<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                   FORM 10-K/A

                                Amendment No. 2

                 ANNUAL REPORT PURSUANT to SECTION 13 or 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                                  (as amended)

      For the period ended January 27, 1996. Commission File Number 0-21910

                                 KIDS MART, INC.
                   (F/K/A FROST HANNA ACQUISITION GROUP, INC.)

             (Exact name of registrant as specified in its charter)

     Florida                                                     65-0406710

     (State or other jurisdiction of                            (IRS Employer
     incorporation or organization)                          Identification No.)

     801 Sentous Avenue, City of Industry, California                 91748

     (Address of principal executive offices)                       (Zip Code)

     Registrant's telephone number, including area code          (818) 854-3166

           Securities registered pursuant to Section 12(b) of the Act:
                                      None

           Securities registered pursuant to Section 12(g) of the Act:

                               Title of each class
                               -------------------
                    Common Stock, par value $0.0001 per share

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. [    ]

         Check if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]

AS OF SEPTEMBER 4, 1996, THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY
NON-AFFILIATES OF THE ISSUER BASED ON THE AVERAGE BID AND ASK PRICES OF $1.50
AND $2.75, RESPECTIVELY, OF SUCH COMMON STOCK IS $6,916,161 BASED UPON AN
AVERAGE PRICE OF $2.125 MULTIPLIED BY 3,254,664 SHARES OF COMMON STOCK
OUTSTANDING ON SUCH DATE HELD BY NON-AFFILIATES.

AS OF SEPTEMBER 4, 1996, THE ISSUER HAD A TOTAL OF 4,943,000 SHARES OF COMMON
STOCK, PAR VALUE $0.0001 PER SHARE, OUTSTANDING.

                      DOCUMENTS INCORPORATED BY REFERENCE:
                                      None.
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                                   SIGNATURES

         In accordance with Section 13 or 15(d) 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.

                                                       KIDS MART, INC.



                                                    By /s/ BERNARD TESSLER
                                                       -----------------------
                                                       Bernard Tessler,
                                                       Chief Executive Officer

                                                       Date:  December 4, 1996

         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the Registrant and in the capacities and
on the dates indicated:

<TABLE>
<CAPTION>
              Signature                                    Title                            Date       
---------------------------------------   ----------------------------------------   ------------------
<S>                                       <C>                                        <C>    


       /s/ BERNARD TESSLER                Chairman, Chief Executive Officer,         December 4, 1996
---------------------------------------   and Director
           Bernard Tessler             



      /s/ ROBERT S. KELLEHER              Vice President, Chief Operating Officer,   December 4, 1996
---------------------------------------   and Chief Financial Officer
          Robert S. Kelleher           



       /s/ JEFFREY KOFFMAN                Director                                   December 4, 1996
---------------------------------------
           Jeffrey Koffman



      /s/ STEPHEN L. PISTNER              Director                                   December 4, 1996
---------------------------------------
          Stephen L. Pistner



       /s/ ERIC M. SPECTER                Director                                   December 4, 1996
---------------------------------------
           Eric M. Specter



     /s/ DONALD S. ROSENBERG               Director                                   December 4, 1996
---------------------------------------
         Donald S. Rosenberg
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                                       21
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                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
                                                                    Sequentially
Exhibit                                                                 Numbered
Number            Description of Exhibit                                    Page
------            ----------------------                                    ----
<S>       <C>                                                       <C>    
2.1       Agreement and Plan of Merger and Reorganization dated
          May 31 1995, by and between the Company and LFS
          Acquisition Corp. (incorporated by reference to Exhibit
          A-1 to the Company's Proxy Statement dated December 14,
          1995).

3.1       Articles of Incorporation of the Company (incorporated
          by reference to Exhibit 3.1 to the Company's
          Registration Statement on Form SB-2, File No.
          33-63736-A, filed with the Securities and Exchange
          Commission on July 2, 1993).

3.2       Amended and Restated Articles of Incorporation of the
          Company (incorporated by reference to Exhibit C-1 to
          the Company's Proxy Statement dated December 14, 1995).

3.3       Bylaws of the Company (incorporated by reference to
          Exhibit 3.2 to the Company's Registration Statement on
          Form SB-2, File No. 33-63736-A, filed with the
          Securities and Exchange Commission on July 2, 1993).

9         Stockholders' Agreement, dated May 30, 1995, among LFS
          Acquisition Corp., Bernard Tessler, Sentani Trading
          Ltd., Jeffrey Koffman, Allison Koffman, Jack Koffman,
          Janice Payson, Barbara Koffman, Tech Aerofoam, Inc.,
          David Koffman, Ruthanne Koffman, Whitehorn, Inc.,
          Financo, Inc. and Marvin Traub (incorporated by
          reference to Exhibit 9 to the Company's Annual Report
          on Form 10-KSB for the fiscal year ended December 31,
          1995).

10.1      1995 Stock Option Plan of the Company (incorporated by
          reference to Exhibit B-1 to the Company's Proxy
          Statement dated December 14, 1995).

10.2      Employment Agreement between LFS Acquisition Corp. and
          Bernard Tessler dated May 31, 1995, (incorporated by
          reference to Exhibit 10.2 to the Company's Annual
          Report on Form 10-KSB for the fiscal year ended
          December 31, 1995).

10.3      Transitional Services Agreement between LFS Acquisition
          Corp. and Woolworth Corporation dated as of May 31,
          1995 (incorporated by reference to Exhibit 10.3 to the
          Company's Annual Report on Form 10-KSB for the fiscal
          year ended December 31, 1995).

10.4      Settlement Agreement between LFS Acquisition Corp. and
          Woolworth Corporation and Kinney Shoe Corporation dated
          as of May 30, 1996.

10.5      Loan and Security Agreement by and between LFS
          Acquisition Corp. and Foothill Capital Corporation
          dated as of May 31, 1995, and amendments thereto.

10.6      Sale/leaseback agreement between Kids Mart, Inc. and
          Computer Sales International, Inc. dated as of July 24,
          1996.

10.7      Agreement between Kids Mart, Inc. and Be Bop Clothing, Inc.
          dated September 11, 1996.(1)

10.8      Exchange Agreement and Investment representation Agreement
          between Kids Mart, Inc. and Be Bop Clothing, Inc. dated 
          September 11, 1996.   

27        Financial Data Schedule

-------------
(1)  Filed pursuant to a request for confidential treatment.
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