SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20589
FORM 10-QSB
(Mark One)
X Quarterly report pursuant to section 13 or 15(d) of the
- ----- Securities Exchange Act of 1934 for the quarterly period
ended June 29, 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 0-24828
GRAND HAVANA ENTERPRISES, INC.
FORMERLY KNOWN AS UNITED RESTAURANTS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 95-4428370
- ------------------------------- -------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1990 Westwood Boulevard, Los Angeles, California 90025
--------------------------------------------------------
(Address of Principle Executive Offices)
(Zip Code)
(310) 475-5600
-----------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Check whether the Issuer (1) filed all reports to be filed by Section 13 or
15(d) 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 at least the past 90 days.
YES X NO
--- ----
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date.
Class Outstanding at August 1, 1997
- ------------------------- -------------------------------
Common Stock, par value 8,469,933 shares
$.01 per share
Transitional Small Business Disclosure Format (check one):
YES NO X
----- ------
1
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. Financial Statements
<TABLE>
<CAPTION>
GRAND HAVANA ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
<S> <C> <C>
June 29, September 30,
1997 1996
------------------ -----------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 227,529 $ 1,010,062
Accounts receivable, less allowance for
doubtful accounts of $54,036 and
$15,500 (June 29, 1997 and
September 30, 1996) 469,967 125,402
Short Term note receivable 59,719 -
Equipment contract receivable - 330,000
Inventories 735,736 210,054
Prepaid expenses and other assets 7,268 145,187
Net assets discontinued business, held for sale 359,924 -
------------- -------------
TOTAL CURRENT ASSETS 1,860,143 1,820,705
PROPERTY AND EQUIPMENT, NET 5,353,656 2,124,346
OTHER ASSETS
Pre-opening costs - 132,723
Due from related parties - 69,419
Deferred financing cost 92,025 80,000
Deposits and other 452,679 131,389
------------ ------------
TOTAL OTHER ASSETS 544,704 413,531
------------ ------------
$ 7,758,503 $ 4,358,582
============ ============
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements
2
<PAGE>
<TABLE>
<CAPTION>
GRAND HAVANA ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
<S> <C> <C>
June 29, September 30,
1997 1996
----------------- -----------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 1,236,049 $ 561,819
Accrued liabilities 103,620 125,219
Deferred rent 584,967 -
Deferred revenue 71,085 -
Due to affiliates 1,112,542 172,571
----------------- -----------------
TOTAL CURRENT LIABILITIES 3,108,263 859,609
COMMITMENTS AND CONTINGENCIES - -
----------------- -----------------
TOTAL LIABILITIES 3,108,263 859,609
STOCKHOLDERS' EQUITY Preferred Stock, $.01 par value:
Authorized - 3,000,000 shares
Issued and outstanding - none - -
Common Stock, $.01 par value:
Authorized - 22,000,000 shares
Issued and outstanding - 8,469,933 and
6,362,500 shares 84,699 63,625
Additional paid-in capital 10,269,518 7,850,042
Accumulated deficit (5,703,977) (4,414,694)
----------------- -----------------
TOTAL STOCKHOLDERS' EQUITY 4,650,240 3,498,973
----------------- -----------------
$ 7,758,503 $ 4,358,582
================= =================
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements
3
<PAGE>
<TABLE>
<CAPTION>
GRAND HAVANA ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
<S> <C> <C> <C> <C>
For the Three Months For the Nine Months
-------------------- -------------------
June 29, June 30, June 29, June 30,
1997 1996 1997 1996
-------- --------- -------- --------
REVENUES
Food and beverage sales $ 739,211 $1,034,781 $2,055,359 $3,119,389
Membership fees 464,175 135,450 824,642 496,992
Licensing 600,000 - 600,000 200,000
Merchandise sales 117,716 74,489 253,513 266,108
Other 23,156 41,700 43,224 68,295
---------- --------- --------- ---------
1,944,258 1,286,420 3,776,738 4,150,784
---------- --------- --------- ---------
COST AND EXPENSES:
Food and beverage 297,381 304,682 745,135 911,359
Merchandise 82,375 57,334 159,381 197,109
Direct labor and benefits 625,907 455,876 1,405,845 1,798,316
Occupancy and other 391,328 350,713 777,803 828,309
Pre-opening expense 166,550 - 241,550 41,006
General and administrative 334,791 193,390 792,509 580,171
Depreciation and amortization 103,323 30,784 206,161 170,727
---------- --------- --------- ---------
2,001,655 1,392,779 4,328,384 4,526,996
---------- --------- --------- ---------
LOSS BEFORE OTHER
INCOME (EXPENSE) (57,396) (106,360) (551,646) (376,213)
---------- --------- --------- ---------
OTHER INCOME (EXPENSES)
Interest income 5,082 25,776 11,382 88,851
Interest expense (107,309) (6,689) (143,867) (18,964)
Other income (net) 72,909 45,708 76,964 95,142
---------- --------- --------- ---------
(29,318) 64,796 (55,521) 165,030
---------- --------- --------- ---------
LOSS FROM CONTINUING
OPERATIONS $ (86,714) $(41,564) $(607,167) $(211,183)
---------- --------- --------- ---------
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements
4
<PAGE>
<TABLE>
<CAPTION>
GRAND HAVANA ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (cont.)
(unaudited)
<S> <C> <C> <C> <C>
For the Three Months For the Nine Months
--------------------- ---------------------
June 29, June 30, June 29, June 30,
1997 1996 1997 1996
---------- --------- ---------- ---------
LOSS FROM CONTINUING OPERATIONS (86,714) (41,564) (607,167) (211,183)
---------- --------- ---------- ---------
DISCONTINUED OPERATIONS
(Loss) from operations - (232,544) (94,809) (352,691)
Gain (loss) on disposal 286,942 - (587,306) -
---------- --------- ---------- ---------
INCOME (LOSS) FROM DISCONTINUED
OPERATIONS 286,942 (232,544) (682,115) (352,691)
---------- --------- ---------- ---------
NET INCOME (LOSS) $ 200,228 $ (274,108)$(1,289,282) $(563,874)
========== ========= ========== =========
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING 8,356,461 6,262,500 7,791,131 6,262,500
========== ========= ========== ==========
NET LOSS PER COMMON SHARE $ 0.02 $(0.04) $(0.17) $(0.09)
========== ========= ========== ==========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements
5
<PAGE>
<TABLE>
<CAPTION>
GRAND HAVANA ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
<S> <C> <C>
For the Nine Months
-----------------------------------
June 29, June 30,
1997 1996
----------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (1,289,282) $ (563,874)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 206,161 291,713
Changes in assets/liabilities
Receivables (74,284) 14,507
Inventories (525,682) (26,531)
Prepaid expenses 137,919 (17,480)
Deposits and other (131,173) 32,290
Payables 652,630 (253,988)
Assets held for sale (359,924) -
Deferred Rent 584,967 -
Deferred Income 71,085 (200,000)
------------ ------------
NET CASH - OPERATING (727,583) (723,363)
CASH FLOW FROM INVESTING ACTIVITIES
Purchases of Capital assets (3,435,471) (94,236)
------------- ------------
NET CASH - INVESTING (3,435,471) (94,236)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from sale of stock 2,440,550 -
Due to affiliates 1,112,542 -
Repayment of Notes payable (172,571) (106,401)
------------- ------------
NET CASH - FINANCING 3,380,521 (106,401)
NET DECREASE IN CASH AND CASH EQUIVALENT (782,533) (924,000)
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD 1,010,062 2,281,973
------------- ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 227,529 $ 1,357,973
============= ============
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements
6
<PAGE>
GRAND HAVANA ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. The results of interim periods are not necessarily indicative
of results to be expected for the year. In the opinion of the
Company, the accompanying consolidated financial statements
reflect all adjustments (which are normal recurring adjustments)
necessary for a fair presentation of the results for the interim
period and the comparable period presented. These condensed
financial statements do not purport to be full presentations and
do not include all requirements in accordance with generally
accepted accounting principles, but include all information
required by the instructions to Form 10-QSB.
The information included in this quarterly report on Form 10-QSB
should be read in conjunction with the audited financial
statements as of September 30, 1996, filed as part of the
Company's annual report on Form 10-KSB.
Note 2. Disposition of business segment in December 1996. The Board of
Directors approved a plan of dissolution for the Love's
restaurant chain. The Company originally estimated approximately
$900,000 of disposal and wind down costs. During the quarter
ended June 29, 1997, Management changed its estimate on the costs
of disposal and wind-down based on agreements to sell
substantially all assets of Love's Enterprises, Inc, except for
the international rights of Love's trademark, which the Company
intends to retain. Pursuant to the change in estimate, the
Company recorded a gain of approximately $287,000 to revise the
reserve required to wind-down and dispose of Love's Enterprises
and its assets.
Note 3. In February 1997, the Company entered into a financing
agreement with United Leisure Corporation ("ULC"), a public
company and an affiliate of the Company, whereby ULC agreed to
provide advances to the Company from time to time, during a
period of six months, of up to $1,250,000. Interest on any
amounts advanced bears interest at the rate of 8% per annum. The
full principal amount and accrued interest on any amounts
advanced is payable on September 30, 1997. In consideration for
making the loan, the Company issued 75,000 shares of its common
stock to ULC. If the loan is not paid by the maturity date, the
Company has agreed to issue an additional 25,000 shares of its
common stock to ULC. As of June 29, 1997 the Company had borrowed
an aggregate of $775,000 under this financing agreement. The
Chairman of the Board, President and Chief Executive Officer of
the Company is the Chairman of the Board and Chief Executive
Officer of ULC. The Chief Financial Officer of the Company is the
Chief Financial officer of ULC.
Note 4. In May 1997, the Company entered into a financing agreement
with United Film Distributors, Inc. ("UFD"), an affiliate of the
Company, whereby UFD agreed to provide advances to the Company
from time to time. Interest on any amounts advanced bears
interest at the rate of prime plus 3% per annum. The full
principal amount and accrued interest on any amounts advanced is
payable on demand. As of June 29, 1997 the Company had borrowed
an aggregate of $337,542 under this financing agreement. The
Chairman of the Board, President and Chief Executive Officer of
the Company is the Chairman of the Board and Chief Executive
Officer of UFD.
7
<PAGE>
<TABLE>
<CAPTION>
Note 5. The Company's inventory at June 29, 1997 consisted of the
following:
<S> <C>
Liqour products $ 137,977
Food and other beverages 25,892
Tobacco products 267,567
Merchandise 304,300
-------------
$ 735,736
=============
</TABLE>
Note 6 In the quarter ended June 29, 1997 the Company sold, in
private placements of its securities, an aggregate of 432,500
shares of its common stock, and warrants to purchase an aggregate
of 80,000 shares of its common stock, for aggregate proceeds to
the Company of approximately $649,500. See part II, Item 2.
"Changes in Securities."
8
<PAGE>
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
This Quarterly Report on Form 10-QSB contains forward-looking
statements. A forward-looking statement may contain words such as "will continue
to be," "will be," "continue to," "expect to," "anticipates that," "to be," or
"can impact." Management cautions that forward-looking statements are subject to
risks and uncertainties that could cause the Company's actual results to differ
materially from the those projected in forward-looking statements.
Grand Havana Enterprises, Inc., formerly known as United
Restaurants Inc., and its subsidiaries (collectively, the "Company") is engaged
primarily in the business of the ownership, operation and development of private
membership restaurants and cigar clubs and of retail cigar stores. The Company's
private membership restaurant and cigar clubs are known as "Grand Havana Rooms"
("GHR"), and the Company's retail cigar stores, specializing in premium cigars,
humidors, cigar accessories and merchandise are known as "Grand Havana House of
Cigars" ("GHHC"). The Beverly Hills GHR opened in June 1995, the Washington DC
GHR and GHHC opened in March 1997, the New York GHR opened in May 1997. Two
additional GHHC's are scheduled to open in late 1997, one in Beverly Hills,
adjacent to the Company's On Canon restaurant and one in Las Vegas in the lobby
of Bally's Hotel and Casino. In addition, the Company has an agreement to
operate a Cigar kiosk in the Las Vegas Hilton. The Company intends to actively
pursue the operation of its existing Grand Havana Room locations and the
development of additional GHR and GHHC locations in major cities as its
principal business focus.
On May 27, 1993, soon after its incorporation, the Company
acquired all of the issued and outstanding shares of the capital stock of Love's
Enterprises, Inc. ("Love's"), which has been in business since the 1950's.
During the quarter ending June 29, 1997, the company owned and operated four
Love's restaurants, and is the franchisor of an additional 10 Love's
restaurants. In December 1996, the Company adopted a formal plan of
discontinuance of its Love's subsidiary. During the quarter, the company sold
one Love's restaurant, and a second Love's restaurant is expected to sell in mid
to late August 1997. In July 1997, the Company entered escrow to sell the
remaining two Company-owned restaurants and domestic franchise rights to a
private company controlled by a restaurateur. The only Love's related assets
which the Company intends to retain are the international licensing rights to
the Love's restaurants.
In April 1995, the Company opened "On Canon," an upscale
Italian restaurant and bar, in Beverly Hills, California, which it continues to
operate. In June of 1994 the Company acquired 85% of the stock of Il Forno,
Inc., which owns and operates an Italian restaurant in Santa Monica, California.
On September 20, 1996, the Company sold its 85% interest back to Il Forno's
former owners.
The Company is developing a plan to market its own label of
premium cigars. The Company is actively seeking other sources of revenue
including, but not limited to, licensing GHR, GHHC and Loves internationally.
9
<PAGE>
Results of Operations - Three Months Ended June 29, 1997, Compared to Three
Months Ended June 30, 1996
The Company derives revenues from three principal sources:
food and beverage sales, merchandise sales and membership fees. During the
quarter ended June 29, 1997, the Company was operating the On Canon Restaurant
and three Grand Havana Rooms. During the quarter ended June 29, 1996, the
Company was operating the Il Forno Restaurant, the On Canon Restaurant, and one
Grand Havana Room. The operation of Love's was discontinued and accordingly, its
results of operations for the quarter ended June 29, 1997 and June 30, 1996 are
shown under "Discontinued operations" in the accompanying statements of
operations.
The Company experienced net loss of $(274,108) in the quarter
ended June 30, 1996 compared to net income of $200,228 in the quarter ended June
30, 1997. However, without a one-time recognition of a $600,000 territory rights
fee for the use of GHR's territorial rights in the Far East, the loss would have
been $(399,772) for the quarter ended June 30, 1997. In both years, a
significant portion of the negative operating results were due to the corporate
overhead required to manage the further expansion of GHR's and GHHC.
Furthermore, in the quarter ended June 29, 1997, the Company charged to
operations the opening costs associated with its New York GHR of approximately
$166,550.
During the three months ended June 29, 1997, the Company
recorded revenues of $1,944,258, compared to revenues of $1,286,420 in the
quarter ended June 30, 1996, an increase of $657,838. The increase is primarily
attributable to increased membership fees of $328,725 due to the operations of
GHR's in New York and Washington, D.C. during this quarter and a one-time
$600,000 licensing fee for GHR in the far east. The Company had a decrease of
revenues from food and beverage sales of approximately $300,000 from the quarter
ended June 30, 1996 compared to the quarter ended June 29, 1997 due primarily to
the sale of the Il Forno restaurant in September 1996.
Company costs and expenses increased from $1,392,779 for the
fiscal quarter ended June 30, 1996 to $2,001,655 for the fiscal quarter ended
June 29, 1997, or an increase of $608,876. This increase in costs was due
primarily to GHR's, higher general and administrative costs and store opening
costs associated with the opening and management of GHR and GHHC in Washington
DC and New York. Food and beverage costs as a percentage of sales were higher
due to the concentration of the Company's efforts on more expensive, service
intensive locations such as its On Canon and GHR locations and membership
efforts for the two newer GHR's..
Results of Operations -- Nine Months Ended June 29, 1997, Compared to Nine
Months Ended June 30, 1996
The Company had revenues of $3,776,738 for the nine months
ended June 29, 1997, compared to $4,150,784 for the nine months ended June 30,
1996, a decrease of $374,046. This decrease in revenues was due primarily to
decreased food and beverage sales as a result of the sale of the Il Forno
restaurant, which was sold in September 1996. This decrease was offset by higher
licensing and membership fee revenues from the Company's new GHR's.
The Company experienced a net loss of $(1,289,282) for the
nine months ended June 29, 1997 compared to a net loss of $(563,874) for the
nine months ended June 30, 1996, or an increased loss of $725,408. However,
without a one-time recognition of $200,000 territory rights fee for the use of
Love's trademarks in the Far East, the loss would have been $(763,874) for the
nine month period ended June 30, 1996. With a one-time charge of $587,306 for
loss on disposal of Love's restaurant, the loss would have been $(701,976) for
the nine months ended June 29, 1997. In both years, a significant portion of the
negative operating results were due to the corporate overhead required to manage
the further expansion of two GHR's and one GHHC and costs associated with
opening of new facilities.
Company costs and expenses were lower due to fewer stores
offset by higher general and administrative costs and store opening costs
associated with the opening and management of the newest GHR and GHHC in
Washington DC. Food and beverage costs as a percentage of sales were higher due
to the concentration of the Company's efforts on more expensive, service
intensive locations such as its On Canon and GHR locations versus its lower
costing, family oriented Loves restaurants. Other store-level operating expense
decreases were in line with decrease in sales and stores.
Liquidity and Capital Resources
The Company intends to continue the expansion of its business,
primarily through the development and operation of additional Grand Havana Rooms
and GHHC's.
At March 30, 1997 the Company had borrowed $775,000 in
principal amount under its financing agreement with United Leisure Corporation,
which amount, together with interest thereon, is due September 30, 1997. See
Note 3 to "Notes to Consolidated Financial Statements." In addition, pursuant to
an agreement dated September 10, 1996, United Leisure Corporation has pledged
collateral to support a letter of credit required by the Company in the amount
of $875,000 which amount the Company is to replace in full by March 1998. The
September 10, 1996 agreement also provided that the Company would apply one-half
of all its initial membership fees received from members of its New York, New
York and Washington D.C. GHR's to replace collateral pledged by ULC. Subsequent
to the quarter ended June 29, 1997, ULC and the Company agreed to amend the
September 10, 1996 agreement. Pursuant to the amendment, the Company agreed, in
consideration for allowing the Company to forego the requirement that it replace
collateral out the membership fees it receives from its New York and Washington
D.C. GHR's, to grant to ULC or its designee a three-year warrant to purchase
150,000 shares of the common stock of the Company exercisable at the lessor of
$0.75 per share or 75% of the average trading price of the common stock for a
ten day period prior to the exercise of the warrant. The Chairman of the Board,
President and Chief Executive Officer of the Company is the Chairman of the
Board, President and Chief Executive Officer of United Leisure Corporation.
In May 1997, the Company entered into a financing agreement
with United Film Distributors, Inc. ("UFD") whereby UFD agreed to provide
advances to the Company from time to time. Interest on any amounts bears
interest at the rate of prime plus 3% per annum. The full principal amount and
accrued interest on any amounts advanced is payable on demand. As of June 29,
1997 the Company had borrowed an aggregate of $337,542 under this financing
agreement. The Chairman of the Board, President and Chief Executive Officer of
the Company is the Chairman of the Board and Chief Executive Officer of UFD.
As a result of its expansion activities, the Company's working
capital has continually been reduced. At June 29,1997 the Company had cash or
cash equivalents of $227,529 and a working capital deficit of ($1,248,120). The
Company anticipates that in connection with its development plans during the
next 12 months of operations, the Company will require additional funds, which
the Company may raise through a private placement of securities, sale of
discontinued operations (Love's), collection of accounts receivables on sales of
foreign territories (approximately $300,000 is due at June 29, 1997 and is
expected to be collected in April 1998) or additional borrowings from affiliates
or non-affiliates. In this regard, since the end of its fiscal year ended
September 30, 1996 through June 29, 1997 the Company has raised an aggregate of
$2,440,550 in proceeds from private placements and exercising of warrants
offered in private placements. Although management believes that with its
current working capital, the funds to be raised in future private placements of
the Company's securities, and the monies to be received from additional initial
membership fees at its Grand Havana Rooms, the Company will be able to repay its
debts to the United Leisure Corporation and United Film Distributors, operate
its present business, and fund the future development of its business for at
least the next 12 months, however, there can be no assurance that this will be
the case. There can be no assurance that the Company will be able to acquire
additional financing, or that if such financing is available, that it will be
available to the Company on acceptable terms. The Company's management believes
that funds spent on the Company's development activities will accrue to the
Company's benefit in future years.
10
<PAGE>
PART II - OTHER INFORMATION
Item 2. Changes in Securities
In April 1997 the Company sold an aggregate of 270,000 shares
of its common stock to a total of 5 investors at a purchase price of $1.50 per
share for aggregate proceeds of $405,000.
In May 1997 the Company sold an aggregate of 12,500 share
of the common stock to 2 investors for aggregate proceeds to the Company
of $19,500.
In June 1997 the Company sold to one investor 150,000 shares
of common stock and warrants to purchase 80,000 share of common stock for
aggregate proceeds to the Company of $225,000. Each warrant is exercisable until
June 4, 2001 at an exercise price of $1.50 per share of common stock.
Each of the forgoing offerings was made directly by the
officers and directors of the Company and no underwriting discounts of
commissions were paid. Each of the foregoing transactions was exempt pursuant to
Section 4(2) of the Securities Act of 1933, as amended for issuance of
securities not involving any public offering.
11
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
Exhibits
(27) Financial Data Schedule
Reports on Form 8-K
The Company filed no reports on Form 8-K during the period covered by this
Quarterly Report on Form 10-SQB.
12
<PAGE>
SIGNATURES
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.
Grand Havana Enterprises, Inc.
Dated: August 11, 1997 By: /s/ Harry Shuster
--------------------- ----------------------
Harry Shuster,
Chairman of the Board and Chief
Executive Officer
Date: August 11, 1997 By: /s/ David M. Kane
---------------------- ----------------------
David M. Kane,
Chief Financial Officer
13
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
FINANCIAL DATA SCHEDULE
This schedule contains summary financial information extracted from the
Company's consolidated balance sheets and consolidated statements of operations
for its fiscal quarter ended June 29,1 997 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> JUN-29-1997
<CASH> 227,529
<SECURITIES> 0
<RECEIVABLES> 469,967
<ALLOWANCES> 54,036
<INVENTORY> 735,736
<CURRENT-ASSETS> 1,860,143
<PP&E> 5,353,656
<DEPRECIATION> 489,257
<TOTAL-ASSETS> 7,758,503
<CURRENT-LIABILITIES> 3,108,263
<BONDS> 0
0
0
<COMMON> 84,699
<OTHER-SE> 4,650,240
<TOTAL-LIABILITY-AND-EQUITY> 7,758,503
<SALES> 3,776,738
<TOTAL-REVENUES> 3,776,738
<CGS> 904,516
<TOTAL-COSTS> 4,328,384
<OTHER-EXPENSES> 55,521
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 143,867
<INCOME-PRETAX> (1,289,282)
<INCOME-TAX> 0
<INCOME-CONTINUING> (607,167)
<DISCONTINUED> (682,115)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,289,282)
<EPS-PRIMARY> (0.17)
<EPS-DILUTED> (0.17)
</TABLE>
