower Club have become significant, representing 58% of gross floral order revenue for the six months ended February 29, 1996 compared to 44% for the six months ended February 28, 1995. Management expects orders generated by The Flower Club to continue to represent a significant portion of floral order revenue. Note (2) Contingencies Florafax International, Inc. vs. Bellerose Floral Inc. and GTE Market Resources Inc., et al. During 1990 the Company filed a lawsuit against GTE Market Resources, Inc. (GTE/MR) for failure on the part of GTE/MR to fulfill certain contractual telecommunication services on behalf of Florafax. On November 23, 1993 a jury awarded Florafax $1,481,000 in net damages against GTE/MR. GTE/MR appealed this case and posted bond with the Court in order to do so. On December 22, 1994 this case was assigned to the Oklahoma Court of Appeals by the Oklahoma Supreme Court. On April 4, 1995 the Court of Appeals of the State of Oklahoma released for publication its decision on the appeal filed by GTE/MR. The award to the Company of $743,117 for consequential damages was affirmed. To the extent that the Company was awarded lost profits for two years in the amount of $750,000, the judgment was reversed and remanded for a determination of lost profits as limited by Oklahoma law. 6 9 FLORAFAX INTERNATIONAL, INC. Notes to Consolidated Financial Statements Six Months Ended February 29, 1996 The award to GTE/MR of a set-off amount of $88,750 for unpaid invoices was affirmed, a contractual rate of 18% per annum applied for prejudgment interest was applied and the case remanded for a determination of an award of GTE's reasonable attorney's fees, expenses and other collection costs incurred in recovering the unpaid invoice amounts, but not their fees or expenses in defending against the claims of the Company or in pursuing other unsuccessful aspects of GTE/MR's counterclaim. The denial of the Company's request for attorney's fees was affirmed. The Company and GTE/MR have each petitioned the Oklahoma Supreme Court for writ of certiorari to review the portions of the Oklahoma Court of Appeals decision adverse to their respective interests, and both of the parties appeals have been granted. There are no assurances that the Company will obtain a favorable ruling from the Oklahoma Supreme Court. The Company's legal counsel has tried this case on a contingency fee basis and, accordingly, the Company has incurred minimal expenses related to this litigation. However, the agreement between the Company and its legal counsel stipulates that the Company's attorneys are to receive 40% of the net proceeds now that the case has reached the appellate court. Consequently, the Company is to receive 60% of the ultimate proceeds. Recognition of any of these amounts will not be reflected in the financial statements until ultimate resolution. Other The Company is involved in various disputes involving routine business matters, the resolution of all of which in management's opinion will not have a material adverse effect upon the Company. Note (3) Current Maturities of Debt On February 28, 1996 the Company issued to St. James Capital Partners, Ltd. a secured Convertible Promissory Note ("Note") in the amount of $2,500,000 bearing interest at seven percent per annum with a maturity date of February 28, 1997. The Note is convertible into common stock of the Company at a rate of $1.25 per share on certain terms and conditions contained in the Note. The funds from the Note were used primarily to retire outstanding debt of the Company in the amount of $2,419,000 due to mature September 15, 1996. Prior to the funding of the Note the Company negotiated a discount on its debt in the amount of $124,000. This discount has been reported as an extraordinary gain in the Company's income statement for the quarter and six months ended February 29, 1996. 7 10 FLORAFAX INTERNATIONAL, INC. Notes to Consolidated Financial Statements Six Months Ended February 29, 1996 In conjunction with the issuance of the Promissory Note the Registrant issued to Purchaser a total of 650,000 warrants to purchase Common Stock of the Registrant with an exercise price of $1.00 per share, on the terms and conditions contained in the warrants. Purchaser has also been granted certain registration rights for resale of the shares of common stock issuable upon exercise of the warrants. All of the warrants expire January 1, 2001. Subsequent to February 29, 1996 $500,000 of the original Note and 130,000 warrants were transferred from St. James Capital Partners, Ltd. and were reissued in the name of SV Capital Partners, LP. The new $500,000 note and the 130,000 warrants were issued with the same terms and conditions contained in the original Note and warrants. 8 11 FLORAFAX INTERNATIONAL, INC. Management's Discussion and Analysis of Financial Condition and Results of Operation Liquidity and Capital Resources Sources of cash to meet future requirements are existing cash balances and internally generated funds. For the past several years management had been pursuing various options that would give the Company access to additional working capital. During the second quarter of fiscal 1996 the Company was successful in refinancing the majority of its debt that was due to mature on September 15, 1996, as discussed in the following two paragraphs. On February 28, 1996 the Company issued to St. James Capital Partners, Ltd. a secured Convertible Promissory Note ("Note") in the amount of $2,500,000 bearing interest at seven percent per annum with a maturity date of February 28, 1997. The Note is convertible into common stock of the Company at a rate of $1.25 per share on certain terms and conditions contained in the Note. The funds from the Note were used primarily to retire outstanding debt of the Company in the amount of $2,419,000 due to mature September 15, 1996. Prior to the funding of the Note the Company negotiated a discount on its debt in the amount of $124,000. This discount has been reported as an extraordinary gain in the Company's income statement for the quarter and six months ended February 29, 1996. In addition, as discussed in Note 2, the Company is hopeful that they will reach a settlement with GTE/MR during the current year, which could provide an additional source of working capital. However, there is no guaranty that the Company will receive any funds as a result of the GTE/MR judgment. The Company continues to generate positive cash flow from operations. Cash provided by operations for the six months ended February 29, 1996 was $1,497,000 compared to $1,967,000 for the six months ended February 28, 1995. For the six months ended February 29, 1996 the Company reported a total increase in cash of $1,377,000 compared to an overall cash increase of $757,000 for the six months ended February 28, 1995. Operating cash flows historically have been generated primarily from processing floral orders and charge card transactions for the Company's member florists, as well as collecting dues, fees and directory advertising from the members. Floral order processing may require settlement with the fulfilling florist before collection of funds from the sending florist. Charge card processing, however, generally allows the Company to collect funds from the charge card issuer prior to settlement with the merchant. Since in both types of transactions the Company is both collecting and settling funds, the timing of these cash flows has a significant impact on the Company's liquidity. 9 12 FLORAFAX INTERNATIONAL, INC. Management's Discussion and Analysis of Financial Condition and Results of Operation As discussed in Note 1 to the consolidated financial statements the Company continues to engage in non traditional campaigns through it's wholly owned subsidiary, The Flower Club (800 800 SEND). This has helped to improve the Company's cash flow as the majority of orders generated through The Flower Club are paid for by credit cards. This allows the Company to receive its funds within days after processing the transaction. For the quarter ended February 29, 1996 floral orders and handling fees generated through The Flower Club amounted to approximately $5,024,000 compared to $3,007,000 for the quarter ended February 28, 1995, an increase of 67%. For the six months ended February 29, 1996 floral orders and handling fees generated through The Flower Club amounted to approximately $7,691,000 compared to $4,399,000 for the six months ended February 28, 1995, an increase of 75%. RESULTS OF OPERATIONS General Comments During fiscal 1995 the Company reported net income of $707,000, which was the Companies most profitable year since 1983. During the first six months of fiscal 1996 the Company is reporting net income of $743,000, which surpasses net income for the entire previous year. In addition, net income for the quarter ended February 29, 1996 was $585,000, which is the Companies most profitable second quarter in over ten years. Total revenues increased by 19% during the quarter ended February 29, 1996 when compared to the same period in the prior year while operating expenses increased by only 11%. For the six months ended February 29, 1996 total revenues increased by 15% when compared to the same period in the prior year while operating expenses increased by only 6%. Net Revenues Revenues from member dues and fees remained relatively constant during the quarter and six months ended February 29, 1996 when compared to the same period in the prior year. Management believes that the number of orders that the Company is now providing to it's members has allowed the Company to maintain it's membership base. Floral order revenue increased by 45% and 49% for the quarter and six months ended February 29, 1996, respectively, when compared to the same periods in the previous year. This increase is primarily a result of orders generated by The Flower Club. Orders and handling fees generated by The Flower Club increased by 67% and 75% for the quarter and six months ended February 29, 1996, respectively, when compared to the same period in the previous year. In addition, traditional orders were slightly greater (approximately 3%) for the quarter ended February 29, 1996 when compared to the same quarter in the prior year. 10 13 FLORAFAX INTERNATIONAL, INC. Management's Discussion and Analysis of Financial Condition and Results of Operation Net revenues from credit card operations remained relatively constant for the quarter ended February 29, 1996 when compared to the same quarter in the previous year. The gross dollar amount of credit cards processed actually increased by 26%, however there were four primary factors that offset the increase in volume, as follows. First, the Company lowered it's discount rate to be more competitive in certain markets. Second, the Company experienced an increase in the cost to clear credit card transactions as well as an increase in data capture and authorization fees. Third, certain credit card companies began settling credit card transactions directly with a segment of the Company's merchants, which eliminated the Companies ability to charge a discount rate on these transactions. Fourth, the Company no longer processes the credit card transactions for the Oklahoma State Treasurers office. For the six months ended February 29, 1996 the Company experienced an 11% decrease in net charge card processing revenue when compared to the same period in the previous year. The gross dollar amount of credit cards processed actually increased by 27%, however the aforementioned four factors caused net revenues to decline. The reason that income for the two quarters was fairly constant and income for the six months shows a decline is as follows. The time at which certain credit card companies began settling transactions directly with Florafax merchants occurred early in the second quarter of fiscal 1995. Accordingly, during the first quarter of fiscal 1995 the Company continued to charge a processing fee for these transaction whereas during the second quarter the Company was unable to charge these fees. Consequently, year to date charge card revenue for 1995 exceed year to date charge card revenue for 1996. Expenses Member support, general and administrative expenses increased by 6% and 4% for the quarter and six months ended February 29, 1996, respectively, when compared to the same periods in the previous year. The main component of the increase was payroll and related benefits. The increase in payroll was due two factors. First, there was an increase in labor necessary to handle to increased volume of orders generated by The Flower Club. Second, there were normal pay increases given to employees throughout the Company. Selling and advertising expenses increased significantly for both the quarter and six months ended February 29, 1996 when compared to the same period in the prior year. The main component of this increase was an increase in advertising costs. Now that the Company is operating at a profit management has begun to focus on increasing membership which required expenditures for advertising. It is anticipated that the Company will continue to incur advertising costs in an effort to increase membership. 11 14 FLORAFAX INTERNATIONAL, INC. Management's Discussion and Analysis of Financial Condition and Results of Operation Other income (expense) The Company is reporting interest income of $26,000 and $46,000 for the quarter and six months ended February 29, 1996 compared to no interest income for the same periods in the prior year. The current year interest income is a result of the Companies improved cash position when compared to the same period last year. 12 15 PART II OTHER INFORMATION Item 1. Legal Proceedings For a summary of legal proceedings, reference is made to Item 3, Legal Proceedings, included in the Company's annual report on Form 10-KSB for the year ended August 31, 1995 and to Note 2 of the Notes to Consolidated Financial Statements included in this filing. Item 2. Changes in Securities As more fully discussed in note 3 to the financial statements the Company issued a $2,500,000 convertible promissory note with a maturity date of February 28, 1997, along with a related security agreement. Under the terms of the security agreement, without written consent of the note holders the Company may not declare, make or pay any dividends, other than dividends between the Company and its subsidiaries. Item 3. Defaults Upon Senior Securities None Item 4. The Submission of Matters to a Vote of Security Holders An annual meeting of the shareholders of the Company was held on January 30, 1996 pursuant to notice of the meeting and the proxy statement for the annual meeting first mailed on or about December 22, 1995 to all shareholders of record as of December 4, 1995. The meeting was held: 1) To elect seven directors; 2) To approve the appointment of auditors for the 1996 fiscal year; 3) To approve the adoption of the Nonemployee Directors' Stock Option Plan; 4) To approve the Management Incentive Stock Option Plan; and 5) To transact such other business as may properly come before the meeting or any adjournment or postponement thereof. 13 16 The following individuals were nominated as directors and were the only nominees submitted to the shareholders. The number of shares voted and those withheld from each such nominee are listed below:
FOR WITHHELD --- -------- T. Craig Benson 5,166,409 29,387 Solomon O. Howell, Jr. 5,161,409 34,387 Glenn R. Massey 5,158,409 37,387 William E. Mercer 5,166,409 29,387 James H. West 5,166,409 29,387 Andrew W. Williams 5,163,609 32,187 Kenneth G. Puttick 5,158,409 37,387
There were no abstentions or broker non votes. Other matters submitted to a vote by the shareholders are shown below, along with the votes for and against each matter.
BROKER ------ FOR AGAINST ABSTAIN NON VOTES --- ------- ------- --------- Appointment of the auditors for for the 1996 fiscal year 5,188,960 6,035 801 0 Adoption of the Nonemployee Director Stock Option Plan 2,235,140 634,465 110,138 2,216,053 Adoption of the Management Incentive Stock Plan 2,928,402 101,951 4,333 2,161,110
There was no other business to come before the meeting. The total number of shares present at the meeting in person or by proxy was 5,195,796 representing 88% of the shares outstanding, 5,922,973. Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K 14 17 Exhibits The following documents were filed as exhibits with the form 8-K filed on February 8, 1996 and, accordingly, are incorporated here by reference. Exhibit Reference (10) Material Contracts Agreement of Purchase and Sale made and entered into to be effective December 29, 1995 by and between Registrant and St. James Partners, LTD. 7% Convertible Promissory Note in the amount of $2,500,000 dated Dated February 28, 1996 due February 28, 1997. Security agreement dated February 28, 1996 executed in connection with the $2,500,000 Convertible Promissory Note. Common Stock Purchase Warrant for 250,000 shares of the registrants common stock expiring January 1, 2001. Common Stock Purchase Warrant for 400,000 shares of the registrants common stock expiring January 1, 2001. The following items have been included as exhibits in filings by the Company in a previous year and, accordingly, are incorporated here by reference. Exhibit Reference (3) Articles of incorporation and Bylaws of the Registrant, as amended. (10) Material Contracts (a) Convertible subordinated notes due to Clark Estates, now paid in full. (b) Subordinated debentures maturing in 1998. 15 18 (c) Agreement dated December 3 1993, Addendum, Second Addendum, Third Addendum, Fourth Addendum and Fifth Addendum thereto by and between the Registrant and Citizens Fidelity Bank and Trust Company (now PNC Bank, Kentucky, Inc.), now expired. Exhibit Reference (d) Purchase Agreement for certain assets formerly owned by Savannah Floral Services, Inc. dated March 10, 1994. (e) Note Payable to Andrew Williams dated March 10, 1994, now paid n full. (f) Promissory Note to Citrus Bank dated November 9, 1993. (g) Promissory Note to Citrus Bank dated November 17, 1993. (h) Promissory Note to Citrus Bank dated January 25, 1994. (i) Loan to James H. West, Director, President and Chief Financial Officer, dated August 28, 1994. (j) Consulting agreement with David Harper of Ventura County California dated December 10, 1993. (k) Promissory Note to Citrus Bank dated August 31, 1995. (l) Operating lease agreement between Registrant and Alvin Wunderlich dated April 1995. (22) Subsidiaries of the Registrant Filed herewith (27) Financial Data Schedule (For SEC use only). Reports on Form 8-K On February 8, 1996 the Company filed form 8-K with the Securities and Exchange Commission, announcing the issuance of a $2,500,000 Convertible Promissory Note bearing interest at seven percent per annum with a maturity date of February 28, 1997. 16 19 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 thereunto duly authorized. Florafax International, Inc. Date: April 3, 1996 James H. West ------------- ------------- James H. West President and Chief Financial Officer 17 EX-27 2 FINANCIAL DATA SCHEDULE
5 1 U.S. DOLLARS 3-MOS AUG-31-1996 DEC-01-1995 FEB-29-1996 1 3,456,000 0 3,057,000 465,000 0 6,157,000 2,435,000 2,163,000 8,745,000 9,278,000 2,865,000 0 0 61,000 (1,043,000) 8,745,000 0 2,350,000 0 0 1,815,000 63,000 80,000 481,000 20,000 461,000 0 125,000 0 586,000 0.08 0.08
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