UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE
ACT OF 1934
FOR THE PERIOD ENDED MARCH 31, 2000
OR
[] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT HAVE 1934
FOR THE TRANSITION PERIOD FROM _____________________ TO ______________________
COMMISSION FILE NUMBER: 000-24269
THE HAVANA GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 34-1454529
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYEROR ORGANIZATION
OF INCORPORATION IDENTIFICATION NO.)
5701 MAYFAIR ROAD, NORTH CANTON, OHIO 44720
(ADDRESS OF PRINCIPLE EXECUTIVE OFFICES) (ZIP CODE)
(330) 492-8090
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Securities Exchange Act of 1934 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 [ ]
As of May 15, 2000, there were 2,345,000 shares of the Registrant's Common
Stock $.001 par value issued and outstanding.
Transitional Small Business Disclosure Format.
Yes [ ] No [X]
<PAGE>
INDEX
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Consolidated Balance Sheets at March 31, 2000 (Unaudited) and December 31, 1999.........................................3
Consolidated Statements of Operations - Three Months Ended March 31, 2000 and March 31, 1999 (Unaudited)................5
Consolidated Statements of Cash Flows - Three Months Ended March 31, 2000 and March 31, 1999 (Unaudited)................6
Notes to Financial Statements...........................................................................................7
Item 2 - Management's Discussion and Analysis or Plan of Operation......................................................10
Part II - Other Information.............................................................................................13
Signature Page..........................................................................................................14
</TABLE>
2
<PAGE>
THE HAVANA GROUP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(UNAUDITED)
<TABLE>
<CAPTION>
March 31 December 31,
2000 1999
ASSETS
CURRENT ASSETS:
<S> <C> <C>
Cash ......................................... $ 952,069 $1,058,390
Accounts receivable .......................... 110,135 56,460
Inventories .................................. 680,462 706,070
Due from affiliates - 143,753
Deferred catalog expense ..................... 74,873 57,357
Prepaid expenses ............................. 14,423 23,171
Total Current Assets ................... 1,831,962 2,045,201
DEFERRED FEDERAL INCOME TAX ...................... 29,070 29,070
PROPERTY & EQUIPMENT:
Leasehold Improvements ....................... 104,684 92,244
Machinery and equipment ...................... 40,192 10,981
Data Processing equipment .................... 60,362 52,343
Web Site Development ......................... 109,374 110,849
Furniture and fixtures ....................... 20,403 20,571
335,015 286,988
Less accumulated depreciation ................ 59,174 51,394
275,841 235,594
OTHER ASSETS, net of accumulated amortization
Customer lists ............................... 377,666 387,067
Catalog and product development............... 92,938 92,518
Deposits and other......................... 11,217 9,654
Total Other Assets 481,821 489,239
TOTAL ASSESTS 2,618,694 $2,799,104
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
THE HAVANA GROUP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
<S> <C> <C>
Accounts payable ........................................................... 91,934 $ 276,734
Accrued expenses... ........................................................ 9,125 10,062
Due to affiliates .......................................................... - 290,054
Customer advances and other ................................................ 5,113 7,679
Total Current Liabilities ............................................. 106,172 584,529
STOCKHOLDERS' EQUITY:
Preferred stock Series A.................................................... 5,000 5,000
Preferred stock Series B.................................................... 1,100 1,100
Common stock ............................................................... 2,345 1,860
Additional paid -in capital ................................................ 6,842,893 6,501,322
Retained earnings (deficit) ................................................ (4,338,816) (4,294,707)
Total Stockholders' Equity ............................................ 2,512,522 2,214,575
TOTAL LIABILITIES & EQUITY $ 2,618,694 $ 2,799,104
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
The Havana Group, Inc. and Subsidiary
Consolidated Statements of Operations
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended March 31
2000 1999
<S> <C> <C>
Net Sales ......................... $ 449,450 $ 261,764
Cost of Sales ..................... 241,332 189,077
Gross Profit ...................... 208,118 72,687
Selling Expenses .................. 119,411 81,780
General and Administrative Expenses 145,464 78,733
Loss From Operations .............. (56,757) (87,826)
Interest Income ................... 12,648 16,371
Net Loss .......................... ($ 44,109) ($ 71,455)
=========== ===========
Basic and Diluted Loss Per Share .. ($ 0.02) ($ 0.04)
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
The Havana Group, Inc. and Subsidiary
Consolidated Statements of Cash Flows
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended March 31,
2000 1999
Cash Flows From Operating Activities:
<S> <C> <C>
Net loss ................................................................. ($ 44,109) ($71,455)
Adjustments to reconcile net loss to net cash (used) by operating activities
Depreciation and amortization ........................................ 20,246 14,266
(Increase) decrease in accounts receivable ........................... (53,675) 2,958
Decrease(increase) in inventories .................................... 25,608 (54,942)
(Increase) in deferred catalog expense ............................... (17,516) (4,251)
Decrease (increase) decrease in prepaid expenses ..................... 8,748 (4,950)
(Increase) in deposits and other ................................... (1,563) -
(Decrease) increase in accounts payable, customer advances
and accrued expenses................................................ (188,303) 26,194
Net cash (used) by operating activities ...................................... (250,565) (92,180)
Cash Flows From Investing Activities:
Purchase of property and equipment ....................................... (48,026) (58,087)
Investment in catalog and product development ............................ (3,485) -
Net cash (used) by investing activities....................................... (51,511) (58,087)
Cash Flows From Financing Activities:
Change in due to/from affiliates ......................................... (146,301) (160,531)
Sale of Common Stock...................................................... 342,056 -
Net cash provided(used) by financing activities .............................. 195,755 (160,531)
Net (Decrease) in Cash ....................................................... (106,321) (310,798)
Cash - Beginning ............................................................. 1,058,390 1,634,276
Cash - Ending ................................................................ $ 952,069 $ 1,323,478
=========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements
6
<PAGE>
THE HAVANA GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Business Description and Principles of Consolidation
The Havana Group, Inc. (Havana) is in the mail order and Internet business
and sells to customers throughout the United States. The Company sells tobacco,
cigars, smoking pipes and accessories. Products are purchased from a variety of
manufacturers. The consolidated financial statements include the accounts of The
Havana Group, Inc., and its wholly owned subsidiary, Monarch Pipe Company
(collectively, "the Company"). Monarch manufactures smoking pipes and sells them
exclusively to Havana. All significant inter-company accounts and transactions
have been eliminated in consolidation
Note 2. Basis of Presentation
A. The accompanying unaudited financial statements have been prepared by
the Company. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. In the opinion of the Company's
management, the disclosures made are adequate to make the information presented
not misleading, and the consolidated financial statements contain all
adjustments necessary to present fairly the financial position as of March 31,
2000, the results of operations for the three month periods ended March 31,
2000, and March 31, 1999 and cash flows for the three month periods ended March
31, 2000 and March 31, 1999. The results of operations for the three month
period is not necessarily indicative of the results to be expected for the full
year.
Per Share Amounts - The number of shares outstanding in computing basic and
diluted earnings per share for the three-month periods ended March 31, 2000 and
1999 was 2,345,000 and 1,860,000 respectively.
B. Recently Issued Accounting Pronouncements
In June 1999, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 137, "Accounting for
Derivative Instruments and Hedging Activities - Deferral of the Effective Date
of FASB Statement No. 133 - an amendment of FASB Statement No. 133," which
postponed the effective date of SFAS No. 133, "Accounting for Derivative
Financial Instruments and Hedging Activities," to all fiscal years beginning
after June 15, 2000. The Company does not anticipate having these types of
hedges, and the effect of adoption is expected to be immaterial.
The Accounting Standards Executive Committee issued Statement of Position
(SOP) 98-1, "Accounting for the Costs of Computer Software Developed or Obtained
for Internal Use," and SOP 98-5, "Reporting on the Costs of Start-Up
Activities," which are effective for years beginning after Dec. 31, 1998. The
Company's adoption of SOP 98-1 and SOP 98-5 had no material effect on its
results of operations or financial position.
In December 1999, the Securities and Exchange Commission issued SAB101,
"Revenue Recognition in Financial Statements" SAB101 provides guidance on
applying generally accepted accounting principles to revenue recognition issues
in financial statements. This statement is effective in the second quarter of
2000. The Company is evaluating the effect the adoption may have on the
Company's consolidated results of operations and financial position.
Note 3. Agreement with Affiliated Company
Effective January 1, 1997, the Company contracted with Kids Stuff, Inc.
("Kids"), a subsidiary of Duncan Hill, Inc., to provide telemarketing, order
fulfillment, data processing and certain administrative functions. The Company
is charged for its portion of the expenses on a direct cost basis, as
applicable, or on a pro rata basis. Actual costs are those direct costs that can
be charged on a per order or per hour basis, fixed costs are allocated on a pro
rata basis by dividing the total assets of the Company by the sum of the total
assets of the Company and Kids.
7
<PAGE>
At January 1, 1999 the agreement was modified and extended on a
month-to-month basis as the Company began to incur direct costs for its
administrative functions. The Company pays to Kids an accounting, data
processing, and administrative charge of $15,000 per year. Additionally, a $1.75
per shipment for warehouse services was paid by Havana until March 8, 2000 when
Havana obtained their own warehousing facility and no longer required Kids Stuff
Inc.'s fulfillment services.
Note 4. Stockholders' Equity
Common Stock
The Havana Group, Inc. has 25,000,000 shares of $.001 par value common
stock authorized. In connection with reorganization, the Company issued
1,000,000 common shares to its parent, Duncan Hill, Inc. The holders of Common
shares are entitled to one vote on all stockholder matters.
The Company is not currently subject to any contractual arrangements, which
restricts its ability to pay cash dividends. The Company's Certificate of
Incorporation prohibits the payment of cash dividends on the Company's Common
Stock in excess of $.05 per share per year so long as any Serial Preferred Stock
remains outstanding unless all accrued and unpaid dividends on Serial Preferred
Stock has been set apart and there are no arrearages with respect to the
redemption of any Serial Preferred Stock.
In Febuary 2000, Mr. Miller purchased 240,000 unregistered shares of the
Company's common stock at a price of $.4044 per share for total proceeds of
approximately $97,000. In March 2000, the Company sold 245,000 unregistered
common shares to seven investors in a private placement for $245,000.
B. Series A Preferred Stock
The Board of Directors has the authority to issue up to 10,000,000 shares
of Preferred Stock in one or more series and to fix all rights, preferences,
privileges, and restrictions. In December 1997, the Company issued, as a
dividend to Duncan Hill, Inc., 5,000,000 shares of Series A Preferred Stock
(Series A) to Duncan Hill, Inc. The Series A holders are entitled to one vote
for each share held on all matters submitted to a vote of the stockholders. The
Series A stock is not subject to redemption and has no conversion rights or
rights to participate in dividend payments. In the event of any voluntary or
involuntary liquidation of the Company, each share of Series A stock has a
liquidation preference of $.001 per share.
C. Series B Preferred Stock
In December 1997, the Company issued 1,100,000 shares of its Series B
Convertible Preferred Stock (Series B) to Duncan Hill. In return, Duncan Hill
assumed a $300,000 liability due to an affiliate. Series B has the same voting
privileges as the Common Stock. Each share of Series B stock is convertible into
one share of the Company's Common Stock at the option of either the holder or
the Company upon reaching net pre-tax earnings of at least $500,000. If declared
by the Board of Directors, Series B shareholders are entitled to receive
quarterly dividends of no more than $.025 per share, payable out of surplus or
net profits of the Company. As of November 10, 1999, the Board of Directors has
not declared any dividends. As the Series B Preferred pays a $.10 dividend per
share, the Company has recorded the Series B stock at $1.00 per share to reflect
its estimated fair value. The Series B stock is not subject to redemption. In
the event of a voluntary or involuntary liquidation of the Company, each share
of Series B stock has a liquidation preference of $.001, which is subordinated
to the liquidation preference of the Series A stock.
D. Class A Warrants
As of March 31, 2000, the Company has 2,858,000 Class A Warrants
outstanding, which is comprised of 920,000 warrants included in the units sold
in the initial public offering (see Note 8); 1,400,000 warrants issued in
connection with the conversion of a note payable (see Note 4E); 138,000 warrants
issued to Duncan Hill in replacement of warrants issued in conjunction with a
reorganization; and 400,000 warrants issued to Mr. William Miller, the Company's
CEO, as described in Note 5, 200,000 of which he currently owns.
8
<PAGE>
Each Class A Warrant entitles the Holder to purchase one share of common
stock at a price of $5.25 and expires May 2003. The Company may redeem the Class
A Warrants at a price of $.10 per warrant, upon not less than 30 days' prior
written notice, if the closing bid price of the common stock has been at least
$10.50 per share for 20 consecutive trading days ending no more than the 15th
day prior to the date on which the notice of redemption is given.
Note 5. Employment Agreement
In December 1997, the Company and its CEO entered into an employment
agreement, which among other terms, granted the CEO 200,000 Common Stock
Purchase Warrants at $6.00 per share. The warrants were converted into Class A
warrants upon the effectiveness of the Company's registration statement. The CEO
was also granted an option to purchase 200,000 shares of the Company's Common
Stock, which will vest 20% on each of the following dates: December 1, 1997;
January 1, 1998; January 1, 1999; January 1, 2000; and January 1, 2001,
regardless of whether the executive is employed on such dates by the Company.
The vested options will be immediately exercisable and will expire 10 years from
the date of the agreement. The exercise price of the options will be $6.00 per
share, subject to downward adjustments in the exercise price if the Company
meets certain performance goals.
At June 30, 1999 the Company and its CEO agreed to modify his employment
agreement. Pursuant to the modification, the CEO received 200,000 Class A
Warrants identical to the Class A Warrants issued to the public in May 1998 in
exchange for his waiver of base salary. The modification agreement will require
the Company to register with the Securities and Exchange Commission the resale
of Mr. Miller's Class A Warrants. See Note 4D for a description of the terms of
the Class A Warrants.
The Company has entered into an employment agreement effective February 1,
1999 through December 31, 2002 with Gary J. Corbett whereby Mr. Corbett will
serve as the Company's President at an annual base salary of $80,000 plus bonus
to be determined by the Board of Directors. He was also granted options to
purchase 80,000 shares of the Company's common stock at an exercise price of
$3.50 per share subject to downward adjustments in the exercise price if the
Company meets certain performance goals. The options vest 25% on March 1, 1999
and 25% on each of the first, second, and third anniversary dates of the
employment agreement.
9
<PAGE>
RECENT DEVELOPMENT
The Company has an agreement in principle to purchase 100% of the
outstanding stock of Phillips & King International, Inc. ("P&K") in
consideration of $1,000,000 in cash, $400,000 in short-term notes and an
estimated 300,000 unregistered shares of the Company's Common Stock with
"piggy-back" registration rights. The number of Shares of Common Stock is
subject to downward adjustment in the event the Company's Common Stock exceeds
$3.00 per Share but not more than $4.00 per Share. The number of Shares of
Common Stock is subject to upward adjustment in the event the Company's Common
Stock is less than $3.00 per Share, but in no event shall the Company's Common
Stock be less than $2.00 per Share. Closing of the transaction is subject to
many conditions including, without limitation, the following:
o The outstanding debt of the reorganized P&K will not exceed
$1.96 million on a net basis.
o P&K's usable inventory will have a value of not less than $1.9
million and accounts receivable will not be less than $950,000.
o Havana must obtain reasonable assurance of current suppliers'
willingness to do business with the reorganized P&K under
Havana's ownership.
o A final Order must be entered confirming P&K's Plan of
Reorganization pursuant to which Mr. & Mrs. John Parker and /
or Mr. & Mrs. Jerold Christensen (collectively the "Sellers")
will acquire 100% of the capital stock of P&K as a reorganized
entity out of Chapter 11 Bankruptcy and will resell the capital
stock to Havana pursuant to the terms described herein.
o Havana completing adequate due diligence satisfactory to Havana
and its auditors.
o Havana will have arranged acceptable financing in order to
complete the transaction.
o John Parker and Jerald Christensen shall enter into
satisfactory employment agreements, which shall include
provisions pertaining to an agreement not to compete.
o Havana's Common Stock shall not be less than $2.00 per Share at
closing.
o Havana will covenant to comply with all SEC informational
requirements under Rule 144(c) in order to permit the
subsequent sale by the sellers under Rule 144.
o The preparation and execution of a definitive purchase
agreement between the Sellers and Havana.
No assurances can be given that the company will enter into a definitive
agreement to acquire P&K or if completed that the transaction would be completed
on terms as described herein.
Description of P&K Business
Phillips & King International, Inc. was organized by Mr. Harry Phillips in
1906. The controlling interests in P&K today are fourth generation descendants
of the founder.
10
<PAGE>
P&K is a wholesale distributor of tobacco products. Their business is to
sell to retail smoke shops, and P&K has approximately 3,000 such accounts. The
method of sale is by direct contact, and P&K employs nine sales representatives
in that regard.
P&K's sales reached a peak of $26.7 million in 1997, reflecting the
popularity of premium cigars. Following the decline in consumption of premium
cigars, P&K's sales dropped 33% in 1998 and 22% in 1999. Sales in 1999 were also
adversely affected by P&K's Chapter 11 Bankruptcy, filed on a voluntary basis on
February 8, 1999.
During the 1997-1998 peak in premium cigars, Cuba Libre Humidors, Inc.
("Cuba Libre") claimed to have received a verbal purchase order for
humidification devices for continuous monthly sale to P&K. This did not happen,
Cuba Libre filed suit and was awarded a judgment of $1.8 million. P&K responded
by filing for protection under Chapter 11 provisions of the bankruptcy code, and
began defensive actions. The purchase of P&K presented herein presumes a
negotiated resolution of the Cuba Libre claim, and corresponding successful
reorganization under Chapter 11 provisions. In this instance, Havana fulfills
the role of "White Knight".
Until its Chapter 11 filing, P&K operated as a Subchapter S Corporation.
While Havana will analyze the owners' benefits as a part of its due diligence
process, it has not done so at present, and has not identified those costs
beneficial to the owners which would not carry forward on a post transactional
basis. The Company has, however, identified "Salaries - Owners", which it
believes should be considered separately from the operation results of P&K.
11
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This discussion should be read in conjunction with the information in the
financial statements of the Company and notes thereto appearing elsewhere.
Overview
The Havana Group, Inc. is a consumer catalog and Internet business
specializing in smoking pipes, tobaccos, cigars and related accessories. We are
the manufacturer and sole distributor of the "Magic Inch" and "Aerosphere"
smoking pipe systems, and the sole distributor of "Carey Honduran" lines of
proprietary hand made cigars. Our products are offered through our Carey's
Smokeshop catalog. Carey Tobacco Club is also offered through the catalog, which
is a monthly program of tobacco shipments to Club members. During December 1997
we opened, and have since been developing, our Havana Group retail store. In
June of 1999, we developed and launched our web site www.smokecheap.com as a new
distribution outlet.
12
<PAGE>
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 1999
Net sales for the quarter ended March 31, 2000 were $449,450, an increase
of $187,686 or 71.7% from the same quarter last year. The increase is due
favorable response to the current selection in the company's Carey Catalog and
the sales of the Company's roll-your-own products.
Cost of sales decreased to 53.7% of net sales in 2000 from 72.2% in 1999
due to favorable margins on roll-your-own products and an increase in Tobacco
Lovers Club memberships.
Selling expenses were 26.6% of sales for the first quarter of 2000 compared
with 31.2% of sales in the first quarter of 1999. The decrease in selling
expense percentage in 2000 resulted from a higher cost effective marketing
program implemented by the Company.
For the first quarter of 2000, general and administrative expenses were
$145,464 or 32.4% of sales, compared to $78,733 or 30.1% of sales during the
same quarter in 1999. The increase of $66,731 was due to increased personnel
costs related to the relocation of the Company to a new warehousing facility and
also to costs associated with the acquisition of Phillips & King.
Losses from operations for the first quarter of 2000 were $44,109, or 9.8%
of sales, as compared to an operating loss of $71,455, or 27.3% of total sales
in 1999. The decrease in loss was due to increased sales and favorable margins
on roll-your-own products in the first quarter of 2000.
13
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES.
At March 31, 2000, our accumulated deficit increased by $44,109 from
December 31, 1999 due to the net loss.
In addition to the net loss, cash was used by operating activities
primarily for paying off of accounts payable of $184,800. Other operating
activity cash uses included an increase in accounts receivable of $53,675 and an
increase in deferred catalog expense, deposits and other of $19,079.
Additionally, customer advances and accrued expense decreased $3,503. Cash uses
were somewhat offset by non-cash charges including depreciation and amortization
of $20,246. Cash from operations was also provided by a decrease in inventory of
$25,608 and a decrease in prepaid expenses of $8,748. Cash was used by investing
activities in the amount of $51,511, primarily as a result of purchases of
property and equipment of $48,026 and investing in catalog and product
development of $3,485. The Company's financing activities consisted of a
decrease in amounts due to affiliates of $146,301, which eliminated this net
liability. Additionally, cash was provided from the sale of common stock of
$342,056.
At March 31, 1999, our accumulated deficit increased ($71,455) from
December 31, 1998 because of the net loss. In addition to the net loss, cash was
used by operating activities primarily to increase inventories. Cash uses were
partially offset by non-cash charges of $14,266 for depreciation and
amortization, and by increases in accounts payable customer advances and other
liabilities in the amount of $26,194. Cash was used by investing activities, as
investments in property and equipment rose by $58,087, reflecting the Company's
investment in its Havana Group site on the world-wide-web. The Company's
believes that its web site is approximately 60% complete, and anticipates the
total cost of its web site will be approximately $100,000. Financing activities
for the quarter consisted of a reduction in amounts due to affiliates, as the
Company paid down its balances due by $160,531 during the quarter.
Currently, the Company has no credit facility. However, the Company expects
to meet cash needs over the next 12 to 15 months through working capital
provided by the recently completed offering and cash from operations.
14
<PAGE>
FORWARD LOOKING STATEMENTS AND ASSOCIATED RISKS
Management's discussion and analysis contains forward-looking statements,
which reflect Management's current views and estimates of future economic
circumstances, industry conditions, company performance and financial results.
These forward-looking statements are based largely on the Company's expectations
and are subject to a number of risks and uncertainties, many of which are beyond
the Company's control. Actual results could differ materially from these forward
looking statements as a result of changes in the trends in the tobacco or cigar
retail and mail order industry, government regulations imposed on the tobacco
industry, competition, availability and price of goods, credit availability,
printers' schedules and availability, and other factors. Any changes in such
assumptions or factors could produce significantly different results.
15
<PAGE>
PART II. OTHER INFORMATION
(a) Exhibits filed as part of this report:
27. Financial Data Schedule
Signature
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
The Havana Group, Inc.
DATE: May 12, 2000 /S/ WILLIAM L. MILLER
William Miller, CEO & CFO
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
EXHIBIT 27.01
FINANCIAL DATA SCHEDULE
ARTICLE 5 OF REGULATION S-X
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS AND RELATED FOOTNOTES THERETO, OF THE HAVANA GROUP, INC.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> dec-31-2000
<PERIOD-END> mar-31-2000
<CASH> 952,069
<SECURITIES> 0
<RECEIVABLES> 115,635
<ALLOWANCES> 5,500
<INVENTORY> 680,462
<CURRENT-ASSETS> 1,831,963
<PP&E> 335,014
<DEPRECIATION> 59,174
<TOTAL-ASSETS> 2,618,694
<CURRENT-LIABILITIES> 106,172
<BONDS> 0
0
6,100
<COMMON> 2,345
<OTHER-SE> 2,504,077
<TOTAL-LIABILITY-AND-EQUITY> 2,618,694
<SALES> 449,450
<TOTAL-REVENUES> 449,450
<CGS> 241,331
<TOTAL-COSTS> 360,742
<OTHER-EXPENSES> 145,464
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (44,109)
<INCOME-TAX> 0
<INCOME-CONTINUING> (44,109)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (44,109)
<EPS-BASIC> (.02)
<EPS-DILUTED> (.02)
</TABLE>
