##### 



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-KSB

x   Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the year ended December 31, 2001.

Commission file number 0-27805.

KNOX NURSERY, INC.

(Exact name of registrant as specified in its charter.)

|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Florida                                                        |  | 59-1787808                          
|                                                               |  |                                     
|                                                               |  |                                     
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)
|                                                               |  |                                     
|4349 N. Hiawassee Road, Orlando, FL                            |  | 32818                               
|                                                               |  |                                     
|(Address of principle executive offices)                       |  | (Zip Code)                          

(407) 293-3721
(Registrants telephone number, including area code)

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

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

Common stock, par value $.001 per share, traded on the NASD OTC Bulletin Board

Preferred stock, par value $.001 per share, non issued and outstanding


Based upon the $0.11 per share closing price of the registrants Common
Stock as of March 15, 2002, the aggregate value of the shares of Common
Stock held by nonaffiliates as of such date was $ 493,862.

Number of shares of common stock outstanding as of March 15, 2002 is
12,025,454.

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  o

Indicate by check mark 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 the registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB.   x

State issuers revenues for its most recent year  $6,379,143

DOCUMENTS INCORPORATED BY REFERENCE

None





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TABLE OF CONTENTS



|                                   |  |  |  |  |  |  |  | 
|---------------------------------- |  |  |  |  |  |  |  | 
|PART I                            
|PART II                           
|Independent Auditors Report      
|Balance Sheet                     
|Statements of Operations          
|Statements of Stockholders Equity
|Statements of Cash Flows          
|Notes to Financial Statements     
|PART III                          
|SIGNATURES                        




PART I

This Annual Report on Form 10-KSB contains forward-looking statements that are
not statements of historical fact. Forward-looking statements by their nature
involve substantial risks and uncertainties, and actual results may differ
materially from such statements. These forward-looking statements are based on
the Companys expectations and are subject to a number of risks and
uncertainties, including but not limited to, those risks associated with
economic conditions generally and the economy in those areas where the Company
has or expects to have assets and operations; risks relating to changes in
interest rates and in the availability, cost and terms of financing; risks
related to the performance of financial markets; risks related to changes in
domestic and foreign laws, regulations and taxes; risks associated with future
profitability; and other factors discussed elsewhere in this report.

ITEM I. DESCRIPTION OF BUSINESS

THE COMPANY

Knox Nursery, Inc. (the Company) is a Florida corporation since 1962, having
its offices in Orlando, Florida. The Company is a wholesale plant nursery
specializing in sales of seedling annuals (plugs) to brokers and other
nurseries located throughout the United States and Canada; and sales of potted
annuals to wholesalers, landscapers and large final-use customers located
primarily in Central Florida.

Plug sales, which accounts for 74% of the Companys sales, involves sowing
millions of seeds annually, then precisely growing the seedlings for 4 to 10
weeks until the pre-finished plants are shipped to commercial growers
throughout the country. These growers will transplant the plugs into larger
pots and containers for resale to their customers.

Potted annuals are transplanted from pre-finished plugs into the appropriate
containers, then carefully grown to a mature ready-to-sell condition. The
target market for the finished plants includes mass merchandisers such as
Lowes, Home Depot, and Walmart, landscapers, and local final-use customers
such as Walt Disney World and Universal Studios.

Knox Nurserys plug facility (aka Avalon) is technologically advanced, costing
the Company approximately $6,000,000 to construct. This gives Knox Nursery a
competitive advantage in the marketplace. Now, the total growing environment
can be micro-managed. The temperature, moisture, humidity and light within the
growing facility can be accurately controlled to provide optimum growing
environments for maximum growth in the shortest periods. Additionally, this new
facility lowers labor costs by approximately 40%, which constitutes the largest
single cost to the Company. Therefore, even though the cost for the new
facility was considerable, the advantages for the Company may provide greater
future profits.

Principle raw materials used in the production of plug and finished products
include plastic trays and pots supplied by Blackmore Company and Florikan, a
soil-less growing media supplied by Prosource One, seed supplied by the Ball
Seed Company, Syngenta, and Express Seed
Company, and chemicals supplied by BWI. The Company believes should it be
necessary, raw materials could be procured on competitive terms with
alternative suppliers.

Knox Nursery Inc. employs an average of 95 people, 93 full-time and 2
part-time.

63% of plug tray sales in 2001 came from three customers  Express Seed Company
31%; Ball Seed Company 20%; and DPT Brokerage 12%. 24% of finished plants
sales were made to these customers  Colorburst 9.5%; Walt Disney World 9%; and
Dixie Green 5.5%.

2



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MARKET ENVIRONMENT

The Company targets medium to large wholesale growers for its pre-finished
lines of plants, however, smaller growers are not ignored. The overall
floriculture industry in the United States is a $3.7 billion industry. In
Florida alone, the industry generates over $700 million in sales.

INDUSTRY ANALYSIS

The bedding plant industry consists of a small group of independent producers,
many of whom are customers of Knox Nursery. The industry is currently being
consolidated by large growers who are expanding and beginning to direct their
sales effort to large, mass marketers. These large marketers are important to
the Company, and it is the plan of Knox Nursery to take advantage of its Avalon
facility, to further its share of the larger, mass marketer business.

MARKET SEGMENT

Knox Nursery does business with over 200 independent brokers selling its
pre-finished products around the United States. The Company has certain
advantages in the Southeastern United States because of its location, and the
Company run distribution system of delivery trucks. Also, with its Florida
location and its warm climate, the Company escapes the high energy costs of
northern areas. This competitive advantage allows the Company to offer better
prices than many of its competitors. In one popular area, the supplying of
Gerbera Daisies, Knox Nursery is the largest grower and supplier of this
species in the United States.

ITEM 2. DESCRIPTION OF PROPERTY

The Company maintains the following facilities:

|                            |  |                                        |  |              
|--------------------------- |  | -------------------------------------- |  | -------------
|Principle corporate offices |  | 4349 N. Hiawassee Rd.
Orlando, Florida |  | 2,500 sq. ft.

The Company does not anticipate that it will require any additional office
facilities. However, if additional office space is required in the future, the
available property will allow for expansion.

|                  |  |                                        |  |                               
|----------------- |  | -------------------------------------- |  | ------------------------------
|Hiawassee Nursery |  | 4359 N. Hiawassee Rd.
Orlando, Florida |  | 240,000 sq.
ft.
(9 structures)

The 12 1/2 acres at this location have been fully developed.

|               |  |                                        |  |                
|-------------- |  | -------------------------------------- |  | ---------------
|Avalon Nursery |  | 940 Avalon Road
Winter Garden, Florida |  | 280,000 sq. ft.

The entire Avalon Road property is a Master Planned Project, which will
consist
of four phases when fully developed.

ITEM 3. LEGAL PROCEEDINGS

The Company was not involved in any litigation at December 31, 2001 or on the
date of this report.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to security holders during the fourth quarter of
2001.

3



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PART II

ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Companys Common Stock is traded on The NASD OTC Bulletin Board, under the
symbol KNUR. The first active trading in the shares of the Company began in
the fourth quarter of 1998. The high and low closing inter-dealer sales prices
for each quarter of the last two fiscal years are as follows:

|        |  |      |      |      |  |      |     |     |  |  |     |  |  |  |     | 
|------- |  | ---- | ---- | ---- |  | ---- | --- | --- |  |  | --- |  |  |  | --- | 
|        |  | 2000 |      | 2001
|        |  |      |      |     
|        |  | high |      | low  |  | high |     | low
|        |  |      |      |      |  |      |     |    
|1st qtr |  |      | 2.71 |      |  |      | .56 |     |  |  | .31 |  |  |  | .19 | 
|2nd qtr |  |      | 1.63 |      |  |      | .53 |     |  |  | .21 |  |  |  | .13 | 
|3rd qtr |  |      | .50  |      |  |      | .25 |     |  |  | .22 |  |  |  | .14 | 
|4th qtr |  |      | .31  |      |  |      | .18 |     |  |  | .20 |  |  |  | .09 | 

As of March 27th the number of shareholders of record was 80.

The Company has not paid any cash dividends on its Common Stock since inception
and does not anticipate paying cash dividends in the foreseeable future. The
future payment of dividends is directly dependent upon future earnings of the
Company, its financial requirements and other factors to be determined by the
Companys Board of Directors, in its sole discretion. For the foreseeable
future, it is anticipated that any earnings which may be generated from the
Companys operations will be used to finance the growth of the Company, and
that cash dividends will not be paid to Common stockholders.

ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS

The following is a discussion of the financial condition and results of
operation of the Company as of December 31, 2001. This discussion and analysis
should be read in conjunction with the Companys audited Financial Statements
with accompanying Notes, which are included elsewhere in this Form 10-KSB.

GENERAL

Knox Nursery, Inc. founded in 1962, is located in Central Florida and has two
product lines: 1) Plug trays, with sales of seedling annuals (plugs) to brokers
and other nurseries throughout the United States; and 2) Finished Product, with
sales of four inch annuals to wholesalers, landscapers and large final-use
customers located primarily in Central Florida.

4



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REVENUE

For the year ended December 31, 2001, revenue was $6,379,143, a decrease of
$417,959, or 6.2% from the $6,797,102 posted for the year ended December 31,
2000. The overall decrease in 2001 sales is composed of a Plug tray revenue
increase of 2% or $90,581, and a Finished Product revenue decrease of 23.3% or
$508,570 from 2000, respectively. Plug trays experienced growth in customer
base and the addition of revenues from increased activity in the late summer as
a rooting station for Paul Ecke Farms. Finished Product sales plummeted due to
the loss of big box business from Home Depot and Lowes going to competitors.
The cooling effect of the 9/11/01 terrorist attacks on travel and the tourist
economy of Central Florida also indirectly reduced business coming from local
resorts and theme parks.

COSTS AND EXPENSES

For the year ended December 31, 2001, cost of sales was $4,471,608 , a decrease
of $223,032, or 4.8% from the $4,694,639 posted for the year ended December
31, 2000.

By product line, cost of sales  Plug trays increased $145,565 (4.7%), with the
volume of seed entering the production process at higher prices over year 2000
accounting for the majority of the increasing cost factors. Plastic tray costs
were 6% higher and shipping charges were up 18.7%, following the general
increase in petroleum and petroleum based products and services, while
production costs for soil, chemical, purchased plants, temporary labor, and
general supplies decreased from the prior year. Labor costs for Plugs were up
$22,000 (2.7%) in general due to pay increases.

Cost of sales  Finished Products decreased $303,197 (22.7%). In conjunction
with declining revenue production, the largest decreasing cost factor was
Labor, falling $196,000 (25%). Raw materials costs and general supplies were
down 26% over the year 2000, again due to falling productivity. These
decreases were offset by increases in Unrooted cuttings purchased, increasing
$60,000 over the previous year in relation to the new business with Paul Ecke
Ranch during the poinsettia season.

Repairs and maintenance as a cost of sales factor decreased $65,400 (28%) from
the prior year. Vehicle and equipment repairs related to Finished Product
production were down $32,000 (37%), and down $13,000 (13%) for repairs and
maintenance related to the Plug production process. In house maintenance labor
expenses were down $15,000 (15%) over the year 2000.

Operating expenses for 2001 amounted to $2,000,736, a decrease of $670,771 or
25.1% from the $2,674,507 recorded in 2000. Within operating expenses, computer
support experienced a significant change, $1,792 in 2001 from $126,073 in 2000,
a $124,281 decrease. Year 2000 costs were higher from the installation of
computer software and hardware systems at Avalon and Hiawassee locations.
Interest expense fell to $ 395,020 in 2001 from $415,496 in 2000, a 4.9%
decrease of $20,476. Office salaries increased 23.6% or $66,822 to $349,807 in
2001 from $282,985 in 2000. This increase is from the addition of full-time
computer department staff. Advertising expenses decreased $538,964 to $14,396
in 2001 from $553,360 in 2000. Year 2000 expenditures included a one-time
non-cash charge for stock promotions paid with treasury stock valued at
$530,636. Electrical and gas utility expenses rose 32% or $32,621 from
$100,622 in 2000 to $133,243 in 2001, due to increasing energy prices.
Insurance expenses rose 23.3% or $41,384 from $177,828 in 2000 to $219,212 in
2001, due to higher workers compensation and business liability coverage
costs. Accounting & Legal costs fell 36.2% or $22,992 from $63,474 in 2000 to
$40,482 in 2001. Equipment rentals fell 32.5% or $44,973 from $138,448 in 2000
to $93,475 in 2001.

5



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Other, net (net expense) on the Statement of Operations increased $1,943 for
the year ending 2001, and includes the following items:

|                                    |                                    |   |         |         |      |   |         |         |   |   |         |        |  
|----------------------------------- | ---------------------------------- | - | ------- | ------- | ---- | - | ------- | ------- | - | - | ------- | ------ | -
|                                    |                                    |   | 2001    |         | 2000 |   | change 
|                                    |                                    |   |         |         |      |   |        
|loss on fixed assets                |                                    | $ | (15,066 | )       |      | $ | 0       |         |   | $ | (15,066 | )     
|miscellaneous income(expense)       |                                    |   | 11,517  |         |      |   | (20,940 | )       |   |   | 32,457  |       
|net vending income(expense)         |                                    |   | (1,654  | )       |      |   | 6,449   |         |   |   | (8,103  | )     
|net finance charges income(expense) |                                    |   | (6,853  | )       |      |   | 4,378   |         |   |   | (11,231 | )     
|                                    |                                    |   |         |         |      |   |         |         |   |   |         |       
|                                    | total Other, net income(expense) |   | $       | (12,056 | )    |   | $       | (10,113 | ) |   | $       | (1,943 | )
|                                    |                                    |   |         |         |      |   |         |         |   |   |         |       

The Company recorded a net loss from operations in 2001 of $496,398 compared to
$995,948 in 2000, a 50.1% improvement of $499,550. Non-cash charges for
depreciation and amortization were $706,194 in 2001 and $725,510 in 2000.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2001, the Company had a
working capital deficit of $416,002, compared to a deficit of $109,773 at December 31, 2000. On March 8,
2002, the Company refinanced its term debt of $4.33 million and acquired a new
credit line of $600,000, and had an approximate working capital of $800,000
subsequent to the refinancing transaction. During 2001, the Company increased
net loans from officers $85,000 for a total of $422,000.

Consistent with normal practice, management believes that the Companys
operations are not expected to require significant capital expenditures during
fiscal year 2002. Management believes that existing cash balances, cash flow
to be generated from operating activities and available borrowing capacity
under its line of credit agreement will be sufficient to fund operations, and
capital expenditure requirements for at least the next twelve months. At this
time management is not aware of any factors that
would have a materially adverse impact on cash flow during this period.

Recent Accounting Pronouncements

SFAS No. 141, Business Combinations, establishes financial accounting and
reporting standards for business combinations and supercedes APB Opinion No.
16, Business Combinations and SFAS No. 38, Accounting for Pre-acquisition
Contingencies of Purchased Enterprises. All business combinations in the
scope of SFAS No. 141 are to be accounted for using the purchase method of
accounting. Adoption of SFAS No. 141 is not expected to have a material effect
on the Company, inasmuch as the Company has historically not participated in
any business combinations.

SFAS No. 142, Goodwill and Other Intangible Assets, establishes financial
accounting and reporting standards for acquired goodwill and other intangible
assets and supercedes APB
Opinion No. 17, Intangible Assets. SFAS No. 142 establishes standards as to
how intangible assets that are acquired (but not acquired in a business
combination) should be accounted for in financial statements upon their
acquisition. In addition, SFAS No. 142 establishes standards how goodwill and
other intangible assets should be accounted for after they have been initially
recognized in the financial
statements. Adoption of SFAS No. 142 is not expected to have a material effect
on the Company, inasmuch as the Company has historically not had a material
amount of intangible assets and no goodwill recorded in the financial
statements.

6



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ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

KNOX NURSERY, INC.

Table of Contents

|                              |                                    |  |   |   | 
|----------------------------- | ---------------------------------- |  | - | - | 
|Independent Auditors Report  |                                    |  | 1 |  
|                              |                                    |  |   |  
|                              |                                    |  |   |  
|Financial Statements:         |                                    |  |   |  
|                              |                                    |  |   |  
|                              | Balance Sheets                     |  |   | 2 | 
|                              |                                    |  |   |  
|                              | Statements of Operations           |  |   | 3 | 
|                              |                                    |  |   |  
|                              | Statements of Stockholders Equity |  |   | 4 | 
|                              |                                    |  |   |  
|                              | Statements of Cash Flows           |  |   | 5 | 
|                              |                                    |  |   |  
|                              |                                    |  |   |  
|Notes to Financial Statements |                                    |  | 6 |  

7



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Independent Auditors Report

To the Board of Directors of
   Knox Nursery, Inc.:

We have audited the accompanying balance sheets of Knox Nursery, Inc. (the
Company) as of December 31, 2001 and 2000, and the related statements of
operations, stockholders equity, and cash flows for the years then ended.
These financial statements are the responsibility of the Companys management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Knox Nursery, Inc. as of
December 31, 2001 and 2000, and the results of its operations and its cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.

March 21, 2002
Orlando, Florida

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KNOX NURSERY, INC.




Balance Sheet

December 31, 2001 and 2000

|                                                                                                           |                                                                                                                   |                                            |                                      |           |           |      |           |           |           |  |  | 
|---------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------------------------------------ | --------- | --------- | ---- | --------- | --------- | --------- |  |  | 
|                                                                                                           |                                                                                                                   |                                            |                                      |           |           | 2001 |           | 2000     
|                                                                                                           |                                                                                                                   |                                            |                                      |           |           |      |           |          
|                                                                                                           |                                                                                                                   |                                            |                                      | Assets    |           |      |           |           |           |  |  | 
|                                                                                                           |                                                                                                                   |                                            |                                      |           |           |      |           |          
|Current assets:                                                                                            |                                                                                                                   |                                            |                                      |           |           |      |           |          
|                                                                                                           | Cash and cash equivalents                                                                                         |                                            | $                                    | 184,427   |           |      |           | 72,390    |          
|                                                                                                           | Accounts receivable, net of allowance for doubtful
accounts of $32,500 and $30,867 in 2001
and 2000, respectively |                                            |                                      | 679,533   |           |      |           | 658,674   |          
|                                                                                                           | Inventories                                                                                                       |                                            |                                      | 1,175,787 |           |      |           | 1,255,755 |          
|                                                                                                           | Prepaid expenses                                                                                                  |                                            |                                      | 14,413    |           |      |           | 20,969    |          
|                                                                                                           |                                                                                                                   |                                            |                                      |           |           |      |           |          
|                                                                                                           |                                                                                                                   | Total current assets                       |                                      |           | 2,054,160 |      |           |           | 2,007,788 | 
|                                                                                                           |                                                                                                                   |                                            |                                      |           |           |      |           |          
|Investment in cooperative bank                                                                             |                                                                                                                   |                                            | 1,281                                |           |           |      | 7,645     |          
|Property, plant, and equipment, net                                                                        |                                                                                                                   |                                            | 5,165,845                            |           |           |      | 5,863,776 |          
|Note receivable from officer                                                                               |                                                                                                                   |                                            | 35,854                               |           |           |      | 33,943    |          
|Deferred loan cost, net of accumulated amortization of
$110,163 and $87,027 in 2001 and 2000, respectively |                                                                                                                   |                                            | 10,166                               |           |           |      | 33,302    |          
|Deposits                                                                                                   |                                                                                                                   |                                            | 2,920                                |           |           |      | 1,320     |          
|                                                                                                           |                                                                                                                   |                                            |                                      |           |           |      |           |          
|                                                                                                           |                                                                                                                   | Total assets                               |                                      | $         | 7,270,226 |      |           |           | 7,947,774 | 
|                                                                                                           |                                                                                                                   |                                            |                                      |           |           |      |           |          
|                                                                                                           |                                                                                                                   |                                            | Liabilities and Stockholders Equity |           |           |      |           |           |           |  | 
|Current liabilities:                                                                                       |                                                                                                                   |                                            |                                      |           |           |      |           |          
|                                                                                                           | Accounts payable                                                                                                  |                                            | $                                    | 1,204,823 |           |      |           | 1,123,397 |          
|                                                                                                           | Accrued expenses                                                                                                  |                                            |                                      | 101,490   |           |      |           | 80,395    |          
|                                                                                                           | Line of credit                                                                                                    |                                            |                                      | 550,000   |           |      |           | 600,000   |          
|                                                                                                           | Note payable to stockholder                                                                                       |                                            |                                      | 422,000   |           |      |           | 337,000   |          
|                                                                                                           | Current installments of long-term debt                                                                            |                                            |                                      | 191,849   |           |      |           | 347,712   |          
|                                                                                                           |                                                                                                                   |                                            |                                      |           |           |      |           |          
|                                                                                                           |                                                                                                                   | Total current liabilities                  |                                      |           | 2,470,162 |      |           |           | 2,488,504 | 
|                                                                                                           |                                                                                                                   |                                            |                                      |           |           |      |           |          
|Long-term debt, excluding current installments                                                             |                                                                                                                   |                                            | 3,475,458                            |           |           |      | 3,638,266 |          
|                                                                                                           |                                                                                                                   |                                            |                                      |           |           |      |           |          
|                                                                                                           |                                                                                                                   | Total liabilities                          |                                      |           | 5,945,620 |      |           |           | 6,126,770 | 
|                                                                                                           |                                                                                                                   |                                            |                                      |           |           |      |           |          
|Stockholders equity:                                                                                      |                                                                                                                   |                                            |                                      |           |           |      |           |          
|                                                                                                           | Preferred stock, $.001 par value, 10,000,000 shares
authorized, none issued and outstanding                       |                                            |                                      |          |           |      |           |          |          
|                                                                                                           | Common stock, $.001 par value, 40,000,000 shares
authorized, 12,025,454 shares issued and
outstanding             |                                            |                                      | 12,025    |           |      |           | 12,025    |          
|                                                                                                           | Additional paid-in capital                                                                                        |                                            |                                      | 1,807,678 |           |      |           | 1,807,678 |          
|                                                                                                           | Retained earnings                                                                                                 |                                            |                                      | (495,097  | )         |      |           | 1,301     |          
|                                                                                                           |                                                                                                                   |                                            |                                      |           |           |      |           |          
|                                                                                                           |                                                                                                                   | Total stockholders equity                 |                                      |           | 1,324,606 |      |           |           | 1,821,004 | 
|                                                                                                           |                                                                                                                   |                                            |                                      |           |           |      |           |          
|                                                                                                           |                                                                                                                   | Total liabilities and stockholders equity |                                      | $         | 7,270,226 |      |           | $         | 7,947,774 | 
|                                                                                                           |                                                                                                                   |                                            |                                      |           |           |      |           |          

See accompanying notes to the financial statements.

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KNOX NURSERY, INC.




Statements of Operations

For the years ended December 31, 2001 and 2000

|                        |                              |                                            |           |          |            |      |           |          |            |  
|----------------------- | ---------------------------- | ------------------------------------------ | --------- | -------- | ---------- | ---- | --------- | -------- | ---------- | -
|                        |                              |                                            |           | 2001     |            | 2000
|                        |                              |                                            |           |          |            |     
|Sales                   |                              | $                                          | 6,379,143 |          |            |      | 6,797,102 |         
|Cost of sales           |                              |                                            | 4,471,608 |          |            |      | 4,694,639 |         
|                        |                              |                                            |           |          |            |      |           |         
|                        |                              | Gross profit                               |           |          | 1,907,535  |      |           |          | 2,102,463  |  
|                        |                              |                                            |           |          |            |      |           |         
|Operating expenses      |                              |                                            | 2,003,736 |          |            |      | 2,674,507 |         
|                        |                              |                                            |           |          |            |      |           |         
|                        |                              | Loss from operations                       |           |          | (96,201    | )    |           |          | (572,044   | )
|                        |                              |                                            |           |          |            |      |           |         
|Other income (expense): |                              |                                            |           |          |            |      |           |         
|                        | Interest expense             |                                            |           | (395,020 | )          |      |           | (415,496 | )         
|                        | Interest and dividend income |                                            |           | 6,879    |            |      |           | 1,705    |           
|                        | Other, net                   |                                            |           | (12,056  | )          |      |           | (10,113  | )         
|                        |                              |                                            |           |          |            |      |           |         
|                        |                              | Other expense, net                         |           |          | (400,197   | )    |           |          | (423,904   | )
|                        |                              |                                            |           |          |            |      |           |         
|                        |                              | Loss before income taxes                   |           |          | (496,398   | )    |           |          | (995,948   | )
|                        |                              |                                            |           |          |            |      |           |         
|Income tax benefit      |                              |                                            |          |          |            |      | 300,000   |         
|                        |                              |                                            |           |          |            |      |           |         
|                        |                              | Net loss                                   |           | $        | (496,398   | )    |           |          | (695,948   | )
|                        |                              |                                            |           |          |            |      |           |         
|                        |                              | Basic loss per common share                |           | $        | (0.04      | )    |           |          | (0.05      | )
|                        |                              |                                            |           |          |            |      |           |         
|                        |                              | Weighted average common shares outstanding |           |          | 12,025,454 |      |           |          | 11,996,820 |  
|                        |                              |                                            |           |          |            |      |           |         

See accompanying notes to the financial statements.

10



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##### 



KNOX NURSERY, INC.




Statements of Stockholders Equity

For the years ended December 31, 2001 and 2000

|                                        |  |        |        |         |  |            |           |          |  |       |          |   |  |  |         |   |  |  |           |  
|--------------------------------------- |  | ------ | ------ | ------- |  | ---------- | --------- | -------- |  | ----- | -------- | - |  |  | ------- | - |  |  | --------- | -
|                                        |  |        |        |         |  | Additional |           |          |  |       |          |   |  |  |         |   |  | 
|                                        |  | Common |        | paid-in |  | Retained   |           | Treasury |  |       |          |  
|                                        |  | stock  |        | capital |  | earnings   |           | stock    |  | Total
|                                        |  |        |        |         |  |            |           |          |  |      
|Balances, December 31, 1999             |  | $      | 12,025 |         |  |            | 1,195,188 |          |  |       | 697,249  |   |  |  | (25,403 | ) |  |  | 1,879,059 |  
|                                        |  |        |        |         |  |            |           |          |  |       |          |   |  |  |         |   |  |  |           |  
|Issuance of treasury stock              |  |        |       |         |  |            | 36,406    |          |  |       |         |   |  |  | 1,094   |   |  |  | 37,500    |  
|                                        |  |        |        |         |  |            |           |          |  |       |          |   |  |  |         |   |  |  |           |  
|Issuance of treasury stock
for services |  |        |       |         |  |            | 507,421   |          |  |       |         |   |  |  | 23,215  |   |  |  | 530,636   |  
|                                        |  |        |        |         |  |            |           |          |  |       |          |   |  |  |         |   |  |  |           |  
|Issuance of treasury stock
to employees |  |        |       |         |  |            | 68,663    |          |  |       |         |   |  |  | 1,094   |   |  |  | 69,757    |  
|                                        |  |        |        |         |  |            |           |          |  |       |          |   |  |  |         |   |  |  |           |  
|Net loss                                |  |        |       |         |  |            |          |          |  |       | (695,948 | ) |  |  |        |   |  |  | (695,948  | )
|                                        |  |        |        |         |  |            |           |          |  |       |          |   |  |  |         |   |  |  |           |  
|Balances, December 31, 2000             |  |        | 12,025 |         |  |            | 1,807,678 |          |  |       | 1,301    |   |  |  |        |   |  |  | 1,821,004 |  
|                                        |  |        |        |         |  |            |           |          |  |       |          |   |  |  |         |   |  |  |           |  
|Net loss                                |  |        |       |         |  |            |          |          |  |       | (496,398 | ) |  |  |        |   |  |  | (496,398  | )
|                                        |  |        |        |         |  |            |           |          |  |       |          |   |  |  |         |   |  |  |           |  
|Balances, December 31, 2001             |  | $      | 12,025 |         |  |            | 1,807,678 |          |  |       | (495,097 | ) |  |  |        |   |  |  | 1,324,606 |  
|                                        |  |        |        |         |  |            |           |          |  |       |          |   |  |  |         |   |  |  |           |  

See accompanying notes to the financial statements.

11



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##### 



KNOX NURSERY, INC.




Statements of Cash Flows

For the years ended December 31, 2001 and 2000

|                                                         |                                                                                                                                                                                                 |                                         |                                                      |          |         |          |         |          |          |          |  
|-------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------- | ---------------------------------------------------- | -------- | ------- | -------- | ------- | -------- | -------- | -------- | -
|                                                         |                                                                                                                                                                                                 |                                         |                                                      |          | 2001    |          | 2000   
|                                                         |                                                                                                                                                                                                 |                                         |                                                      |          |         |          |        
|Cash flows from operating activities:                    |                                                                                                                                                                                                 |                                         |                                                      |          |         |          |         |         
|                                                         | Net loss                                                                                                                                                                                        |                                         | $                                                    | (496,398 | )       |          |         | (695,948 | )       
|                                                         | Adjustments to reconcile net loss to cash
provided by operating activities:                                                                                                                     |                                         |                                                      |          |         |          |         |          |         
|                                                         |                                                                                                                                                                                                 | Depreciation and amortization           |                                                      |          | 706,194 |          |         |          | 725,510  |         
|                                                         |                                                                                                                                                                                                 | Loss on disposal of assets              |                                                      |          | 15,066  |          |         |          | 22,073   |         
|                                                         |                                                                                                                                                                                                 | Deferred income taxes                   |                                                      |          |        |          |         |          | (300,000 | )       
|                                                         |                                                                                                                                                                                                 | Treasury stock issued for services      |                                                      |          |        |          |         |          | 530,636  |         
|                                                         |                                                                                                                                                                                                 | Treasury stock issued to employees      |                                                      |          |        |          |         |          | 69,757   |         
|                                                         |                                                                                                                                                                                                 | Cash provided by (used for) changes in: |                                                      |          |         |          |         |          |          |         
|                                                         |                                                                                                                                                                                                 |                                         | Accounts receivable                                  |          |         | 24,141   |         |          |          | (245,207 | )
|                                                         |                                                                                                                                                                                                 |                                         | Inventories                                          |          |         | 79,968   |         |          |          | 110,752  |  
|                                                         |                                                                                                                                                                                                 |                                         | Prepaid expenses                                     |          |         | 6,556    |         |          |          | (6,239   | )
|                                                         |                                                                                                                                                                                                 |                                         | Deposits                                             |          |         | (1,600   | )       |          |          | 10,538   |  
|                                                         |                                                                                                                                                                                                 |                                         | Accounts payable                                     |          |         | 81,426   |         |          |          | 165,107  |  
|                                                         |                                                                                                                                                                                                 |                                         | Accrued expenses                                     |          |         | 21,095   |         |          |          | 34,156   |  
|                                                         |                                                                                                                                                                                                 |                                         |                                                      |          |         |          |         |         
|                                                         |                                                                                                                                                                                                 |                                         | Net cash provided by operating activities            |          |         | 436,448  |         |          |          | 421,135  |  
|                                                         |                                                                                                                                                                                                 |                                         |                                                      |          |         |          |         |         
|Cash flows from investing activities:                    |                                                                                                                                                                                                 |                                         |                                                      |          |         |          |         |         
|                                                         | Patronage received from cooperative bank                                                                                                                                                        |                                         |                                                      | 6,364    |         |          |         | 2,833    |         
|                                                         | Purchase of property, plant, and equipment                                                                                                                                                      |                                         |                                                      | (45,193  | )       |          |         | (237,544 | )       
|                                                         | Increase in note receivable to officer                                                                                                                                                          |                                         |                                                      | (1,911   | )       |          |         | (38,500  | )       
|                                                         | Collections on note receivable from officer                                                                                                                                                     |                                         |                                                      |         |         |          |         | 4,557    |         
|                                                         |                                                                                                                                                                                                 |                                         |                                                      |          |         |          |         |         
|                                                         |                                                                                                                                                                                                 |                                         | Net cash used in investing activities                |          |         | (40,740  | )       |          |          | (268,654 | )
|                                                         |                                                                                                                                                                                                 |                                         |                                                      |          |         |          |         |         
|Cash flows from financing activities:                    |                                                                                                                                                                                                 |                                         |                                                      |          |         |          |         |         
|                                                         | Repayment of long-term debt                                                                                                                                                                     |                                         | $                                                    | (318,671 | )       |          |         | (332,870 | )       
|                                                         | Net repayment of line of credit                                                                                                                                                                 |                                         |                                                      | (50,000  | )       |          |         |         |         
|                                                         | Proceeds from stockholders                                                                                                                                                                      |                                         |                                                      | 85,000   |         |          |         | 42,000   |         
|                                                         | Proceeds from the sale of treasury stock                                                                                                                                                        |                                         |                                                      |         |         |          |         | 37,500   |         
|                                                         |                                                                                                                                                                                                 |                                         |                                                      |          |         |          |         |         
|                                                         |                                                                                                                                                                                                 |                                         | Net cash used in financing activities                |          |         | (283,671 | )       |          |          | (253,370 | )
|                                                         |                                                                                                                                                                                                 |                                         |                                                      |          |         |          |         |         
|                                                         |                                                                                                                                                                                                 |                                         | Net increase (decrease) in cash and cash equivalents |          |         | 112,037  |         |          |          | (100,889 | )
|                                                         |                                                                                                                                                                                                 |                                         |                                                      |          |         |          |         |         
|Cash and cash equivalents at beginning of year           |                                                                                                                                                                                                 |                                         | 72,390                                               |          |         |          | 173,279 |         
|                                                         |                                                                                                                                                                                                 |                                         |                                                      |          |         |          |         |         
|Cash and cash equivalents at end of year                 |                                                                                                                                                                                                 | $                                       | 184,427                                              |          |         |          | 72,390  |         
|                                                         |                                                                                                                                                                                                 |                                         |                                                      |          |         |          |         |         
|                                                         |                                                                                                                                                                                                 |                                         |                                                      |          |         |          |         |         
|Supplemental disclosure of cash flow information:        |                                                                                                                                                                                                 |                                         |                                                      |          |         |          |         |         
|                                                         | Cash paid for interest, exclusive of payable
to stockholder and capitalized interest                                                                                                            |                                         | $                                                    | 362,960  |         |          |         | 396,718  |         
|                                                         |                                                                                                                                                                                                 |                                         |                                                      |          |         |          |         |         
|Supplemental disclosure of noncash investing activities: |                                                                                                                                                                                                 |                                         |                                                      |          |         |          |         |         
|                                                         | During the year ended December 31, 2001, the Company
returned equipment with an estimated value of $45,000
to a vendor. As of December 31, 2001, this amount is
included in accounts receivable |                                         |                                                      |          |         |          |         |          |         

See accompanying notes to the financial statements.

12



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##### 



KNOX NURSERY, INC




Notes to Financial Statements

December 31, 2001 and 2000

|    |  |                                            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- |  | ------------------------------------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) |  | Summary of Significant Accounting Policies
|   
|    |  | (a)                                        |  | Description of Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|    |  |                                            |  | Knox Nursery, Inc. (the Company) is a Florida corporation since 1962,
having its offices in Orlando, Florida. The Company is a wholesale
plant nursery specializing in sales of seedling annuals (plugs) to
brokers and other nurseries located throughout the United States and
Canada; and sales of potted annuals to wholesalers, landscapers, and
large final-use customers located primarily in Central Florida.                                                                                             
|   
|    |  | (b)                                        |  | Managements Plans and Intentions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|    |  |                                            |  | The Company has experienced net losses of $496,398 and $695,948 for the
years ended December 31, 2001 and 2000, respectively, and has a working
capital deficit of $416,002 as of December 31, 2001. The Company
generated cash flows from operations of $436,448 and $421,135 for the
years ended December 31, 2001 and 2000, respectively. Management
intends to refinance its existing debt at more favorable terms (see
Note 5) and to reduce losses through decreased interest and other
cost-cutting measures.
|   
|    |  | (c)                                        |  | Revenue Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|    |  |                                            |  | Revenue is recognized when the product is shipped and the risk of loss
transfers.                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|    |  | (d)                                        |  | Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|    |  |                                            |  | Cash equivalents represent short-term, highly liquid commercial paper
readily convertible to cash.                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|    |  | (e)                                        |  | Inventories                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|    |  |                                            |  | Inventories of plants, seeds, and supplies are stated at the lower of
cost (first-in, first-out) or market.                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|    |  | (f)                                        |  | Investment in Cooperative Bank                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|    |  |                                            |  | Investment in cooperative bank is carried at cost increased for the
amount of patronage refund certificates and patrons equity allocated,
less distribution received.                                                                                                                                                                                                                                                                                                                                              

13



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KNOX NURSERY, INC.

Notes to Financial Statements

|    |  |                                                       |  |                                                                                                                                                                                                                                                       
|--- |  | ----------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) |  | Summary of Significant Accounting Policies, Continued
|   
|    |  | (g)                                                   |  | Property, Plant, and Equipment                                                                                                                                                                                                                        
|   
|    |  |                                                       |  | Property, plant, and equipment are stated at cost. Assets are
depreciated using the straight-line and accelerated methods over the
estimated useful lives of the assets. The estimated useful lives of
each class of depreciable asset are as follows:

|                               |  |                        |  | 
|------------------------------ |  | ---------------------- |  | 
|                               |  | Estimated useful lives
|                               |  |                       
|Building and improvements      |  | 5  40 years          
|Machinery and equipment        |  | 5  10 years          
|Automotive equipment           |  | 5  10 years          
|Office furniture and equipment |  | 3  10 years          

| |  |     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |  | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (h) |  | Deferred Loan Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  |     |  | Deferred loan costs are amortized over the life of the related loan
using a method which closely approximates the effective interest
method.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | (i) |  | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  |     |  | Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases and operating loss and tax credit carry
forwards. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that
includes the enactment date.
|
| |  |     |  | General business credits, which include investment tax credits and
job credits, are accounted for as a reduction of income tax liability
in the year realized.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

14



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##### 



KNOX NURSERY, INC.

Notes to Financial Statements

|    |  |                                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- |  | ----------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) |  | Summary of Significant Accounting Policies, Continued
|   
|    |  | (j)                                                   |  | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|    |  |                                                       |  | The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ form those estimates.                                   
|   
|    |  | (k)                                                   |  | Basic Loss per Common Share                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|    |  |                                                       |  | Basic loss per share amounts are based on the weighted average number
of common stock issued and outstanding during each year. Diluted
loss per share would be computed in a manner consistent with that of
basic loss per share while giving effect to the potential dilution
that could occur if the company had instrument, that if exercised,
would dilute the issued and outstanding common stock. The Company
has no such instruments.                                        
|   
|    |  | (l)                                                   |  | Common Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|    |  |                                                       |  | Common stock transactions for other than cash have been valued based
on quoted market prices. The Company records shares as outstanding
at the time the Company becomes contractually obligated to issue
shares.                                                                                                                                                                                                                                                                    
|   
|    |  | (m)                                                   |  | Impairment                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|    |  |                                                       |  | The Company periodically reviews long-lived assets to be held and
used in operations for impairment whenever events or changes in
circumstances indicate that the carrying value of an asset may not be
recoverable. An impairment loss is recognized when the estimated
undiscounted future cash flows from the assets are less than the
carrying value of the assets. Assets to be disposed of are reported
at the lower of their carrying amount or fair value less cost to
sell.
|   
|    |  | (n)                                                   |  | Advertising Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|    |  |                                                       |  | Advertising costs are expensed as incurred and are included in
operating expenses in the accompanying statements of operations.                                                                                                                                                                                                                                                                                                                                                     

15



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##### 



KNOX NURSERY, INC.

Notes to Financial Statements

|    |  |                                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- |  | ----------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) |  | Summary of Significant Accounting Policies, Continued
|   
|    |  | (o)                                                   |  | Fair Value of Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|    |  |                                                       |  | Fair value estimates discussed herein are based upon certain market
assumptions and pertinent information available to management. The
respective carrying value of certain on-balance-sheet financial
instruments approximate their fair values. These financial
instruments include cash, accounts receivable, accounts payable, and
accrued expenses. Fair values were assumed to approximate carrying
values for these financial instruments since they are short-term in
nature or they are receivable or payable on demand. The fair value
of the Companys debt, including amount due to stockholders, is
estimated based upon the quoted market prices for the same or similar
issues or on the current rates offered to the Company for debt of the
same remaining maturities. Fair value of these financial instruments
also approximates their carrying values due to their proximity to
current market rates.
|   
|    |  | (p)                                                   |  | Concentrations of Credit Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|    |  |                                                       |  | Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of cash and trade
receivables. The Company places its cash with high quality financial
institutions. At various times throughout fiscal 2001 and 2000, cash
balances held at financial institutions were in excess of federally
insured limits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|    |  |                                                       |  | The Company delivers products throughout the United States of
America. Almost all of the Companys sales are credit sales which
are primarily to customers whose ability to pay is dependent upon the
industry economics prevailing in their areas; however, concentrations
of credit risk with respect to trade receivables is limited due to
the large number of customers comprising the Companys customer base,
their dispersion across geographic areas, and generally short payment
terms. The Company also performs ongoing credit evaluations of its
customers to help further reduce credit risk.                                                                                                                                                                                                                                                                                                              
|   
|    |  |                                                       |  | The Companys plug sales to its three primary customers account for
63% of total plug sales. The Companys three largest finished plant
customers account for 24% of finished plant sales.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

16



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##### 



KNOX NURSERY, INC.

Notes to Financial Statements

|    |  |                                                         |  |                                                                                                               
|--- |  | ------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------
|(1) |  | Summary of Significant Accounting Policies, Continued  
|   
|    |  | (q)                                                     |  | Reclassifications                                                                                             
|   
|    |  |                                                         |  | Certain reclassifications have been made to the 2000 financial
statements to conform to the 2001 presentation.
|   
|(2) |  | Inventories                                            
|   
|    |  | Inventories at December 31, 2001 and 2000 consisted of:

|                       |  |      |           |      |  |  |           | 
|---------------------- |  | ---- | --------- | ---- |  |  | --------- | 
|                       |  | 2001 |           | 2000
|                       |  |      |           |     
|Work in process        |  | $    | 1,040,474 |      |  |  | 1,096,597 | 
|Materials and supplies |  |      | 135,313   |      |  |  | 159,158   | 
|                       |  |      |           |      |  |  |           | 
|Total inventories      |  | $    | 1,175,787 |      |  |  | 1,255,755 | 
|                       |  |      |           |      |  |  |           | 

|    |  |                                                                                          |  | 
|--- |  | ---------------------------------------------------------------------------------------- |  | 
|(3) |  | Property, Plant, and Equipment                                                          
|   
|    |  | Property, plant, and equipment at December 31, 2001 and 2000 consisted of
the following:

|                               |                                           |   |            |           |      |  |            |           | 
|------------------------------ | ----------------------------------------- | - | ---------- | --------- | ---- |  | ---------- | --------- | 
|                               |                                           |   | 2001       |           | 2000
|                               |                                           |   |            |           |     
|Land                           |                                           | $ | 272,169    |           |      |  | 272,169    |          
|Buildings and improvements     |                                           |   | 7,472,823  |           |      |  | 7,472,823  |          
|Machinery and equipment        |                                           |   | 1,643,124  |           |      |  | 1,685,032  |          
|Automotive equipment           |                                           |   | 315,330    |           |      |  | 315,330    |          
|Office furniture and equipment |                                           |   | 348,483    |           |      |  | 337,829    |          
|                               |                                           |   |            |           |      |  |            |          
|                               |                                           |   | 10,051,929 |           |      |  | 10,083,183 |          
|Less accumulated depreciation  |                                           |   | (4,886,084 | )         |      |  | (4,219,407 | )        
|                               |                                           |   |            |           |      |  |            |          
|                               | Total property, plant, and equipment, net |   | $          | 5,165,845 |      |  |            | 5,863,776 | 
|                               |                                           |   |            |           |      |  |            |          

|    |  |                                                                                                                                                                                                                                                    |  | 
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|    |  | Depreciation expense amounted to $683,058 and $702,375 for the years ended
December 31, 2001 and 2000, respectively. Management has reviewed
long-lived assets for impairment and determined that the carrying value of
the assets is recoverable.
|   
|(4) |  | Line of Credit                                                                                                                                                                                                                                    
|   
|    |  | Line of credit consists of the following at December 31, 2001 and 2000:                                                                                                                                                                           

|                                                                                                                                                                                                                                                               |  |      |         |      |  |  |         | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------- | ---- |  |  | ------- | 
|                                                                                                                                                                                                                                                               |  | 2001 |         | 2000
|                                                                                                                                                                                                                                                               |  |      |         |     
|Credit line loan ($550,000 limit at December 31,
2001) with interest equal to the prime rate plus 3%
(7.75% as of December 31, 2001). Line of credit
renews annually with similar terms and rates. Loan
is collateralized by land, buildings, and
improvements |  | $    | 550,000 |      |  |  | 600,000 | 
|                                                                                                                                                                                                                                                               |  |      |         |      |  |  |         | 

17



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##### 



KNOX NURSERY, INC.

Notes to Financial Statements

|    |  |                                                                          |  | 
|--- |  | ------------------------------------------------------------------------ |  | 
|(5) |  | Long-Term Debt                                                          
|   
|    |  | Long-term debt consisted of the following at December 31, 2001 and 2000:

|                                                                                                                                                                                                                                                                                                             |                           |                                                      |           |           |           |      |           |           |           | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------- | ---------------------------------------------------- | --------- | --------- | --------- | ---- | --------- | --------- | --------- | 
|                                                                                                                                                                                                                                                                                                             |                           |                                                      |           | 2001      |           | 2000
|                                                                                                                                                                                                                                                                                                             |                           |                                                      |           |           |           |     
|NationsBank:                                                                                                                                                                                                                                                                                                 |                           |                                                      |           |           |           |      |           |          
|Construction loan ($4,500,000 limit) with interest
fixed at 7.5%, principal and interest due in level
monthly payments based on a 15-year amortization with
a final balloon payment of all unpaid principal and
accrued interest on May 8, 2002. Loan is
collateralized by land, buildings, and improvements |                           | $                                                    | 3,465,638 |           |           |      | 3,713,588 |          
|Commercial loan with interest at a fixed rate of
7.5%. Loan was fully repaid during 2001                                                                                                                                                                                                                     |                           |                                                      |          |           |           |      | 7,469     |          
|Commercial loan with interest at a fixed rate of
8.5%, due in 59 equal monthly installments ending
August 25, 2004. Loan is collateralized by land,
buildings, and improvements                                                                                                                              |                           |                                                      | 175,884   |           |           |      | 232,142   |          
|Commercial loan with interest at a fixed rate of
9.0%, due in 60 equal monthly installments ending
August 1, 2004. Loan is collateralized by a vehicle                                                                                                                                                       |                           |                                                      | 25,785    |           |           |      | 32,779    |          
|                                                                                                                                                                                                                                                                                                             |                           |                                                      |           |           |           |      |           |          
|                                                                                                                                                                                                                                                                                                             | Total long-term debt      |                                                      |           | 3,667,307 |           |      |           | 3,985,978 |          
|                                                                                                                                                                                                                                                                                                             | Less current installments |                                                      |           | 191,849   |           |      |           | 347,712   |          
|                                                                                                                                                                                                                                                                                                             |                           |                                                      |           |           |           |      |           |          
|                                                                                                                                                                                                                                                                                                             |                           | Total long-term debt, excluding current
installments |           | $         | 3,475,458 |      |           |           | 3,638,266 | 
|                                                                                                                                                                                                                                                                                                             |                           |                                                      |           |           |           |      |           |          

|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | 
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|(5) |  | Long-Term Debt, Continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|    |  | Subsequent to year end, the Company refinanced their construction loan,
credit line loan, and the commercial loan with an outstanding balance of
$175,894 at December 31, 2001, with Farm Credit of Central Florida. The
refinancing loan amounts to $4,292,000 and is payable in 59 equal
principal installments of $23,844 plus accrued interest and a final
installment of all unpaid principal and interest due March 1, 2007. The
note bears interest at 5.375% and is collateralized by a real estate
security instrument.
|   
|    |  | As refinanced, the aggregate principal maturities for the years subsequent
to December 31, 2001 are approximately as follows:                                                                                                                                                                                                                                                                                                                                                                                                   

|           |  |   |           | 
|---------- |  | - | --------- | 
|2002       |  | $ | 191,849   | 
|2003       |  |   | 252,495   | 
|2004       |  |   | 249,045   | 
|2005       |  |   | 242,765   | 
|2006       |  |   | 242,765   | 
|Thereafter |  |   | 2,488,387 | 
|           |  |   |           | 
|           |  | $ | 3,667,307 | 
|           |  |   |           | 

18



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##### 



KNOX NURSERY, INC.

Notes to Financial Statements

|    |  |                                                                                                                                                                                                                                                                                                                                                                              |  | 
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|(6) |  | Leases                                                                                                                                                                                                                                                                                                                                                                      
|   
|    |  | The Company leases certain production equipment under lease agreements
classified as operating leases. Future minimum lease payments under
non-cancelable operating leases (with initial or remaining lease terms in
excess of one year) as of December 31, 2001 is $0 . Rent expense for the
years ended December 31, 2001 and 2000 was $93,475 and $124,913,
respectively.
|   
|(7) |  | Income Taxes                                                                                                                                                                                                                                                                                                                                                                
|   
|    |  | Income tax benefit for the years ended December 31, 2001 and 2000
consisted of the following:                                                                                                                                                                                                                                                                               

|      |         |  |         |   |          |  |       |          |   |  |  |          |  
|----- | ------- |  | ------- | - | -------- |  | ----- | -------- | - |  |  | -------- | -
|      |         |  | Current |   | Deferred |  | Total
|      |         |  |         |   |          |  |      
|2001: |         |  |         |   |          |  |       |          |   |  |  |         
|      | Federal |  | $       |  |          |  |       |         |   |  |  |         |  
|      | State   |  |         |  |          |  |       |         |   |  |  |         |  
|      |         |  |         |   |          |  |       |          |   |  |  |          |  
|      |         |  |         |  |          |  |       |         |   |  |  |         |  
|2000: |         |  |         |   |          |  |       |          |   |  |  |          |  
|      | Federal |  |         |  |          |  |       | (273,460 | ) |  |  | (273,460 | )
|      | State   |  |         |  |          |  |       | (26,540  | ) |  |  | (26,540  | )
|      |         |  |         |   |          |  |       |          |   |  |  |          |  
|      |         |  | $       |  |          |  |       | (300,000 | ) |  |  | (300,000 | )
|      |         |  |         |   |          |  |       |          |   |  |  |          |  

| |  |                                                                                                                                                                                                                          |  | 
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | 
| |  | Total income tax benefit for the years ended December 31, 2001 and 2000
differed from amounts computed by applying the U.S. federal income tax
rate of 34% to net loss before income taxes as a result of the following:

|                                                     |                                                             |   |          |         |      |  |          |         |  
|---------------------------------------------------- | ----------------------------------------------------------- | - | -------- | ------- | ---- |  | -------- | ------- | -
|                                                     |                                                             |   | 2001     |         | 2000
|                                                     |                                                             |   |          |         |     
|Computed expected tax benefit                      |                                                             | $ | (168,775 | )       |      |  | (338,622 | )      
|Increase (reduction) in income taxes resulting from: |                                                             |   |          |         |      |  |          |        
|                                                     | State income tax benefit, net of federal income
tax benefit |   |          | (14,516 | )    |  |          | (36,153 | )
|                                                     | Non-deductible expenses                                     |   |          | 4,913   |      |  |          | 5,286   |  
|                                                     | General business credits                                    |   |          |        |      |  |          | 12,311  |  
|                                                     | Change in valuation allowance                               |   |          | 227,056 |      |  |          | 80,000  |  
|                                                     | Other, net                                                  |   |          | (48,678 | )    |  |          | (22,822 | )
|                                                     |                                                             |   |          |         |      |  |          |        
|                                                     |                                                             | $ |         |         |      |  | (300,000 | )      
|                                                     |                                                             |   |          |         |      |  |          |        

| |  |                                                                                                                                                                                            |  | 
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | 
| |  | The tax effects of temporary differences that give rise to a significant
portion of the deferred tax assets and deferred tax liabilities as of
December 31, 2001 and 2000 were as follows:

19



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##### 



KNOX NURSERY, INC.

Notes to Financial Statements

|    |  |                         |  | 
|--- |  | ----------------------- |  | 
|(7) |  | Income Taxes, Continued

|                                                                                 |                                      |   |           |           |      |  |           |           |   |  |  |  | 
|-------------------------------------------------------------------------------- | ------------------------------------ | - | --------- | --------- | ---- |  | --------- | --------- | - |  |  |  | 
|                                                                                 |                                      |   | 2001      |           | 2000
|                                                                                 |                                      |   |           |           |     
|Deferred tax assets:                                                             |                                      |   |           |           |      |  |           |          
|General business credits                                                         |                                      | $ | 93,792    |           |      |  | 93,792    |          
|Net operating loss carry forward                                                 |                                      |   | 1,598,733 |           |      |  | 1,284,839 |          
|Allowance for bad debts                                                          |                                      |   | 12,220    |           |      |  | 12,165    |          
|Charitable contributions                                                         |                                      |   | 1,067     |           |      |  |          |          
|                                                                                 |                                      |   |           |           |      |  |           |          
|                                                                                 | Total gross deferred tax assets      |   |           | 1,705,812 |      |  |           | 1,390,796 |  
|                                                                                 | Less valuation allowance             |   |           | (480,556  | )    |  |           | (253,500  | )
|                                                                                 |                                      |   |           |           |      |  |           |          
|                                                                                 | Net deferred tax assets              |   |           | 1,225,256 |      |  |           | 1,137,296 |  
|Deferred tax liabilities:                                                        |                                      |   |           |           |      |  |           |          
|Inventory                                                                        |                                      |   | 442,096   |           |      |  | 472,164   |          
|Property, plant, and equipment, principally
due to differences   in
depreciation |                                      |   | 783,160   |           |      |  | 665,132   |          
|                                                                                 |                                      |   |           |           |      |  |           |          
|                                                                                 | Total gross deferred tax liabilities |   |           | 1,225,256 |      |  |           | 1,137,296 |  
|                                                                                 |                                      |   |           |           |      |  |           |          
|                                                                                 | Net deferred tax                     |   | $         |          |      |  |           |          |  
|                                                                                 |                                      |   |           |           |      |  |           |          

|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | 
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|    |  | At December 31, 2001 and 2000, the Company had net operating loss carry
forwards of approximately $5,302,000 and $4,463,000, respectively, for the
state of Florida and $4,072,000 and $3,238,000, respectively, for federal
income tax purposes, which are available to offset future taxable income,
if any, through 2021. The Company also had general business credit carry
forwards for federal income tax purposes of approximately $93,792 which
are available to reduce future federal income taxes, if any, through 2009.
|   
|(8) |  | Profit Sharing Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|    |  | The Company has established a voluntary employee 401(k) savings plan
available to all employees who meet certain eligibility requirements. The
plan provides for a matching contribution by the Company of the employees
contribution to the plan not to exceed certain specified limits. During
the years ended December 31, 2001 and 2000, total Company contributions to
the plan were $20,363 and $24,178, respectively.                                                                                                     

|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | 
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|(9)  |  | Advertising Costs                                                                                                                                                                                                                                                                                                                                                                                                                  
|    
|     |  | Advertising costs for the years ended December 31, 2001 and 2000 amounted
to approximately $14,396 and $553,360, respectively.                                                                                                                                                                                                                                                                                                     
|    
|(10) |  | Related Party Transaction                                                                                                                                                                                                                                                                                                                                                                                                          
|    
|     |  | As of December 31, 2001 and 2000, the Company had a note receivable,
including accrued interest, from an officer of $35,854 and $33,943,
respectively. The note bears interest at 5.63% and is unsecured. The
Company also had a note payable to a stockholder amounting to $422,000 and
$337,000 as of December 31, 2001 and 2000, respectively. The note bears
interest at 10% and is unsecured and there are no repayment terms.

20



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##### 



ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

There have been no changes in, or disagreements with, the accountants for the
Company which require reporting under Item 9.




PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS

Our directors, executive officers, and key employees are as follows:

|               |  |     |    |                           |  |                             |  | 
|-------------- |  | --- | -- | ------------------------- |  | --------------------------- |  | 
|Name           |  | Age |    | Position with the Company
|               |  |     |    |                          
|Bruce R. Knox  |  |     | 36 |                           |  | President and Director     
|James M. Knox  |  |     | 40 |                           |  | Vice President and Director
|M. Nadine Knox |  |     | 67 |                           |  | Director                   

BRUCE R. KNOX, PRESIDENT

Bruce R. Knox was born in Orlando, Florida on October 5, 1965. He graduated
from Bishop Moore High School in May, 1983 and soon entered the family
business. Bruce began in production and has been a supervisor in all areas of
the nursery, culminating with his appointment as President in March, 1995.

Bruce has served the state floriculture industry as well. He has previously
served on the State Board of Directors for the Florida Ornamental Growers
Association, and the Board of Directors of the Action Chapter of the Florida
Nurseryman and Growers Association. Bruce is a widely respected speaker on
industry topics and has been a featured speaker at such forums as the Seeley
Conference, the Professional Plant Growers Association, and the Southeast
Greenhouse Conference.

Bruce has done extensive travel researching nursery automation systems in the
United States and Europe. The benefits of this research resulted in the
construction of one of the most technologically advanced greenhouse ranges in
the world, Knox Nurserys Avalon Plug Production Facility, which opened in
February, 1997.

JAMES M. (MONTY) KNOX, III, VICE PRESIDENT

Monty Knox was born on January 23, 1962 in Orlando, Florida. Monty graduated
from Bishop Moore High School in May, 1980 and attended the University of
Central Florida. He joined Knox Nursery in October, 1983. Monty started in
production, planning and sales. Monty was appointed Vice President in January,
1987.

Monty has served the nursery industry extensively in the State of Florida.
Monty has served on the Florida Nurseryman and Growers Association State Board
of Directors, Marketing Committee and FNATS Trade Show. He has served on the
Action Chapter of FNGAs Board of Directors, culminating as President in 1998.
Monty serves on the Florida Farm Bureaus State Water

21



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##### 



Advisory Committee, Tax Advisory Committee, the Orange County Farm Bureaus
Board of Directors and is Vice Chairman of the Orange County Farm Bureau PAC.
Monty also serves on Orange Countys Planning and Zoning Commission and Local
Planning Agency. Monty has been Chairman of Orange Countys Agricultural Board
since 1995.

M. NADINE KNOX, DIRECTOR

M. Nadine Knox was born August 5, 1934 and is a founder of Knox Nursery
beginning in 1962. She was the office manager until 1999 and remains a
director of the Company today. She is the mother of Bruce R. Knox and James
M. Knox, III.

ITEM 10. EXECUTIVE COMPENSATION

The following table sets forth certain information relating to the compensation
paid by the Company for the years 2000 and 2001, as well as proposed
compensation for 2002.

22



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##### 



|                             |  |      |      |        |  |                     |        |       |  |  |       |  |  |  |       | 
|---------------------------- |  | ---- | ---- | ------ |  | ------------------- | ------ | ----- |  |  | ----- |  |  |  | ----- | 
|Name and                     |  |      |      |        |  | Annual Compensation
|Principal                    |  |      |      |        |  |                    
|Position                     |  | Year |      | Salary |  | Bonus               |        | Other
|                             |  |      |      |        |  |                     |        |      
|Bruce R. Knox                |  |      |      |        |  |                     |        |       |  |  |       |  |  |  |       | 
|President, Director          |  |      | 2002 |        |  |                     | 52,000 |       |  |  | -0-   |  |  |  | -0-   | 
|                             |  |      | 2001 |        |  |                     | 52,000 |       |  |  | -0-   |  |  |  | -0-   | 
|                             |  |      | 2000 |        |  |                     | 52,000 |       |  |  | -0-   |  |  |  | -0-   | 
|James M. Knox, III           |  |      |      |        |  |                     |        |       |  |  |       |  |  |  |       | 
|VP, Director                 |  |      | 2002 |        |  |                     | 23,400 |       |  |  | -0-   |  |  |  | -0-   | 
|                             |  |      | 2001 |        |  |                     | 25,000 |       |  |  | -0-   |  |  |  | -0-   | 
|                             |  |      | 2000 |        |  |                     | 25,000 |       |  |  | 1,000 |  |  |  | 1,694 | 
|M. Nadine Knox               |  |      |      |        |  |                     |        |       |  |  |       |  |  |  |       | 
|Secretary/Treasurer
Director |  |      | 2002 |        |  |                     | -0-    |       |  |  | -0-   |  |  |  | -0-   | 
|                             |  |      | 2001 |        |  |                     | -0-    |       |  |  | -0-   |  |  |  | -0-   | 
|                             |  |      | 2000 |        |  |                     | 15,000 |       |  |  | -0-   |  |  |  | -0-   | 

Footnotes:




|1. |  | In 1996, the Company loaned James M. Knox, III $5,000, repayment of which
has been forgiven. In 1997, 1998 and 1999, Mr. Knox received 1099s
reflecting the forgiven debt and interest. Mr. Knox borrowed $38,500 in 2000,
the Company purchased a car from Mr. Knox for $6000, applying the payment to
his outstanding loan balance.                                                              
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | No other forms of compensation was received by the above principals.
Section 16(a) Beneficial Ownership Reporting Compliance:
The Company is not aware of any director, officer or beneficial owner of more
than ten percent of the Companys Common Stock that, during fiscal year
2001, failed to file on a timely basis reports required by Section 16(a) of the
securities Exchange Act of 1934.

Section 16(a) Beneficial Ownership Reporting Compliance:



| |                                                                                                                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company is not aware of any director, officer, or beneficial owner of
more than ten percent of the Companys Common Stock that, during fiscal year
2001, failed to file on a timely basis reports required by Section 16(a) of
the Securities Exchange Act of 1934.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following tables set forth certain information regarding the beneficial
ownership of the Companys Common Stock as of December 31, 2001 by (1) each
person (or group of affiliated persons) who to the knowledge of the Company is
the beneficial owner of five percent or more of the Companys outstanding
Common Stock, (2) each Director and each named Executive Officer of the
Company. Except as otherwise noted, the Company believes that the persons
listed in this table have sole voting and investment power respecting all
shares of Common Stock owned by them. The business address of each Director and
Executive Officer listed below is the Companys corporate address, 4349 N.
Hiawassee Road, Orlando, Florida, 32818.

23



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##### 



Table 1. Security Ownership of Certain Beneficial Owners

|               |  |                                                                                |  |                     |         |          |  |  |     |  
|-------------- |  | ------------------------------------------------------------------------------ |  | ------------------- | ------- | -------- |  |  | --- | -
|               |  | Name and Address of                                                            |  | Amount
and Nature   |         | Percent 
|Title of Class |  | Beneficial Owner                                                               |  | of
Beneficial Owner |         | of
Class
|               |  |                                                                                |  |                     |         |         
|Common Stock   |  | James M. Knox, Jr.
(Former President)
11056 Bayshore Drive
Windermere, Florida |  |                     | 603,950 |          |  |  | 5.0 | %

Table 2. Security Ownership of Management and Director

|             |  |                                                                 |  |  |           |  |  |  |      |  
|------------ |  | --------------------------------------------------------------- |  |  | --------- |  |  |  | ---- | -
|Common Stock |  | Bruce R. Knox
6613 Abeydon Ct.
Orlando, Florida 32818           |  |  | 2,310,616 |  |  |  | 19.2 | %
|            
|Common Stock |  | James M. Knox, III
4349 N. Hiawassee Rd.
Orlando, Florida 32818 |  |  | 2,310,616 |  |  |  | 19.2 | %
|            
|Common Stock |  | M. Nadine Knox
11056 Bayshore Drive
Windermere, Florida         |  |  | 2,310,618 |  |  |  | 19.2 | %

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company had the following transactions with related parties:

M. Nadine Knox (director) loaned the Company $295,000 in 1999 and $352,000 in
2000 and was repaid $310,000 in 2000. The long term balance payable to M.
Nadine Knox at 12/31/00 was $337,000. M. Nadine Knox loaned the Company
$85,000 on 1/31/01.

Bruce R. Knox (officer) loaned the Company $100,000 in 2000, and was repaid in
full in 2000.

James M. Knox, III (officer) borrowed $1,667 in 1999 and $38,500 in 2000. The
1999 loan was forgiven in 1999. In 2000 the Company purchased a car from James
M. Knox III, and applied the purchase price to interest and principle owed
leaving an outstanding balance $33,943.

Dean Dowda (minority shareholder) loaned the Company $100,000 on 1/31/01. The
Company repaid the loan in June of 2001.

ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K.

No current reports on Form 8-K were filed by the Company during the fourth
quarter ended December 31, 2001.

24



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##### 



KNOX NURSERY, INC.




SIGNATURES

Pursuant to the requirement of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant has caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.

|                     |  |                                                      
|-------------------- |  | -----------------------------------------------------
|                     |  | KNOX NURSERY, INC.
Registrant                        
|                    
|Date: April 12, 2002 |  | /s/ BRUCE R. KNOX                                    
|                     |  |                                                      
|                     |  | Bruce R. Knox
President
(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report
Is signed below by the following persons on behalf of the registrant on the
dates and in the capacities indicated.

|                       |  |                |  |               
|---------------------- |  | -------------- |  | --------------
|Name                   |  | Title          |  | Dates         
|                       |  |                |  |               
|                      
|/s/ Bruce R. Knox      |  | President      |  | April 12, 2002
|                       |  | Director       |  |               
|Bruce R. Knox          |  |                |  |               
|                      
|/s/ James M. Knox, III |  | Vice President |  | April 12, 2002
|                       |  | Director       |  |               
|James M. Knox, III     |  |                |  |               
|                      
|/s/ M. Nadine Knox     |  | Director       |  | April 12, 2002
|                       |  |                |  |               
|M. Nadine Knox         |  |                |  |               

25