<PAGE> 1
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 March 30, 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.
<TABLE>
<CAPTION>
Class Outstanding at May 8, 1997
----- --------------------------
<S> <C>
Common Stock, par value 8,319,933 shares
$.01 per share
</TABLE>
Transitional Small Business Disclosure Format (check one):
YES NO X
--- ---
<PAGE> 2
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL INFORMATION
GRAND HAVANA ENTERPRISES AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
ASSETS
(unaudited)
<TABLE>
<CAPTION>
March 30, 1997 September 30, 1996
-------------- ------------------
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $ 153,550 $1,010,062
Accounts receivable, less allowance for
doubtful accounts of $15,500 (March 30,
1997 and September 30, 1996) 210,765 125,402
Short Term note receivable 3,721
Equipment contract receivable 330,000
Inventories 572,087 210,054
Prepaid expenses and other assets 336,567 145,187
Net assets discontinued business, held for sale 515,901 -
---------- ----------
TOTAL CURRENT ASSETS 1,792,591 1,820,705
PROPERTY AND EQUIPMENT, NET 4,600,096 2,124,346
OTHER ASSETS
Pre-opening costs 24,551 132,723
Due from related parties 48,000 69,419
Deferred financing cost 200,110 80,000
Deposits and other 15,184 131,389
---------- ----------
TOTAL OTHER ASSETS 287,845 413,531
TOTAL ASSETS $6,680,532 $4,358,582
========== ==========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
Page 2
<PAGE> 3
LIABILITIES AND STOCKHOLDERS' EQUITY
(unaudited)
<TABLE>
<CAPTION>
March 30, 1997 September 30, 1996
-------------- ---------------------
CURRENT LIABILITIES
<S> <C> <C>
Accounts Payable $ 597,478 $ 561,819
Accrued liabilities 200,522 125,219
Deferred Rent 366,144 -
Deferred Revenue 186,500 -
Accrued costs of discontinued operations 753,291 -
Current portion of long-term debt 172,571 172,571
----------- -----------
TOTAL CURRENT LIABILITIES 2,276,506 859,609
COMMITMENTS AND CONTINGENCIES - -
LONG TERM LIABILITIES 603,480 -
----------- -----------
TOTAL LIABILITIES 2,879,986 859,609
----------- -----------
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 - 8,037,400 shares
and 6,362,500 shares 80,374 63,625
Additional paid - in capital 9,624,343 7,850,042
Accumulated deficit (5,904,171) (4,414,694)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 3,800,546 3,498,973
----------- -----------
TOTAL LIABILITIES AND EQUITY $ 6,680,532 $ 4,358,582
=========== ===========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
Page 3
<PAGE> 4
GRAND HAVANA ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended Ended
March 30 March 31 March 30 March 31
----------------------------- -----------------------------
1997 1996 1997 1996
----------------------------- -----------------------------
<S> <C> <C> <C> <C>
REVENUES
Food and beverage sales $ 677,962 $ 1,066,906 $ 1,316,148 $ 2,084,608
Merchandise sales 62,928 106,709 135,797 191,619
Membership fees 202,100 224,834 360,467 361,542
Other 568 22,595 20,067 26,595
----------- ----------- ----------- -----------
943,558 1,421,044 1,832,479 2,664,364
COST AND EXPENSES:
Food and beverage 231,829 304,364 447,754 606,676
Merchandise 28,701 83,952 77,006 139,774
Direct labor and benefits 376,847 414,261 779,938 823,350
Occupancy and other 88,691 233,622 386,475 640,409
Pre-opening expense 75,000 - 75,000 -
General and administrative 356,062 269,328 457,718 566,925
Depreciation and amortization 51,452 70,135 102,838 139,944
----------- ----------- ----------- -----------
1,208,582 1,375,662 2,326,729 2,917,078
----------- ----------- ----------- -----------
INCOME (LOSS) FROM OPERATIONS (265,024) 45,382 (494,250) (252,714)
OTHER INCOME (EXPENSES)
Interest income 650 15,086 6,300 49,575
Interest expense - 7,224 (36,558) -
Other income, net 4,844 17,001 4,088 19,324
----------- ----------- ----------- -----------
5,494 39,311 (26,170) 68,899
----------- ----------- ----------- -----------
INCOME (LOSS) FROM CONTINUING OPERATIONS (259,530) 84,693 (520,420) (183,815)
DISCONTINUED OPERATIONS:
Loss from operations of Loves Restaurants - (2,413) (94,809) (105,951)
Loss on disposal of Loves Restaurants, - - (874,248) -
----------- ----------- ----------- -----------
LOSS FROM DISCONTINUED OPERATIONS - (2,413) (969,057) (105,951)
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ (259,530) $ 82,280 $(1,489,477) $ (289,766)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON STOCK OUTSTANDING 7,547,506 6,262,500 7,429,613 6,262,500
INCOME (LOSS) PER COMMON STOCK
Income (Loss) from continuing operations $ (0.03) $ 0.01 $ (0.07) $ (0.03)
Loss from discontinued operations - (0.00) (0.13) (0.02)
----------- ----------- ----------- -----------
NET INCOME (LOSS) PER COMMON STOCK $ (0.03) $ 0.01 $ (0.20) $ (0.05)
=========== =========== =========== ===========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
Page 4
<PAGE> 5
GRAND HAVANA ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
For the Six Months
Ended
March 30 March 31
------------------------------
1997 1996
----------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net $(1,489,477) $ (289,766)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation and amortization 102,838 193,591
Changes in assets/liabilities
Receivables (89,084) (3,510)
Inventories (362,033) (40,880)
Prepaid expenses (191,380) (35,931)
Net Assets Discontinued Operations (515,901)
Deposits and other 116,205 32,876
Payables 401,803 (251,786)
Accrued Liabilities and Def. Income 261,803 (200,000)
Accrued cost of Discontinued Operations 753,291
----------- -----------
Net Cash - Operating (1,011,935) (595,406)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Pre-opening costs 108,172 -
Purchases of property and equipment (2,578,588) -
Advances to related party 21,419 -
Capital Assets (120,110) (28,096)
----------- -----------
Net Cash - Investing (2,569,107) (28,096)
----------- -----------
CASH FLOWS - FINANCING
Equipment contract Receivable 330,000
Notes payable 603,480 (18,948)
Stock issuance 1,791,050
----------- -----------
Net Cash - Financing 2,724,530 (18,948)
----------- -----------
NET CHANGE IN CASH AND
AND CASH EQUIVALENTS (856,512) (642,450)
CASH AND CASH EQUIVALENTS,
beginning of period 1,010,062 2,281,973
----------- -----------
Cash Balance End of Period $ 153,550 $ 1,639,523
=========== ===========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
Page 5
<PAGE> 6
GRAND HAVANA ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Note 1. The result 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.
The September 30, 1996 balance sheet was derived from audited
consolidated financial statements but does not include all
disclosures required by generally accepted accounting
principals.
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 estimates that it will lose
approximately $450,000 on the sale of the related assets and an
additional $424,000 related to the wind down and disposal of the
Love's restaurant chain over an estimated ten to eighteen
months. During the quarter ended March 30, 1997, Love's realized
a loss of approximately $121,000 which was recorded against the
provision for loss recorded in the quarter ended December 29,
1996.
Note 3. In February 1997, the Company entered into a financing agreement
with United Leisure Corporation ("United Leisure") whereby
United Leisure 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 United Leisure. 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 United
Leisure. As of March 30, 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 United Leisure Corporation.
Note 4. In January 1997 the Company sold 100,000 shares of its common
stock, and warrants to purchase an additional 100,000 shares of
its common stock, at an exercise price of $1.50 per share, for
an aggregate purchase price of $75,000. The sale was part of the
Company's private placement which was conducted from October
1996 through January 1997. The purchaser of these securities was
the Harry and Nita Shuster Charitable Foundation. Harry Shuster
is the Chairman of the Board, President and Chief Executive
Officer of the Company.
During February 1997, United Leisure Corporation exercised
outstanding warrants to purchase an aggregate of 433,333 shares
of the common stock of the Company for an aggregate purchase
price of $575,000. Harry Shuster, the Chairman of the Board,
President and Chief Executive Officer of the Company is also the
Chairman of the Board, President and Chief Executive Officer of
United Leisure Corporation.
On February 12, 1997, the Company issued 75,000 shares of its
common stock to United Leisure Corporation in consideration for
United Leisure agreeing to provide up to $1,250,000 in financing
to the Company pursuant to a Financing Agreement dated as of
February 12, 1997.
On March 1, 1997, in consideration for consulting services
rendered, the Company issued an aggregate of 110,000 shares of
common stock to a consultant. On March 11, 1997, in
consideration for consulting services rendered, the Company
issued an aggregate of 10,000 shares of common stock to another
consultant.
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
except pursuant to Section 4(2) of the Securities Act of 1933,
as amended for issuance of securities not involving any public
offering.
Note 5. The Company's inventory at March 30, 1997 consisted of the
following:
Liquor products $ 102,607
Food and other beverages 29,160
Tobacco products 189,395
Merchandise 250,926
---------
$ 572,087
=========
Page 6
<PAGE> 7
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 and the Washington
DC GHR and GHHC opened in March 1997. One additional GHR in New York is
currently scheduled to open in late May 1997 and one additional GHHC is
currently scheduled to open in Beverly Hills in July 1997. 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"). Love's, which has been in business since the
1950's, currently operates three Company-owned 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.
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.
Page 7
<PAGE> 8
RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 30, 1997, COMPARED TO THREE
MONTHS ENDED MARCH 31, 1996
The Company derives revenues from three principal sources: food
and beverage sales, merchandise sales and membership fees. During the quarter
ended March 31, 1997, the Company was operating the On Canon Restaurant and two
Grand Havana Rooms. During the quarter ended March 31, 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 March 31, 1997 and March 31, 1996 are shown
under "Discontinued operations" in the accompanying statements of operations.
The Company experienced net income of $82,280 in the quarter
ended March 31, 1996 compared to a loss of $(259,530) in the quarter ended March
30, 1997. 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
$(117,720) for the quarter ended March 31, 1996. 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. Furthermore,
in the quarter ended March 30, 1997, the Company charged to operations the
opening costs associated with its Washington DC GHR.
During the three months ended March 31, 1997, the Company
recorded revenues of $943,558, compared to revenues of $1,421,044 in the quarter
ended March 31, 1996, a decrease of $477,486. The decrease is mainly
attributable to the sale of the Il Forno restaurants in September 1996.
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 cost,
family oriented Loves restaurants. Other store-level operating expense decreases
were in line with decrease in sales and stores.
RESULTS OF OPERATIONS -- SIX MONTHS ENDED MARCH 31, 1997, COMPARED TO SIX MONTHS
ENDED MARCH 31, 1996
The Company had revenues of $1,832,479 for the six months ended
March 31, 1997, compared to $2,664,364 for the six months ended March 31, 1996,
a decrease of $831,885. This decrease in revenues was due primarily to the sale
of the Il Forno restaurant, which was sold in September 1996.
The Company experienced a net loss of $(289,766) for the six
months ended March 31, 1996 compared to a net loss of $(1,489,477) for the six
months ended March 30,
Page 8
<PAGE> 9
1997, or an increased loss of $1,199,711. 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 $(489,766) for the quarter ended March
31, 1996, and with a one-time charge of $874,248 for loss on disposal of Love's
restaurant, the loss would have been $(615,229) for the six months ended March
31, 1996. 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 cost,
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, including the addition of a new GHR in New York, New York, which is
currently scheduled to open in late May 1997.
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, 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 "United Leisure Debt").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.
As a result of its expansion activities, the Company's working
capital has continually been reduced. At March 30,1997 the Company had cash or
cash equivalents of $153,550. The Company anticipates that in connection with
its development plans during the next 12 months of operations, the Company may
require additional funds, which the Company may raise through a private
placement of securities. In this regard, since the end of its fiscal year ended
September 30, 1996 through March 30, 1997, the Company has raised an aggregate
of $1,280,000 in proceeds from private placements and exercising of warrants
offered in private placements. In April 1997, the Company commenced an
additional private placement to which it is offering to a very limited number of
investors an aggregate of up to 500,000 shares of common stock at a purchase
price of $1.50 per share, for an aggregate proceeds to the Company of up to
$750,000. Although management believes that with its current working capital,
the funds raised in private placements, and the monies received from initial
membership fees at its Grand Havana Rooms, the Company will be able to repay the
United Leisure Debt, operate its
Page 9
<PAGE> 10
business, and fund the development of its business for at least the next 12
months. However, there can be no assurance that this will be the case. If the
Company is in need of additional financing, 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.
Page 10
<PAGE> 11
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
In January 1997 the Company sold 100,000 shares of its common
stock, and warrants to purchase an additional 100,000 shares of its common
stock, at an exercise price of $1.50 per share, for an aggregate purchase price
of $75,000. The sale was part of the Company's private placement which was
conducted from October 1996 through January 1997. The purchaser of these
securities was the Harry and Nita Shuster Charitable Foundation. Harry Shuster
is the Chairman of the Board, President and Chief Executive Officer of the
Company.
During February 1997, United Leisure Corporation exercised
outstanding warrants to purchase an aggregate of 433,333 shares of the common
stock of the Company for an aggregate purchase price of $575,000. Harry Shuster,
the Chairman of the Board, President and Chief Executive Officer of the Company
is also the Chairman of the Board, President and Chief Executive Officer of
United Leisure Corporation.
On February 12, 1997, the Company issued 75,000 shares of its
common stock to United Leisure Corporation in consideration for United Leisure
agreeing to provide up to $1,250,000 in financing to the Company pursuant to a
Financing Agreement dated as of February 12, 1997.
On March 1, 1997, in consideration for consulting services
rendered, the Company issued an aggregate of 110,000 shares of common stock to a
consultant. On March 11, 1997, in consideration for consulting services
rendered, the Company issued an aggregate of 10,000 shares of common stock to
another consultant.
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 except pursuant to Section 4(2) of
the Securities Act of 1933, as amended for issuance of securities not involving
any public offering.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
By written consent of the majority of issued and outstanding
share of the common stock of the Company, on February 25, 1997 the name of the
Company was changed from United Restaurants, Inc. to Grand Havana Enterprises,
Inc.
Page 11
<PAGE> 12
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.
Page 12
<PAGE> 13
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: May 9, 1997 By: /s/ HARRY SHUSTER
---------------- --------------------------------------
Harry Shuster,
Chairman of the Board and Chief
Executive Officer
Date: May 9, 1997 By: /s/ DAVID M. KANE
----------------- ----------------------------------
David M. Kane,
Chief Financial Officer
Page 13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS
FOR ITS FISCAL QUARTER ENDED MARCH 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-30-1997
<CASH> 153,550
<SECURITIES> 0
<RECEIVABLES> 229,986
<ALLOWANCES> 15,500
<INVENTORY> 572,087
<CURRENT-ASSETS> 1,792,591
<PP&E> 4,971,206
<DEPRECIATION> 371,110
<TOTAL-ASSETS> 6,680,532
<CURRENT-LIABILITIES> 2,276,506
<BONDS> 0
0
0
<COMMON> 80,374
<OTHER-SE> 3,720,172
<TOTAL-LIABILITY-AND-EQUITY> 6,680,532
<SALES> 740,890
<TOTAL-REVENUES> 943,558
<CGS> 260,530
<TOTAL-COSTS> 260,530
<OTHER-EXPENSES> 948,052
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (259,530)
<INCOME-TAX> 0
<INCOME-CONTINUING> (259,530)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (259,530)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> 0
</TABLE>
