<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-21081
CARIBBEAN CIGAR COMPANY
(Exact name of registrant as specified in its charter)
FLORIDA 65-0613303
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
8305 N.W. 27th STREET, SUITE 111, MIAMI, FLORIDA
(Address of principal executive offices)
33122
(Zip Code)
(305) 267-3911
(Issuer's telephone number)
Indicate by check 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
Indicate the number of shares outstanding of each issuer's classes of common
stock, as of the latest practicable date:
5,130,732 shares as of February 17, 1998
Page 1 of 13
<PAGE> 2
CARIBBEAN CIGAR COMPANY AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
No.
----
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets - December 31, 1997 and March 31, 1997 3
Condensed Statements of Operations - Periods ended December 31,
1997 and December 31, 1996 4
Condensed Statements of Cash Flows - Periods ended December 31,
1997 and December 31, 1996 5
Notes to Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II. - OTHER INFORMATION
</TABLE>
Page 2 of 13
<PAGE> 3
CARIBBEAN CIGAR COMPANY AND SUBSIDIARIES
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
DEC. 31, MARCH 31,
1997 1997
------------ ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 98,342 $ 2,890,870
Accounts receivable, net 886,173 1,080,952
Due from related parties 66,489 58,314
Inventory 5,705,961 3,782,738
Prepaid expenses 488,925 1,416,563
Net assets held for sale 1,428,394 1,591,815
------------ ------------
Total current assets 8,674,284 10,821,252
Property and equipment, net 1,820,452 1,368,035
Other assets 1,037,763 119,179
------------ ------------
$ 11,532,499 $ 12,308,466
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,842,206 $ 1,452,428
Short-term borrowings 2,250,695 --
Accrued royalties 344,167 --
Accrued expenses and taxes payable 793,128 157,299
------------ ------------
Total current liabilities 5,230,196 1,609,727
------------ ------------
Commitments and contingencies -- --
Stockholders' equity:
Preferred stock, $.01 par value;
2,000,000 shares authorized, none
issued and outstanding -- --
Common stock, $.001 value; 10,000,000
Shares authorized; December 31, 1997
issued and outstanding - 5,130,732;
March 31, 1997 - issued and
outstanding - 5,126,218 5,131 5,126
Capital in excess of par value 11,384,053 11,359,862
Accumulated deficit (5,086,881) (666,249)
------------ ------------
6,302,303 10,698,739
------------ ------------
$ 11,532,499 $ 12,308,466
============ ============
</TABLE>
The accompanying notes are an integral part hereof.
Page 3 of 13
<PAGE> 4
CARIBBEAN CIGAR COMPANY AND SUBSIDIARIES
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
--------------------------- ---------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Sales $ 1,442,864 $ 2,580,745 $ 5,229,235 $ 4,856,955
Cost of sales 1,644,491 1,979,643 4,254,895 3,915,654
Write-off of inventory -- -- 743,974 --
----------- ----------- ----------- -----------
1,644,491 1,979,643 4,998,869 3,915,654
----------- ----------- ----------- -----------
Gross profit (loss) (201,627) 601,102 230,366 941,301
----------- ----------- ----------- -----------
Operating expenses:
Selling expenses 103,510 133,403 1,046,772 445,765
General and administrative
expenses 1,188,641 548,437 3,082,900 1,058,448
----------- ----------- ----------- -----------
1,292,151 681,840 4,129,672 1,504,213
----------- ----------- ----------- -----------
Operating income (loss) (1,493,778) (80,738) (3,899,306) (562,912)
Interest income -- 87,653 11,479 154,789
Interest expense (169,134) -- (193,027) (3,512)
----------- ----------- ----------- -----------
(169,134) 87,653 (181,548) 151,277
----------- ----------- ----------- -----------
Income (loss) from continuing
operations (1,662,912) 6,915 (4,080,854) (411,635)
Income (loss) from discontinued
operations (100,042) 100,862 (339,778) 150,683
----------- ----------- ----------- -----------
Net income (loss) $(1,762,954) $ 107,777 $(4,420,632) $ (260,952)
=========== =========== =========== ===========
Income (loss) from continuing
operations per common and
common equivalent share out-
standing $ (0.32) $ 0.00 $ (0.79) $ (0.08)
Income (loss) from discontinued
operations per common and
common equivalent share out-
standing (0.02) 0.02 (0.07) 0.03
----------- ----------- ----------- -----------
Net income (loss) per common and
common equivalent share out-
standing $ (0.34) $ 0.02 $ (0.86) $ (0.05)
=========== =========== =========== ===========
Weighted average number of common
and common equivalent shares
outstanding 5,130,732 6,286,197 5,130,357 5,569,355
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part hereof.
Page 4 of 13
<PAGE> 5
CARIBBEAN CIGAR COMPANY AND SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
December 31,
---------------------------
1997 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss from continuing operations $(4,080,854) $ (411,635)
Net income (loss) from discontinued
operations (339,778) 150,683
Adjustments to reconcile net income
(loss) to net cash provided (used)
by operating activities:
Depreciation and amortization 465,260 163,770
Allowance for doubtful accounts 150,000 --
Write-off of inventory 122,483 --
Amortization of unearned compensation -- 9,867
Common stock issued for services 24,196 --
Decrease(increase) in accounts receivable 44,779 (704,119)
Increase in inventory (782,986) (1,734,639)
Increase in prepaid expenses (262,408) (925,470)
Increase in other assets (913,939) (497,836)
Increase (decrease) in accounts payable 367,963 411,912
Increase (decrease) in accrued expenses 992,033 308,163
----------- -----------
Net cash (used) by operating activities (4,213,251) (3,159,234)
----------- -----------
Cash flows from investing activities:
Additions to property and equipment (821,067) (1,463,424)
Trademark costs (1,180) (17,758)
----------- -----------
Net cash (used) by investing activities (822,247) (1,481,182)
----------- -----------
Cash flows from financing activities:
Proceeds from issuance of common stock -- 9,376,665
Increase in short-term borrowings 2,250,695 --
Advances from officers and directors 249,700 --
Repayments of advances from officers
and directors (249,700) --
Advances to related parties 9,274 --
Repayment of advances to related parties (17,449) (41,308)
----------- -----------
Net cash provided by financing activities 2,242,520 9,335,357
----------- -----------
Net (decrease) in cash (2,792,978) 4,694,941
Cash at beginning of period 2,896,620 748,801
----------- -----------
Cash at end of period $ 103,642 $ 5,443,742
=========== ===========
Supplemental information:
Cash paid for interest $ 91,334 $ 3,512
=========== ===========
Cash paid for federal income tax $ -- $ --
=========== ===========
</TABLE>
The accompanying notes are an integral part hereof.
Page 5 of 13
<PAGE> 6
CARIBBEAN CIGAR COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1997
In the opinion of management, the accompanying unaudited condensed
financial statements contain all adjustments (consisting only of normal
recurring adjustments) necessary to present fairly the financial position of the
Company as of December 31, 1997, and the results of its operations and cash
flows for the nine months ended December 31, 1997 and 1996. Such financial
statements have been condensed in accordance with the applicable regulations of
the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been omitted. It is suggested that these condensed financial
statements be read in conjunction with the Company's audited financial
statements and notes thereto for the year ended March 31, 1997 included in its
Annual Report filed on Form 10-KSB, file no. 0-28728, which was filed on June
30, 1997. The results of operations for the nine months ended December 31, 1997
are not necessarily indicative of operating results for the full year.
Certain reclassifications have been made to the prior period financial
statements to conform to the current presentation.
1. INCOME (LOSS) PER SHARE:
Income (loss) per share for the nine months ended December 31, 1997 and
1996 is based upon the weighted average number of shares of common stock
outstanding during the period. The calculation gives retroactive effect (as if
to inception of the Company) to those shares issued to founders at par value.
Additionally, stock and stock options issued during fiscal 1996 have been
treated as outstanding since October 3, 1994 (inception), the dilutive effective
of which was computed using the treasury stock method.
2. DISCONTINUED OPERATIONS
In August, 1997, the Company's Board of Directors decided to sell its
retail business segment as part of the Company's strategic focus on its
manufacturing and wholesale business. The segment has been accounted for as
discontinued operations in accordance with APB 30, which among other provisions,
requires the plan of disposal to be carried out within one year.
The operating results of the discontinued operations are summarized as
follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
---------------------- --------------------------
1997 1996 1997 1996
--------- -------- ----------- ----------
<S> <C> <C> <C> <C>
Sales $ 536,686 $494,611 $ 1,772,901 $1,219,946
========= ======== =========== ==========
Net income (loss) $(100,042) $100,862 $ (339,778) $ 150,683
========= ======== =========== ==========
Net income (loss) per common and
common share equivalent out-
standing $ (0.02) $ 0.02 $ (0.07) $ 0.03
========= ======== =========== ==========
</TABLE>
The operating results of the discontinued operations include certain allocations
of corporate overheads associated with the retail division.
Page 6 of 13
<PAGE> 7
The net assets of discontinued operations are summarized as follows:
<TABLE>
<CAPTION>
December 31,
-----------------------------
1997 1996
----------- -----------
<S> <C> <C>
Current assets 754,840 705,481
Property and equipment, net 649,660 867,573
Other assets 35,931 40,576
Current liabilities (12,037) (21,815)
----------- -----------
Net assets of discontinued operations $ 1,428,394 $ 1,591,815
=========== ===========
</TABLE>
3. STOCKHOLDERS' EQUITY
In April 1997, the Company granted each of the six members of its Board
of Directors options to purchase 2,500 shares of the Company's common stock
pursuant to the provisions of its Long Term Incentive Stock Option Plan.
In addition, in May 1997 and October 1997, 3,951 shares and 563 shares,
respectively of its common stock were issued in exchange for services rendered
to the Company.
4. SHORT-TERM BORROWINGS
On June 20, 1997, the Company borrowed $250,000 from five of its
directors. In connection with such borrowing, the Company agreed to issue (a)
its 8% subordinated promissory notes due July 1, 1998 in the aggregate principal
amount of $250,000, and (b) five-year warrants to purchase an aggregate of
187,500 share of Common Stock at $6.18 per share. The notes were repaid from the
proceeds of the Finova Credit Facility which is described in footnote 5 below.
In December 1997, the Company borrowed $455,000 under a series of 9%
subordinated promissory notes due 60 days from the date of funding. In
connection with the borrowing, the Company agreed to issue shares of common
stock in an amount based upon the length of time the loans remain outstanding.
5. CREDIT FACILITY
On August 28, 1997, the Company entered into a credit facility with
Finova Capital Corporation (the "Finova Credit Facility"). Under the terms of
the Finova Credit Facility, the Company can borrow up to a maximum of
$3,000,000, subject to limitations based upon eligible accounts receivable and
inventory. The Finova Credit Facility expires in two years and bears interest at
prime plus 2.5% per annum. As of December 31, 1997, the Company had borrowed
approximately $1,700,000 under the facility.
6. LITIGATION
The Company, its president and former chief financial officer have been
named defendants in six class action complaints filed in the United States
District Court for the Southern District of Florida. The complaints allege
violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Securities and Exchange Commission Rule 10b-5. The Company expects that the
separate litigation will be consolidated into a single action. The litigation is
in a preliminary stage and the Company expects to assert all available defenses.
Due to the preliminary stage of these matters, the Company has not determined
whether it has any liability exposure, although it has recorded a $200,000
reserve for defense costs.
Page 7 of 13
<PAGE> 8
7. OTHER MATTERS
The Company has been advised that certain past sales practices in its
retail division could give rise to claims alleging trademark infringement. The
Company's counsel has reviewed this matter, and the Company's retail division
has discontinued the sale of the cigars in question. The Company does not
believe that it has any material liability in connection with such sales.
On November 25, 1997, Edward C. Williams, the chief financial officer
of the Company, was elected as a director of the Company.
On December 22, 1997, Stephen N. Wertheimer was elected as a director
of the Company.
8. RESIGNATIONS
Effective November 19, 1997, Eric Kamisher, Luciano Nicasio and Thomas
Dilk have resigned as Directors of the Company. Such resignations resulted, in
part, from a disagreement about the Company's operations, policies and
practices, including the financial statements contained in this Report on Form
10-QSB. The Company believes that the results of operations and other financial
statements contained in this Report on Form 10-QSB present fairly the results of
operations and financial condition of the Company as at the dates and for the
periods covered hereby. Carlos Torano also resigned as a Director of the Company
on or about August 15, 1997. Mr. Torano's resignation was not caused by any
disagreement about the Company's operations, policies or practices.
Effective November 26, 1997, Alfred J. Berger, Jr. resigned as an
executive officer of, and on December 5, 1997 resigned as a Director of the
Company. Mr. Berger's resignation was not caused by any disagreement about the
Company's operations, policies or practices.
Effective November 26, 1997, Lawrence D. Frutkin resigned as an
executive officer of the Company. Mr. Frutkin's resignation was not caused by
any disagreement about the Company's operations, policies or practices.
9. SUBSEQUENT EVENTS
Effective January 15, 1998, Curtis Zimmerman was elected as a Director
of the Company.
In January 1998, approximately 220,000 pounds of the tobacco located in
the Company's Jaibon, Dominican Republic processing facility was damaged due to
a flood. The loss was covered by insurance and on February 11, 1998, the Company
agreed to settle the claim with the insurance company for approximately
$1,500,000. The remaining tobacco is sufficient to enable the Company to
manufacture cigars through March 31, 1999.
Page 8 of 13
<PAGE> 9
CARIBBEAN CIGAR COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion and analysis should be read in conjunction
with the condensed consolidation financial statements and notes thereto included
elsewhere herein.
COMPARISON OF RESULTS OF OPERATIONS
The following table presents, for the periods indicated, certain items
in the condensed consolidated statements of operations as a percentage of total
sales.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
------------------ ------------------
1997 1996 1997 1996
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sales 100.0% 100.0% 100.0% 100.0%
------ ------ ------ ------
Cost of sales 114.0 76.7 81.4 80.6
Write-off of inventory 0.0 0.0 14.2 0.0
------ ------ ------ ------
114.0 76.7 95.6 80.6
------ ------ ------ ------
Gross profit (loss) (14.0) 23.3 4.4 19.4
Operating expenses
Selling expenses 7.2 5.2 20.0 9.2
General and administrative expenses 82.4 21.3 59.0 21.8
------ ------ ------ ------
89.6 26.5 79.0 31.0
------ ------ ------ ------
Operating income (loss) (103.6) (3.2) (74.6) (11.6)
Interest income 0.0 3.4 0.2 3.2
Interest expense (11.7) 0.0 (3.7) (0.1)
------ ------ ------ ------
(11.7) 3.4 (3.5) 3.1
------ ------ ------ ------
Income (loss) from continuing operations (115.3)% 0.2% (78.1)% (8.5)%
====== ====== ====== ======
</TABLE>
THREE MONTHS ENDED DECEMBER 31, 1997 COMPARED TO THREE MONTHS ENDED DECEMBER 31,
1996
Sales for the three months ended December 31, 1997 were $1,442,864, a decrease
of 44.1% as compared to sales for the three months ended December 31, 1996 which
were $2,580,745. This decrease is due to increased competition in the premium
cigar market and shortages of product due primarily to interruption of supply
from Indonesia.
Cost of sales was $1,644,491, or 114.0% of sales for the three months ended
December 31, 1997 as compared to $1,979,643, or 76.7% of sales for the three
months ended December 31, 1996. This increase as a percentage of sales was
primarily a result of increased costs at the Company's Indonesian operation,
discounting of some cigar products, and the decline of premium cigar sales in
the quarter.
Gross (loss) was ($201,627) or (14.0)% of sales for the three months ended
December 31, 1997 as compared to gross profit of $601,102 or 23.3% of sales for
the three months ended December 31, 1996.
Selling expenses, which includes marketing and advertising expenses and freight
costs, were $103,516, or 7.2% of sales for the three months ended December 31,
1997 as compared to $133,403, or 5.2% of sales for the three months ended
December 31,
Page 9 of 13
<PAGE> 10
1996. The percentage increase in selling expenses is primarily attributed to
the decline in sales without a proportionate decrease in selling expenses.
General and administrative expenses, which includes administrative salaries,
professional fees, travel and entertainment, insurance and other expenses, were
$1,188,641, or 82.4% of sales for the three months ended December 31, 1997 as
compared to $548,437, or 21.3% of sales for the three months ended December 31,
1996. The increase is primarily attributable to increases in salaries and wages,
legal and accounting fees, travel, telephone expense, insurance, and a charge
related to the securities litigation currently being brought against the Company
to reflect the retention amount under the Company's Directors and Officers
insurance policy in addition to the decline in sales.
The Company incurred interest expense for the three months ended December 31,
1997 of ($169,134) as compared to interest income of $87,653 for the three
months ended December 31, 1996.
NINE MONTHS ENDED DECEMBER 31, 1997 COMPARED TO NINE MONTHS ENDED DECEMBER 31,
1996
Sales for the nine months ended December 31, 1997 were $5,229,235, an increase
of $372,280, or 7.7% as compared to sales of $4,856,955 for the nine months
ended December 31, 1996.
Cost of sales was $4,254,895, or 81.4% of sales for the nine months ended
December 31, 1997 as compared to $3,915,654, or 80.6% of sales for the nine
months ended December 31, 1996. This increase as a percentage of sales was
primarily a result of increased costs at the Company's Indonesian operation
during the three months ended December 31, 1997, discounting of some cigar
products, and the general decline of premium cigar sales.
The Company wrote-off $743,974 of inventory for the nine months ended December
31, 1997. This was due in part to shrinkage, obsolescence and prior costing
practices.
Gross profit decreased to $230,366 or 4.4% of sales for the nine months ended
December 31, 1997 as compared to a gross profit of $941,301, or 19.4% of sales
for the nine months ended September 30, 1996. The decrease in gross profit
reflects the increase in cost of sales as described above.
Selling expenses, which includes marketing and advertising expenses, freight and
expenses related to the retail operations, were $1,046,772, or 20.0% of sales
for the nine months ended December 31, 1997 as compared to $445,765, or 9.2% of
sales for the nine months ended December 31, 1996. The increase in selling
expenses reflects the increase in marketing and advertising expenses associated
with the building of brand awareness for the Company's premium cigars, an
increase in freight expenses and the decline in recent sales which were not
offset by a proportionate decrease in selling expenses.
General and administrative expenses, which includes administrative salaries,
professional fees, travel and entertainment, insurance and other expenses, were
$3,082,900, or 59.0% of sales for the nine months ended December 31, 1997 as
compared to $1,058,448, or 21.8% of sales for the nine months ended December 31,
1996. The increase is primarily attributable to increases in salaries and wages,
legal and accounting fees, bad debt expense, travel, telephone expense,
insurance, a charge for the closure of the Miami cigar factory and a charge
related to the securities litigation currently being brought against the Company
to reflect the retention amount under the Company's Directors and Officers
insurance policy.
Page 10 of 13
<PAGE> 11
The Company incurred net interest expense for the nine months ended December 31,
1997 of ($181,548) as compared to interest income of $151,277 for the nine
months ended December 31, 1996.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1997 the Company had working capital of $3,444,088. The
Company's current ratio as of December 31, 1997 was approximately 1.7 to 1 as
compared to approximately 6.7 to 1 at March 31, 1997. The decrease in the
Company's current ratio is primarily attributable to the $2,800,000 decrease in
cash and cash equivalents, an increase in short-term borrowings of approximately
$2,250,000 and an increase in accruals of approximately $1,000,000. At December
31, 1997, the Company had cash of approximately $98,342.
As of July 1997, the Company ceased production of cigars in its Miami facility
and transferred the entire production of its products to its facilities in the
Dominican Republic and Indonesia. The Company moved into a new 32,000 square
foot distribution facility in Miami in September 1997 and committed
approximately $400,000 towards the costs of this facility.
On August 28, 1997, the Company entered into a credit facility with Finova
Capital Corporation. Under the terms of the Finova Credit Facility, the Company
can borrow up to a maximum of $3,000,000, subject to limitations based upon
eligible accounts receivable and inventory. The Finova Credit Facility expires
in two years and bears interest at prime plus 2.5% per annum. As of December 31,
1997, the Company had borrowed approximately $1,750,000 under the facility.
In December 1997, the Company borrowed $455,000 under a series of 9%
subordinated promissory notes due 60 days from the date of funding. In
connection with the borrowing, the Company agreed to issue shares of common
stock in an amount based upon the length of time the loans remain outstanding.
In January 1998, approximately 220,000 pounds of the tobacco located in the
Company's Jaibon, Dominican Republic processing facility was damaged due to a
flood. The loss was covered by insurance and on February 11, 1998, the Company
agreed to settle the claim with the insurance company for approximately
$1,500,000. The remaining filler tobacco is sufficient to enable the Company to
manufacture cigars for the fiscal year ended March 31, 1999.
Due to the limitations on the amount the Company can borrow under the Finova
Credit Facility and the need for additional funding, the Company is pursuing
additional funding to help cover the costs of completing some of its projects
and providing additional working capital. The failure to obtain such funding
could have a material adverse effect upon the Company's liquidity.
Statements in this Form 10-QSB that are not descriptions of historical facts may
be forward looking statements that are subject to risks and uncertainties.
Actual results could differ materially from those currently anticipated due to a
number of factors.
Page 11 of 13
<PAGE> 12
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company, its president and former chief financial officer have been
named defendants in six class action complaints filed in the United States
District Court for the Southern District of Florida. The complaints allege
violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Securities and Exchange Commission Rule 10b-5. The Company expects that the
separate litigation will be consolidated into a single action. The litigation is
in a preliminary stage and the Company expects to assert all available defenses.
Due to the preliminary stage of these matters, the Company has not determined
whether it has any liability exposure, although it has recorded a $200,000
reserve for defense costs.
ITEM 2. CHANGES IN SECURITIES
The Company issued 563 shares of its common stock par value 0.001 in
exchange for services rendered.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
The Company did not file a report on Form 8-K during the
quarter ended December 31, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: February 17, 1998
CARIBBEAN CIGAR COMPANY
/S/ EDWARD C. WILLIAMS
-----------------------
Edward C. Williams
Chief Financial Officer
Page 12 of 13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 99,342
<SECURITIES> 0
<RECEIVABLES> 886,173
<ALLOWANCES> 109,565
<INVENTORY> 5,705,961
<CURRENT-ASSETS> 8,674,284
<PP&E> 1,820,452
<DEPRECIATION> 465,260
<TOTAL-ASSETS> 11,532,499
<CURRENT-LIABILITIES> 5,230,196
<BONDS> 0
0
0
<COMMON> 5,130
<OTHER-SE> 6,302,303
<TOTAL-LIABILITY-AND-EQUITY> 11,532,499
<SALES> 5,229,235
<TOTAL-REVENUES> 5,229,235
<CGS> 4,998,869
<TOTAL-COSTS> 4,129,672
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (181,548)
<INCOME-PRETAX> (4,080,854)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,080,854)
<DISCONTINUED> (339,778)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,080,854)
<EPS-PRIMARY> (0.86)
<EPS-DILUTED> (0.86)
</TABLE>
