<PAGE> 1
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 quarterly period ended December 28, 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.
(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 Principal 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 practicable date.
Class Outstanding at February 11, 1998
----------------------- --------------------------------
Common Stock, par value 12,949,306 shares
$.01 per share
Transitional Small Business Disclosure Format (check one):
YES [ ] NO [X]
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
GRAND HAVANA ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
December 28, September 28,
1997 1997
------------ -------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 208,239 $ 879,461
Accounts receivable, net 154,208 56,924
Current portion of note receivable 20,786 24,829
Subscriptions receivable 1,288,950
Inventories 767,420 786,168
Prepaid expenses 276,465 206,685
Net assets of discontinued operations 224,533 237,143
---------- ----------
TOTAL CURRENT ASSETS 1,651,651 3,480,160
PROPERTY AND EQUIPMENT, Net 4,588,712 4,458,734
OTHER ASSETS
Restricted cash 993,596 118,596
Note receivable, net of current portion 55,171 55,171
Pre-opening costs 8,921 6,895
Due from related parties 45,252 78,032
Deferred charges 181,078 205,596
Deposits and other assets 95,650 95,650
---------- ----------
TOTAL OTHER ASSETS 1,379,668 559,940
---------- ----------
$7,620,031 $8,498,834
========== ==========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
2
<PAGE> 3
GRAND HAVANA ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS, CONTINUED
<TABLE>
<CAPTION>
December 28, September 28,
1997 1997
------------ -------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable to related parties $ 1,157,000 $ 1,482,000
Accounts payable 1,161,861 1,054,547
Accrued liabilities 154,541 203,942
Deferred revenues 151,289 57,026
Due to related parties 490,194 420,599
Deferred rent payable 477,990 488,606
Accrued costs of discontinued operations 155,068 200,000
------------ ------------
TOTAL CURRENT LIABILITIES 3,747,943 3,906,720
------------ ------------
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; authorized - 3,000,000
shares; issued and outstanding - none
Common stock, $.01 par value; authorized - 50,000,000
shares; issued and outstanding - 11,799,306 shares 117,994 117,994
Additional paid-in capital 12,684,723 12,684,723
Accumulated deficit (8,930,629) (8,210,603)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 3,872,088 4,592,114
------------ ------------
$ 7,620,031 $ 8,498,834
============ ============
</TABLE>
See accompanying notes to consolidated condensed financial statements.
3
<PAGE> 4
GRAND HAVANA ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------
December 28, December 29,
1997 1996
------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C>
REVENUES
Food and beverage $ 862,312 $ 638,186
Merchandise sales 184,425 72,869
Membership fees 273,743 158,367
Other 175,805 19,499
------------ ------------
TOTAL REVENUES 1,496,285 888,921
COSTS AND EXPENSES
Food and beverage 416,903 215,925
Merchandise 127,389 48,305
Operating expenses
Direct labor 653,789 403,091
Occupancy and other 771,198 297,784
General and administrative 100,598 101,656
Depreciation and amortization 107,501 51,386
------------ ------------
TOTAL COSTS AND EXPENSES 2,177,378 1,118,147
------------ ------------
LOSS BEFORE OTHER INCOME (EXPENSE) (681,093) (229,226)
OTHER INCOME (EXPENSE)
Interest income 1,365 4,894
Interest expense (40,298) (36,558)
------------ ------------
TOTAL OTHER INCOME (EXPENSE) (38,933) (31,664)
------------ ------------
LOSS FROM CONTINUING OPERATIONS (720,026) (260,890)
DISCONTINUED OPERATIONS
Loss from operations (94,809)
Estimated loss on disposal (874,248)
------------ ------------
LOSS FROM DISCONTINUED OPERATIONS -- (969,057)
------------ ------------
NET LOSS $ (720,026) $ (1,229,947)
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 11,799,306 7,309,100
============ ============
BASIC LOSS PER SHARE
Loss from continuing operations $ (0.06) $ (0.04)
Loss from discontinued operations (0.01)
Estimated loss on disposal (0.12)
------------ ------------
$ (0.06) $ (0.17)
============ ============
</TABLE>
See accompanying notes to consolidated condensed financial statements.
4
<PAGE> 5
GRAND HAVANA ENTERPRISES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------
December 28, December 29,
1997 1996
----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (720,026) $(1,229,947)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 120,111 76,749
Amortization of deferred charges 24,518 13,335
Changes in operating assets and liabilities:
Accounts receivable (97,284) (39,190)
Inventories 18,748 (76,208)
Prepaid expenses (69,780) (60,744)
Pre-opening costs (2,026) (357,042)
Accounts payable and accrued liabilities 57,913 363,301
Accrued costs of discontinued operations (44,932) 874,248
Deferred revenues 94,263
Deferred rent payable (10,616)
----------- -----------
NET CASH USED IN OPERATING ACTIVITIES (629,111) (435,498)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (237,479) (481,568)
Due from related parties 32,780 21,419
Collection of note receivable 4,043
Collection of equipment contract receivable 330,000
Restricted cash (875,000)
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (1,075,656) (130,149)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal reductions of notes payable (325,000) (171,520)
Due to related parties 69,595
Collections of subscriptions receivable 1,288,950
Sale of common stock 710,000
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,033,545 538,480
----------- -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (671,222) (27,167)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 879,461 1,010,062
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 208,239 $ 982,895
=========== ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
5
<PAGE> 6
GRAND HAVANA ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The interim consolidated condensed financial statements presented have been
prepared by Grand Havana Enterprises, Inc. (the "Company") without audit
and, in the opinion of the management, reflect all adjustments of a normal
recurring nature necessary for a fair statement of (a) the results of
operations for the three months ended December 28, 1997 and December 29,
1996, (b) the financial position at December 28, 1997 and (c) the cash
flows for the three months ended December 28, 1997 and December 29, 1996.
Interim results are not necessarily indicative of results for a full year.
The consolidated balance sheet presented as of September 28, 1997 has been
derived from the consolidated financial statements that have been audited
by the Company's independent public accountants. The consolidated financial
statements and notes are condensed as permitted by Form 10-QSB and do not
contain certain information included in the annual financial statements and
notes of the Company. The consolidated financial statements and notes
included herein should be read in conjunction with the financial statements
and notes included in the Company's Annual Report on Form 10-KSB.
2. BASIC LOSS PER SHARE
The Company adopted the Statement of Financial Accounting Standards No.
128, "Earnings per Share" during the three months ended December 28, 1997.
Basic loss per share is computed by dividing net loss by the weighted
average number of shares of common stock outstanding during the period. The
adoption of the statement did not change the loss per share for three
months ended December 29, 1996.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
Grand Havana Enterprises, Inc. is engaged in the business of the
ownership, operation and development of private membership restaurants and cigar
clubs known as "Grand Havana Rooms," and in the ownership, operation and
development of retail cigar stores known as "Grand Havana House of Cigars."
The Company currently owns and operates three Grand Havana Rooms,
one in Beverly Hills, California which opened in June 1995, one in Washington,
D.C. which opened in March 1997 and a third in New York, New York which opened
in May 1997. In addition, the Company currently owns and operates three Grand
Havana House of Cigars locations, one in Beverly Hills, California which opened
in December, 1997, one in Washington D.C. which opened in March 1997 and one is
Las Vegas, Nevada which opened in November, 1997. The Company intends to
actively pursue the operation of its existing Grand Havana Room locations and
Grand Havana House of Cigars locations, and to develop additional locations of
these two establishments in major cities in the United States as its principal
business focus.
The Company also operated its On Canon restaurant during the
fiscal quarters ended December 29, 1996 and December 28, 1997. Subsequent to the
fiscal quarter ended December 28, 1997 the Company ceased operations of its On
Canon restaurant and intends to convert the restaurant space, which is located
on the ground floor below the Company's Beverly Hills Grand Havana Room, into an
expansion of the Company's Beverly Hills Grand Havana Room.
The Company was incorporated under the laws of the State of
Delaware on April 13, 1993. The Company was originally formed in order to
acquire all of the capital stock of Love's Enterprises, Inc. ("Love's"), which
company was the franchisor, owner and operator of the Love's restaurant chain.
Love's was acquired by the Company in May 1993. In December 1996, due to less
than anticipated operating results from the Love's restaurant chain, the Company
adopted a plan of discontinuance with respect to the Love's restaurant chain.
Management of the Company expects that during the membership
drive for its New York and Washington D.C. Grand Havana Rooms, and during the
period it is working on the development of additional Grand Havana Rooms and
Grand Havana House of Cigars locations, the Company will continue to experience
consolidated losses, until such time as there are enough profitable Grand Havana
Rooms and Grand Havana House of Cigars locations developed to absorb the
increased expenses and overhead; however, there can be no assurance that such
cigar clubs and retail cigar stores will be profitable in the future. The
Company has experienced operating losses since its inception.
To the extent that any of the statements contained herein
relating to the Company's business, including its development plans with respect
to its Grand Havana
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Rooms and Grand Havana House of Cigars locations, contain forward-looking
statements, such statements are based on current expectations that involve a
number of uncertainties and risks that could cause actual results to differ
materially from those projected in the forwarded-looking statements, including
risks and uncertainties associated with the costs of the development of new
Grand Havana Room and Grand Havana House of Cigars locations, the timing of the
proposed developments, compliance with regulatory requirements and the Company's
ability to sell memberships in its New York, New York and Washington, D.C.
locations. In addition to these risks, other important factors that could cause
the Company's results of operations to differ materially from those anticipated
by management include a decline in public consumption of cigars and other
tobacco products and significant increases in excise taxes which could
substantially increase the price of cigars.
RESULTS OF OPERATIONS - FISCAL QUARTER ENDED DECEMBER 28, 1997 COMPARED TO
FISCAL QUARTER ENDED DECEMBER 29, 1996
The Company derives revenues from five principal sources: food and
beverage sales, franchise royalties, sublease income, merchandise sales and
membership fees. During its fiscal quarter ended December 28, 1997 the Company
had revenues of $1,496,285 compared to revenues of $888,921 for its fiscal
quarter ended December 29, 1996, a decrease of $607,364 or approximately 68.3%.
The increase in revenues is primarily due to the fact that during its fiscal
quarter ended December 29, 1996 the Company operated the On Canon restaurant and
one Grand Havana Room as compared to its fiscal quarter ended December 28, 1997
during which the Company operated the On Canon restaurant, three Grand Havana
Rooms and three Grand Havana House of Cigar locations. The operations of Love's
was discontinued in December 1996, and, accordingly, its results of operations
for the quarter ended December 29, 1996 are shown under "Discontinued
operations" in the accompanying statement of operations.
Revenue from food and beverage sales increased from $638,186 in the
fiscal quarter ended December 29, 1996 to $862,312 in the fiscal quarter ended
December 28, 1997 or $224,126 or approximately 35.1%. This increase is due
primarily to having two additional Grand Havana Rooms operating during the
fiscal quarter ended December 28, 1997. In addition, revenues from membership
fees increased from $158,367 in the fiscal quarter ended December 29, 1996 to
$273,743 in the fiscal quarter ended December 28, 1997, an increase of $115,376
or approximately 72.9%. This increase is due to new memberships being sold at
the Company's two new Grand Havana Rooms. Revenues from merchandise sales
increased from $72,869 for the fiscal quarter ended December 29, 1996 to
$184,425 for the fiscal quarter ended December 28, 1997, an increase of $111,556
or approximately 153%. This increase was due to the Company operating three new
Grand Havana House of Cigar locations during the fiscal quarter ended December
29, 1997 and to merchandise sales at the two new Grand Havana Rooms which were
operating during the fiscal quarter ended December 29, 1997.
Total costs and expenses of the Company increased from $1,118,147 for
the fiscal quarter ended December 29, 1996 to $2,177,378 for the fiscal quarter
ended December 28, 1997, an increase of $1,059,231 or 94.7%. The increase is
mainly due to increased
8
<PAGE> 9
occupancy, labor, food and beverage, merchandise and other costs associated with
the two additional Grand Havana Rooms which were operating during the fiscal
quarter ended December 28, 1997 and the three additional Grand Havana House of
Cigar locations which were operating during the fiscal quarter ended December
28, 1997.
The Company's loss from continuing operations increased from ($260,890)
in the fiscal quarter ended December 29, 1996 to ($720,026) in the fiscal
quarter ended December 28, 1997, or an increase in loss from continuing
operations of $459,136 or approximately 176%. This increase in loss was due
primarily to the start-up and overhead costs associated with the Company's two
new Grand Havana Rooms and losses from the Company's On Canon restaurant during
the fiscal quarter ended December 29, 1997. Loss from discontinued operations
was ($969,057) for the fiscal quarter ended December 29, 1996 as compared with
no such loss for the corresponding quarter in 1997, due to the one-time
discontinuance of Love's in December 1996. The Company's net loss decreased from
($1,229,947) or $(0.17) per share in the fiscal quarter ended December 29, 1996
to ($720,026) or $(0.06) per share for the fiscal quarter ended December 28,
1997. This decrease in loss was due primarily to a provision for loss from
discontinued operations of the Love's restaurant chain in December 1996, which
decrease in loss was offset in part by increased costs associated with the
Company's additional operations.
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 Grand
Havana House of Cigar locations. In order to decrease its cash expenditures in
connection with its future planned expansion activities, the Company is
currently investigating the possibility of continuing its expansion plans with
one or more joint venture partners; however, no agreements have as yet been
reached with any prospective joint venture partners, and there can be no
assurance that the Company will be able to reach any such agreements in the
future.
As a result of its expansion activities, the Company's working capital
has been continually reduced and at December 28, 1997 the Company had cash or
cash equivalents of $208,239. The Company anticipates that in connection with
continuing the operation of its currently operational Grand Havana Rooms and
Grand Havana House of Cigars as well as its future development plans with
respect to its Grand Havana Rooms and Grand Havana House of Cigars it will need
additional working capital during the next 12 months. The Company's New York
Grand Havana Room and Washington, D.C. Grand Havana Room have experienced
continuing losses since their respective openings, and the Company anticipates
that it will continue to incur substantial future losses from these two Grand
Havana Rooms until substantially more memberships are sold in each of these
clubs. The Company is currently marketing each of these clubs for use for event
parties with the goal of attracting additional members to these clubs.
In order to raise additional capital to fund its existing operations and
to develop future Grand Havana Rooms and Grand Havana House of Cigar locations,
the Company anticipates that it will seek to raise additional funds as may be
required through the sale of
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<PAGE> 10
its securities (and/or through the exercise of outstanding warrants to purchase
its securities) in the next twelve month period. In addition, the Company may
determine to reduce the exercise prices of warrants that have been previously
privately placed. During the quarter ended December 28, 1997 the Company
conducted a Regulation S offering of its common stock and warrants to purchase
its common stock, raising aggregate gross proceeds for the Company of
approximately $2,650,000 (the "Regulation S Offering"). In addition, subsequent
to the fiscal quarter ended December 28, 1997, the Company agreed to reduce the
warrant exercise price of warrants to purchase an aggregate of 1,100,000 shares
of common stock of the Company held by the finder in the Regulation S Offering,
which warrants had an original warrant exercise price of $.82 per share. The
warrant exercise price of such finder's warrants was reduced to an exercise
price of $.27 per share on condition that all of such warrants be
then-exercised. All of such warrants were exercised in mid January 1998 for
aggregate gross proceeds to the Company from such warrant exercise of
approximately $297,000.
Due to the fact that the trading price of the Company's common stock has
fallen during recent months, there can be no assurance that the Company will be
able to sell its securities in private placements on terms that are acceptable
to the Company. In addition, the Company does not currently meet the new listing
standards for maintenance of the Company's securities on Nasdaq's SmallCap
Market, which new standards will become effective in late February 1998. If the
Company is unable to comply with these criteria, the Company's securities may be
delisted from the Nasdaq SmallCap Market, which might result in the Company
having difficulty in placing its securities with prospective investors.
If the Company is unable to raise additional funds through the private
placement of its securities it may seek financing from affiliated or
unaffiliated third parties. There can be no assurance, however, that such
financing would be available to the Company when and if it is needed, or that if
available, that it will be available on terms acceptable to the Company. If the
Company is unable to place securities or obtain financing to meet its working
capital needs and to repay indebtedness as it becomes due, the Company may have
to consider such options as selling or pledging portions of its assets in order
to meet such obligations.
Substantially all of the funds raised in the Regulation S Offering, as
well as funds loaned by entities affiliated with the Company, as discussed
below, have been spent by the Company in connection with the development of the
Company's new Grand Havana Rooms and Grand Havana House of Cigar locations, as
well as for general working capital purposes and repayment of indebtedness.
At December 28, 1997 the Company owed an aggregate of $650,000 in
principal amount to United Leisure Corporation, an affiliate of the Company,
pursuant to a financing agreement dated as of February 12, 1997, as amended.
Subsequent to the quarter ended December 28, 1997 the Company repaid an
additional $125,000 in principal amount on this loan. All principal plus
unaccrued interest thereon is due on or before September 30, 1998. In addition,
as of December 28, 1997, an aggregate of $507,000 in principal amount remained
outstanding under a financing agreement with United Film Distributors, Inc., an
affiliate of the Company, the full amount of which, together with all accrued
but unpaid
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<PAGE> 11
interest thereon, is due and payable by the Company upon demand, which demand
may not be made prior to November 1, 1998. Subsequent to the quarter ended
December 28, 1997 the Company repaid an additional $200,000 in principal amount
on this loan. In addition, during the fiscal quarter ended December 28, 1997,
the Company replaced in full the $875,000 in collateral that had previously been
pledged by United Leisure Corporation on behalf of the Company to support a
letter of credit.
PART II -- OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On October 7, 1997, the Board of Directors of the Company approved and
recommended that the Company's Certificate of Amendment be amended to increase
the number of authorized shares of Common Stock of the Company from 22,000,000
to 50,000,000 (the "Amendment"). On October 7, 1997 the holders of more than a
majority of the issued and outstanding shares of Common Stock executed a Written
Consent to Corporate Action pursuant to which such holders approved the
Amendment. The Company did not solicit proxies with respect to the taking of
such action by written consent. An Information Statement with respect to the
Amendment was mailed to all of the stockholders of the Company on or about
November 20, 1997. The Amendment became effective upon the filing of such
Amendment with the Secretary of State of Delaware on December 12, 1997.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
On October 15, 1997 the Company filed a Current Report on Form 8-K with
respect to an offering pursuant to Regulation S promulgated under the Securities
Act of 1933, as amended, which offering was concluded on October 14, 1997, and
which Report on Form 8-K was amended by the filing of an Amendment to Form 8-K
on February 5, 1998.
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
GRAND HAVANA ENTERPRISES, INC.
Dated: February 12, 1998 By /s/ Harry Shuster
----------------------------------
Harry Shuster,
Chairman of the Board,
Chief Executive Officer and
Chief Financial Officer
12
<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 DECEMBER 28, 1997 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000909483
<NAME> N/A
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-28-1997
<PERIOD-START> SEP-29-1997
<PERIOD-END> DEC-28-1997
<CASH> 208,239
<SECURITIES> 0
<RECEIVABLES> 174,994
<ALLOWANCES> 0
<INVENTORY> 767,420
<CURRENT-ASSETS> 1,651,651
<PP&E> 4,588,712
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,620,031
<CURRENT-LIABILITIES> 3,747,943
<BONDS> 0
0
0
<COMMON> 117,994
<OTHER-SE> 3,754,094
<TOTAL-LIABILITY-AND-EQUITY> 7,620,031
<SALES> 1,046,737
<TOTAL-REVENUES> 1,496,285
<CGS> 544,292
<TOTAL-COSTS> 2,177,378
<OTHER-EXPENSES> 38,933
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 40,298
<INCOME-PRETAX> (681,093)
<INCOME-TAX> 0
<INCOME-CONTINUING> (720,026)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (720,026)
<EPS-PRIMARY> (.06)
<EPS-DILUTED> (.06)
</TABLE>
