<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to ___________
For the quarterly period ended ________________________
Commission file number: 333-29295
RETROSPETTIVA, INC.
(Exact name of small business issuer as specified in its charter)
California 95-4298051
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8825 West Olympic Boulevard
Beverly Hills, CA 90211
(Address of principal executive offices)
(310) 657-1745
(Issuer's telephone number)
Check whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes [ X ]
No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: Common Stock, No Par Value, 2,900,000
shares as October 15, 1998
Transitional Small Business Disclosure Format: Yes [ ] No [ X ]
<PAGE>
Item 1.
RETROSPETTIVA, INC.
BALANCE SHEETS
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1998 1997
----------------------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 1,376,973 $ 1,569,905
Accounts receivable, net, pledged 3,348,779 2,958,770
Due from factor 1,035,316 -
Note receivable 99,809 115,210
Note receivable, stockholder 377,999 288,496
Inventories, pledged 6,928,911 6,389,896
Advances to vendor 350,000 -
Insurance receivable 6,708 -
Accrued interest receivable, stockholder 57,088 21,042
Prepaid expense 19,367 -
Other 14,301 79,999
----------------------------
Total Current Assets 13,615,251 11,423,318
PROPERTY AND EQUIPMENT, at cost, net 630,996 183,293
DEFERRED TAX ASSETS 34,000 34,000
OTHER ASSETS - 4,610
----------------------------
$ 14,280,247 $ 11,645,221
----------------------------
----------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable, trade $ 2,937,266 $ 2,881,620
Line of credit 1,348,242 95,610
Note payable 26,580 131,124
Accrued expenses 27,042 66,140
Accounts payable, license fee 34,668
Accrued income taxes 271,260 160,966
Customer advances 250,000 137,385
----------------------------
Total Current Liabilities 4,895,058 3,472,845
----------------------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock - authorized 1,000,000 shares - none issued or outstanding
Common stock - authorized 15,000,000 shares, no par value; issued and
outstanding 2,900,000 and 2,900,000 shares, respectively 6,258,190 6,258,190
Additional paid-in capital 230,000 230,000
Retained earnings 2,896,999 1,684,186
----------------------------
Total Stockholders Equity 9,385,189 8,172,376
----------------------------
$ 14,280,247 $ 11,645,221
----------------------------
----------------------------
</TABLE>
<PAGE>
RETROSPETTIVA, INC.
STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1998 1997 1998
--------------------------------------------------------
<S> <C> <C> <C> <C>
SALES $ 5,105,601 $ 9,941,330 $13,026,900 $24,719,323
-
COST OF SALES 4,366,641 9,155,393 11,124,972 21,291,989
--------------------------------------------------------
GROSS PROFIT 738,960 785,937 1,901,928 3,427,334
OPERATING EXPENSES
Selling expenses 78,167 208,615 172,735 416,499
General and administrative 206,011 312,411 424,952 1,070,177
--------------------------------------------------------
Total Operating Expenses 284,178 521,026 597,687 1,486,676
--------------------------------------------------------
INCOME FROM OPERATIONS 454,782 264,911 1,304,241 1,940,658
OTHER INCOME (EXPENSES)
Interest income 3,677 36,539 8,154 102,317
Interest expense (26,717) (32,246) (50,501) (70,162)
--------------------------------------------------------
Net Other Income (Expenses) (23,040) 4,293 (42,347) 32,155
--------------------------------------------------------
INCOME BEFORE INCOME TAXES 431,742 269,204 1,261,894 1,972,813
PROVISION FOR INCOME TAXES 174,001 250,000 506,871 760,000
--------------------------------------------------------
NET INCOME $ 257,741 $ 19,204 $ 755,023 $ 1,212,813
--------------------------------------------------------
--------------------------------------------------------
NET INCOME PER SHARE, BASIC $ 0.14 $ 0.01 $ 0.43 $ 0.42
--------------------------------------------------------
--------------------------------------------------------
WEIGHTED AVERAGE NUMBERS OF SHARES
OUTSTANDING, BASIC 1,826,087 2,900,000 1,775,641 2,900,000
--------------------------------------------------------
--------------------------------------------------------
NET INCOME PER SHARE, DILUTED $ 0.13 $ 0.01 $ 0.42 $ 0.38
--------------------------------------------------------
--------------------------------------------------------
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING, DILUTED 1,917,314 3,141,359 1,806,112 3,174,317
--------------------------------------------------------
--------------------------------------------------------
</TABLE>
<PAGE>
RETROSPETTIVA, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
1997 1998
-------------------------------
CASH FLOWS FROM (TO) OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 394,638 $ 1,212,813
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation and amortization 8,581 52,580
Stock issued for compensation 34,000
Deferred income taxes 23,000
Stock issued for loan 100,000
Changes in: - -
Accounts receivable (197,507) (332,351)
Due from factor - (1,027,947)
Prepaid license fees - 30,333
Accounts receivable Mfg. Agent - 103,330
Accounts receivable Partnership - (160,989)
Prepaid expenses - 5,024
Insurance receivable - (6,708)
Accrued interest receivable, shareholder - (36,046)
Advances to vendor - (350,000)
Inventories 846,888 (539,015)
Other - (9,691)
Accounts payable and accrued expenses (1,481,727) 16,546
Accrued income taxes 216,982 110,294
License fee payable 34,668
Customer advances 200,000 112,615
-------------------------------
Cash flows provided (used) by operating
activities 144,855 (784,544)
-------------------------------
CASH FLOWS FROM (TO) INVESTING ACTIVITIES:
Note receivable 0 40,675
Purchase of fixed assets (4,836) (500,279)
-------------------------------
Cash flows provided (used) by investing
activities (4,836) (459,604)
-------------------------------
CASH FLOWS FROM (TO) FINANCING ACTIVITIES:
Loans to stockholder - (89,503)
Proceeds from note payable, stockholder 149,319
Payments on note payable, stockholder (245,141)
Proceeds from notes payable, bridge loans 250,000
Proceeds from line of credit - (95,610)
Payments on line of credit 1,348,242
Due to factor - (7,369)
Payments on note payable (9,725) (104,544)
Payments for deferred offering costs (101,186) -
-------------------------------
Cash flows provided (used) by financing
activities 43,267 1,051,216
-------------------------------
NET INCREASE (DECREASE) IN CASH 183,286 (192,932)
CASH IN BANK, beginning of period 38,297 1,569,905
-------------------------------
CASH IN BANK, end of period $ 221,583 $ 1,376,973
-------------------------------
-------------------------------
</TABLE>
<PAGE>
RETROSPETTIVA, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and in accordance with the instructions for Form 10-QSB. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
In the opinion of management, the financial statements contain all material
adjustments, consisting only of normal recurring adjustments necessary to
present fairly the financial condition, results of operations, and cash flows of
the Company for the interim periods presented.
The results for the three and nine months ended September 30, 1998 are not
necessarily indicative of the results of operations for the full year. These
financial statements and related footnotes should be read in conjunction with
the financial statements and footnotes thereto included in the Company's Form
10-KSB filed with the Securities and Exchange Commission for the year ended
December 31, 1997.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
The Company contracts for the manufacture of a variety of garments, primarily
basic women's sportswear which includes suits, skirts, blouses, blazers, pants,
shorts, vests and dresses, using assorted fabrics including rayons, linens,
cotton and wool. The Company arranges for the manufacture of garments for
customers under private labels selected by its customers. It markets its
products exclusively in the United States directly to large wholesalers,
directly and indirectly to national retailers and buying organizations and
directly to women's chain clothing stores and catalogues.
Substantially all of the Company's garments are sold on a "package" basis
pursuant to which the Company markets at fixed prices finished garments to the
customer's specifications and quantity requirements, arranges for the production
of the garments and delivers the garments directly to the customer at the port
of entry. In its marketing, the Company emphasizes these package arrangements
and what it believes to be the better quality and lower prices of garments
produced by skilled Macedonian workers as compared to lower paid workers in
certain other regions.
As a package provider, the Company sources and purchases fabrics and trims,
arranges for cutting and sewing, and coordinates any other services required to
provide a completed garment. Since the Company manufactures its finished
products only upon receipt of purchase orders from its wholesale and retail
customers, it therefore does not maintain an inventory of finished products. The
Company believes that in this way it minimizes the marketing and fashion risk
generally associated with the apparel industry.
Fabrics and trims are purchased from suppliers in China, India, Russia, Romania,
Italy and the United States. After dying the fabric, if necessary, the fabric
and trim are shipped to factories selected by the Company (primarily located in
Macedonia) where they are manufactured into completed garments under the
Company's management and quality control guidance. The finished products are
then shipped directly to New York City where the Company's customers claim the
goods either at the port in New York City or at a consolidating warehouse in
Astoria, New York.
<PAGE>
Except for historical information contained herein, the matters set forth may
include forward-looking statements that are subject to risks and uncertainty
that may cause actual results to differ materially. Such forward-looking
statements that may be contained in this document could include in particular
statements concerning business back-logs, operating efficiencies and capacities,
capital spending, and other expenses.
Among other factors that could cause actual results to differ materially are the
following; dependence upon unaffiliated manufacturers and fabric suppliers,
dependence on certain customers, foreign operations, competition, risks
associated with significant growth, uncertainties in apparel industry, general
economic conditions, seasonality, political instability, concentration of
accounts receivable and possible fluctuations in operating results
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, the percentage
relationship to net revenues of certain items in the Company's statements;
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1998 1997 1998
-----------------------------------------------------
<S> <C> <C> <C> <C>
Revenues 100.0% 100.0% 100.0% 100.0%
Cost of goods sold 85.5% 92.1% 85.4% 86.1%
Gross profit 14.5% 7.9% 14.6% 13.9%
Selling, General and Administrative 5.6% 5.5% 4.6% 6.0%
Operating income 8.9% 2.4% 10.0% 7.9%
</TABLE>
NINE MONTHS ENDED SEPTEMBER 30, 1998 ("1998") COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1997 ("1997")
SALES
Sales for 1998 were $24,719,323 which represented an increase of $11,692,423 or
89.8% over 1997 net sales of $13,026,900. The growth in sales was primarily
attributable to increased purchases by existing customers and from new
customers. The Company currently has fifty (50) customers up from six (6) at
the year ended December 31, 1997. Four customers represented 70% of the
Companys accounts receivable (22%, 22%, 13% and 13% respectively). The Company
continues to add new customers and believes that going forward those
concentrations will continue to decrease.
Generally, the Company receives relatively small initial orders from new
customers. As the relationship with the customer continues, the purchase orders
often increase substantially. Net sales increases during the period reflected
these increased customer orders. The Company expects sales to increase in the
future near-term quarters, but believes that those increases in sales will not
necessarily be at the same rate as the Company has been experiencing
historically either in terms of percentage or dollar increases.
During the period sales were adversely impacted by customer-initiated discounts
due to the unseasonably hot weather in New York (weather in excess of 100
degrees). This is during the season when the weather is historically much cooler
and when wool suits, blazers and pants are traditionally sold,. Warm
weather impacted the demand and the Company's customers had to offer deep
discounts in order to move their wool garments. Those customers in turn asked
those discounts be passed on to the Company.
The Company of course can not predict the extent to which the unseasonably warm
weather might continue or that the weather experienced in New York this year
represents a long-term
<PAGE>
change in weather patterns in that region. The Company continues to evaluate
the situation with the intent of developing strategies to mitigate any impact
those changes might have on the Company.
COST OF GOODS SOLD
Cost of goods sold in 1998 was $21,291,989 or 86.1% of sales, an increase of
$10,167,017 from $11,124,972 or 85.4% of sales in 1997. The increase in cost of
goods sold was primarily attributable to increases in costs related to
technicians, freight, inspection, merchandise repairs, customs duties and sample
expenses.
One of the Companys customers has instituted new quality control procedures.
The customer now independently checks all of its suppliers finished goods for
compliance with the specifications on its original purchase orders. Their
quality control procedures result in costs spread over three different areas,
inspection, quality control and merchandise repair costs. The customer is now
passing those costs arising from those new procedures along to its suppliers and
as a result this is impacting the costs associated with the production of goods
for that customer.
The Company believes that there is an industry-wide shift to higher levels of
quality control and the implementation of more detailed levels of regular and
more thorough quality control checking procedures. The Company can not predict
at this time to what extent the costs related to any change in customers quality
control checking procedures, should they arise, might impact the Companys costs
of production for those customers.
As is usual and customary when using a new factory, there is always a learning
curve process which results in some impact on quality control. Those problems
that occur during this process give rise to costs associated with the cost to
correct those problems. The Company expects costs of quality control learning
curve issues to arise whenever it enters a new factory. Accordingly, costs
associated with new factories at the beginning of the production relationship
normally result in merchandise repair costs to correct the early procedural
learning process that results in some garments produced outside of
specifications.
During the period the Company recorded what it believes to be non-recurring
charges. These charges are directly related to the changing demand resulting
from the devaluation of the dollar, material changes in weather patterns on the
east coast and orders received later in the season than historically that
impacted the period. As a result, the Company had to hire additional
technicians at significant increased cost to manage the shifts required in
production to, among other things, decrease the turnaround time. As a result of
tight production and delivery schedules, the Company also had to utilize less
cost-effective means of finished good transport relying more heavily on air
freight forwarders compared to the preferred and normal mode of transportation,
namely by ship.
The Company is currently working to manage the costs in all of the
above-mentioned areas, technicians, air freight and order and production timing.
The Company believes that the cost-cutting and working on improving efficiencies
in these areas could result in some related charges through the next quarter or
possibly two quarters. It believes any negative impact on the Company's
financial performance could be offset by its continually increasing customer
base and top-line sales growth.
GROSS PROFIT
Gross profit was $3,427,334 for 1998, an increase of $1,525,406 from $1,901,928
for 1997. The gross profit percentage was 13.9% in 1998, a decrease of 0.7%
from 14.6% in 1997. The reasons for the decrease of the gross profit in the
third quarter are explained in detail in the section above. The Company
believes, notwithstanding the issues mentioned above that the deterioration of
the gross profit, again, could possibly be offset by its penetration of the
retail
<PAGE>
distribution channel where profit margins are traditionally higher than in the
wholesale distribution channel. The wholesale distribution channel is where the
Company currently conducts a substantial portion of its business. There can,
however, be no guaranty that any decrease in the Companys profit margin will be
offset by increases in the margins of goods sold to customers in the retail
distribution channel.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative ("SG&A") expenses were $1,486,676 or 6.0% of
sales for 1998, an increase of $888,989 from $597,687 or 4.6% of sales for 1997.
The increase in G&A expense levels was primarily attributable to increases in
commission, salaries, professional fees, insurance, bank charges, rent,
printing, promotion and marketing, depreciation, dues and subscriptions and
factor charges.
INTEREST EXPENSE
Interest expense for 1998 was $70,162 compared to $50,501 for 1997. The
increase in interest was primarily attributable to the increase in the
utilization of lines of credit.
PROVISION FOR INCOME TAXES
The provision for income taxes was $760,000 and $506,871 for 1998 and 1997,
respectively. The increase in the provision for income taxes for the 1998 was
primarily attributable to increased earnings.
LIQUIDITY
The Company has 575,000 warrants outstanding with an exercise price of $7.50 per
warrant expiring September 23, 2002. The Company has 50,000 underwriter
warrants outstanding with an exercise price of $14.40 per unit. Each unit
consists of two shares of the Company's common stock and one warrant as
described above. The Company does not know whether the warrants will be
exercised in 1998. Without exercise of those warrants, the Company may need to
limit its growth in order to more efficiently manage its available funds and
funds generated by operations.
It is the Company's intention, however, to utilize more fully and possibly
increase its existing line of credit with a major lending institution and its
credit facility arrangement with a New York factoring company. These measures
are required due to the significant cash requirements related to increases in
revenues.
The Company does not expect its historical rate of increase in sales growth to
continue and further expects its rate of growth to be lower in the future as it
begins to reach its full operating capacity constraints and utilization of its
existing capital resources. In the event the Company is able to obtain
additional equity capital through the exercise, if any, of its outstanding
warrants or other increases in potential working capital as mentioned above,
however, the Company believes that this new working capital may allow it to grow
more quickly.
CAPITAL RESOURCES
Since its formation, the Company has financed its operations and met its capital
requirements primarily in its initial stages of growth through cash flows from
operations and within the last two years more from customer advances, from
principals, credit facilities, bridge loans, a private placement and its IPO,
although the Company of course continues to generate cash flow in its normal
course of business. Due to the Companys high rate of growth, however, it has
been unable to internally generate sufficient working capital to finance that
growth and as a result has had to more recently rely on other sources of
capital. These sources of capital again, consist of
<PAGE>
credit facilities, favorable terms from suppliers and customer advances which
have aided the Company in supplying the cash required to supplement the normal
cash flow from operations.
The initial use of IPO funds was to repay certain debt and to purchase raw
materials, for working capital and the eventual purchase of wool manufacturing
equipment. The Company's primary need for cash is for working capital purposes.
The Company may raise capital through the issuance of long-term or short-term
debt, or the issuance of securities in private or public transactions to fund
future expansion of its business. There can be no assurance that acceptable
financing for future transactions can be obtained.
INFLATION
As a direct result of deteriorating global financial markets, the Company
expects the U.S. dollar to be adversely impacted over the short-term. All of
the Company's transactions worldwide are conducted on a dollar-denominated basis
which was intended to mitigate the possible impact of volatile currencies that
may have arisen as a result of global corporations crowding emerging markets in
search of growth. What has occurred more recently is that the dollar has
weakened due to the financial crises in Asia and Russia.
The Company can not predict at this time the extent to which the continuing
global financial crises will impact the Company, in either a minimally or
materially adverse way. It is clear, however, that the Companys cost of goods
could be adversely impacted in an economic environment where the weakening of
the U.S. dollar would require the Company to spend more dollars to purchase
goods now, compared to similar purchases that required correspondingly fewer
dollars historically.
SEASONALITY
The Company's revenues and operating results have exhibited some degree of
seasonality in past periods. Typically, the Company experiences its highest
sales in the first and fourth quarters and its lowest sales in the second and
third quarters. Due to the recent overall global and economic market
conditions, it is possible that there could be some variability going forward
compared to the historical seasonality of the Company, however, the Company
believes that its higher sales quarters will continue to be the first and fourth
quarters.
YEAR 2000 ISSUES
Many computer systems in use today were designed and developed using two digits,
rather than four, to specify the year. As a result, such systems will recognize
the year 2000 as "00". This could cause many computer applications to fail
completely or to create erroneous results unless corrective measures are taken.
The Company currently uses software and related computer technologies essential
to its operations that the Company believes will not be affected by the year
2000 issue.
The Company, however, can not determine the extent to which its vendors and
customers may or may not be affected by the year 2000 issue. The Company
intends over the next 2 years to establish relationships with customers that may
require the use of EDI (electronic data interchange) whereby all invoicing and
payments will take place electronically over the internet through computers.
The Company believes that since these prospective customers already utilize EDI,
that they either have in place now, or will have successfully taken whatever
steps are necessary to solve the year 2000 issue. The Company can not currently
assess the extent to which vendors and customers inability to become year 2000
compliant might impact the Company.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
CHANGES IN SECURITIES
Not applicable
USE OF PROCEEDS
<TABLE>
<CAPTION>
USE OF PROCEEDS % of proceeds Sub-Totals Totals
------------- ---------- ------
<S> <C> <C> <C>
GROSS PROCEEDS $6,900,000
Less: Underwriters discounts, commissions 10.0% 690,000
Finders' fees -
Underwriters expenses 3.0% 207,000
Payments to directors and officers 0.7% 49,376
-----------------------------
Total expenses 13.7% 946,376
----------
Net proceeds 5,953,624
USE OF PROCEEDS
Construction of plan, building and -
facilities
Purchase and installation of 4.7% 280,000
machinery and equipment
Purchases of real estate -
Acquisition of other business(es) -
Repayment of indebtedness 9.7% 578,532
Working capital 15.2% 903,104
Temporary investments -
Purchases of raw materials 70.4% 4,191,988
-----------------------------
Total use of proceeds 100.0% 5,953,624
----------
REMAINING PROCEEDS $ 0
----------
</TABLE>
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
ITEM 5. OTHER INFORMATION
Not applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Not applicable
<PAGE>
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 thereto duly authorized.
Date: October 15, 1998 RETROSPETTIVA, INC.
-----------------------
(Registrant)
/s/ Michael D. Silberman
--------------------------
Michael D. Silberman
Chief Financial Officer
(Principal Accounting Officer)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
RETROSPETTIVA'S 10-QSB FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JUL-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 1,376,973
<SECURITIES> 0
<RECEIVABLES> 3,972,212
<ALLOWANCES> 155,897
<INVENTORY> 6,928,911
<CURRENT-ASSETS> 13,570,493
<PP&E> 749,979
<DEPRECIATION> 118,984
<TOTAL-ASSETS> 14,272,877
<CURRENT-LIABILITIES> 4,887,688
<BONDS> 0
0
0
<COMMON> 6,258,190
<OTHER-SE> 3,196,999
<TOTAL-LIABILITY-AND-EQUITY> 14,272,877
<SALES> 9,941,330
<TOTAL-REVENUES> 9,941,330
<CGS> 9,155,393
<TOTAL-COSTS> 9,676,418
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 32,131
<INCOME-PRETAX> 269,204
<INCOME-TAX> 250,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,204
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
