<PAGE>
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 March 26, 2000
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, 3rd Floor
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 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 as of April 28, 2000
- -------------------- -------------------------------
Common Stock, par 14,174,306 shares
value $.01 per share
Transitional Small Business Disclosure Format (check one):
YES [_] NO [X]
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GRAND HAVANA ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
March 26, September 26,
2000 1999
------------- -------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 126,520 $ 94,523
Accounts receivable, net 176,996 86,030
Short-term note receivable 115,000 115,000
Inventories 436,230 435,999
Prepaid expenses 178,805 218,008
------------ ------------
TOTAL CURRENT ASSETS 1,033,551 949,560
------------ ------------
PROPERTY AND EQUIPMENT, Net of accumulated depreciation 3,525,698 3,679,983
OTHER ASSETS
Restricted cash 935,391 875,000
Due from related parties 138,364 130,001
Deposits and other assets 63,730 63,730
------------ ------------
TOTAL OTHER ASSETS 1,137,485 1,068,731
------------ ------------
TOTAL $ 5,696,734 $ 5,698,274
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable to related parties $ 1,589,155 $ 1,549,154
Bank overdraft 29,944 84,671
Accounts payable 1,012,952 1,029,301
Accrued liabilities 313,454 422,479
Deferred revenues 213,094 189,194
Due to related parties 1,501,506 1,397,648
Deferred rent payable 538,888 462,054
------------ ------------
TOTAL CURRENT LIABILITIES 5,198,993 5,134,501
------------ ------------
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 -
14,174,306 shares in 1998 and 1999 141,744 141,744
Additional paid-in capital 13,279,044 13,279,044
Accumulated deficit (12,923,047) (12,857,015)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 449,741 563,773
------------ ------------
TOTAL $ 5,696,734 $ 5,698,274
============ ============
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements
2
<PAGE>
GRAND HAVANA ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
March 26, March 28, March 26, March 28,
2000 1999 2000 1999
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
REVENUES
Food and beverage $ 1,669,903 $ 1,376,427 826,227 $ 521,200
Merchandise sales 348,205 366,987 163,165 143,114
Membership fees 960,014 768,546 497,407 323,889
Catering rental 416,734 285,930 56,072 57,266
----------- ----------- ----------- -----------
TOTAL REVENUES 3,394,856 2,797,890 1,542,871 1,045,469
----------- ----------- ----------- -----------
COSTS AND EXPENSES
Food and beverage 562,119 452,567 289,639 165,559
Merchandise 174,652 178,951 81,613 68,960
Operating expenses
Direct labor and benefits 1,023,451 1,017,306 517,635 462,129
Occupancy and other 1,208,809 1,258,746 568,737 602,459
General and administrative 178,247 531,591 63,787 268,776
Depreciation and amortization 224,233 250,434 112,117 129,015
----------- ----------- ----------- -----------
TOTAL COSTS AND EXPENSES 3,371,511 3,689,595 1,633,528 1,696,898
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE OTHER INCOME (EXPENSE) 23,345 (891,705) (90,657) (651,429)
OTHER INCOME (EXPENSE)
Interest income 24,314 15,437 13,517 3,203
Partial insurance settlement - 101,718 - 101,718
Interest expense (113,691) (94,376) (57,946) (48,330)
----------- ----------- ----------- -----------
TOTAL OTHER INCOME (EXPENSE) (89,377) 22,779 (44,429) 56,591
----------- ----------- ----------- -----------
LOSS BEFORE CUMULATIVE EFFECT OF (66,032) (868,926) (135,086) (594,838)
CHANGE IN ACCOUNTING PRINCIPLE
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE - (23,844) - -
----------- ----------- ----------- -----------
NET LOSS $ (66,032) $ (892,770) $ (135,086) $ (594,838)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 14,174,306 14,174,306 14,174,306 14,174,306
BASIC AND DILUTED LOSS PER SHARE
Loss before cumulative change in accounting principle $ (0.005) $ (0.061) $ (0.010) $ (0.042)
Cumulative effect of change in accounting principle - (0.002) - -
----------- ----------- ----------- -----------
(0.005) (0.06) (0.010) (0.042)
=========== =========== =========== ===========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements
3
<PAGE>
GRAND HAVANA ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
--------------------------------
March 26, March 28,
2000 1999
--------- ---------
(Unaudited) (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(66,032) $ 892,770
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 224,233 250,434
Amortization of deferred charges - 67,106
Changes in operating assets and liabilities:
Accounts receivable (90,966) (95,030)
Inventories (231) 94,209
Prepaid expenses 39,203 (5,042)
Pre-opening costs - 23,844
Accounts payable and other accrued liabilities (21,516) 735,729
Deferred revenues 23,900 61,465
Deferred rent payable 76,834 31,437
--------- ---------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 185,425 271,382
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (29,947) (221,940)
Due from related parties (8,363) 15,718
Collection of note receivable - 13,079
Deferred charges, deposits and other assets - (4,774)
Restricted cash (60,391) (1,301)
--------- ---------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (98,701) (199,218)
CASH FLOWS FROM FINANCING ACTIVITIES
Bank overdraft (54,727) (89,083)
Due from related parties - 83,145
--------- ---------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (54,727) (5,938)
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 31,997 66,226
CASH AND CASH EQUIVALENTS, beginning of period 94,523 95,344
--------- ---------
CASH AND CASH EQUIVALENTS, end of period $126,520 $ 161,570
========= =========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements
4
<PAGE>
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 statements of (a) the consolidated
condensed results of operations for the three and six months ended March
26, 2000, (b) the consolidated condensed financial position at March 26,
2000 and September 26, 1999 and (c) the consolidated condensed cash flows
for the six months ended March 26, 2000 and March 28, 1999. Interim results
are not necessarily indicative of the results for a full year.
The consolidated balance sheet presented as of September 26, 1999 has been
derived from the consolidated financial statements that have been audited
by the Company's independent auditors. 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. CHANGE IN ACCOUNTING PRINCIPLE
The Company changed its method of accounting for pre-operating cost to
conform with new requirements of Statement of Position ("SOP") No. 98-5
"Reporting on the Costs of Start-Up Activities". This Statement requires
that costs of start-up activities, including organization costs, be
expensed as incurred. Initial application of this SOP should be reported as
the cumulative effect of a change in accounting principle as described in
APB Opinion No. 20 "Accounting Changes".
3. Portion of revenues from food and beverage for three months ended March 28,
1999 has been reclassified to catering rental to conform to 2000
presentation.
5
<PAGE>
OVERVIEW
The following discussion should be read in conjunction with the Company's
consolidated financial statements and the notes thereto appearing elsewhere in
this Quarterly Report on Form 10-QSB. Certain statements contained herein that
are not related to historical results, including, without limitation, statements
regarding the Company's business strategy and objectives, future financial
position and estimated cost savings, are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act") and Section 21E of the Securities Exchange Act, as amended
(the "Exchange Act"), and involve risks and uncertainties. Although the Company
believes that the assumptions on which these forward-looking statements are
based are reasonable, there can be no assurance that such assumptions will prove
to be accurate and actual results could differ materially from those discussed
in the forward-looking statements. Factors that could cause or contribute to
such differences include, but are not limited to, risks and uncertainties
associated with the ability to obtain adequate working capital on terms
favorable to the Company, compliance with regulatory requirements, the Company's
ability to sell more memberships, a decline in public consumption of cigars and
other tobacco products, significant increases in excise taxes which could
substantially increase the price of cigars and general economic factors. All
forward-looking statements contained in this Quarterly Report on Form 10-QSB are
qualified in their entirety by this statement.
Grand Havana Enterprises, Inc. (the "Company" or "Registrant") is engaged
in the business of the ownership and operation of private membership restaurants
and cigar clubs known as "Grand Havana Rooms," and in the ownership and
operation of retail cigar stores known as "Grand Havana House of Cigars." Unless
the context otherwise indicates, the "Company" means Grand Havana Enterprises,
Inc. and its consolidated subsidiaries.
The Company currently owns and operates two Grand Havana Rooms, one in
Beverly Hills, California, which opened in June 1995 and one in New York, New
York, which opened in May 1997. The Company formerly operated a third Grand
Havana Room and House of Cigars in Washington, D.C. That location was closed in
February 1999 and substantially all of the assets were sold. In addition, the
Company currently owns and operates two Grand Havana House of Cigars locations,
one in Beverly Hills, California, which opened in December 1997 and one in Las
Vegas, Nevada, which opened in November 1997. The Company's primary business
focus is on operating its existing cigar clubs and retail stores.
For the quarter ended March 26, 2000, the Company had a net loss of
($135,086) compared to a net loss of ($594,838) for the fiscal quarter ended
March 28, 1999. This improvement is attributable primarily to three factors: (1)
increases in membership fees due, in part, to the adoption of the new "social"
membership plan, (2) increases in revenues as a result of increased member
activity, and (3) reductions in costs from the closure of the Washington, D.C.,
Grand Havana Room and House of Cigars. A social member is permitted to use the
club's dining facilities but does not have a locker or humidor. Although the
social members pay less in initial and
6
<PAGE>
monthly membership fees, the Company receives additional revenue from the
increased use of its facilities.
The two House of Cigars locations are still experiencing operating losses.
The Las Vegas House of Cigars location had an operating loss of ($7,091) for
the quarter ending March 26, 2000 and the Beverly Hills House of Cigars had
an operating loss of ($6,454) for the same period.
The Company was incorporated under the laws of the State of Delaware on
April 13, 1993, under the name "United Restaurants, Inc." The Company was
originally formed in order to acquire all of the capital stock of Love's
Enterprises, Inc. ("LEI"), which company was the franchisor, owner and operator
of the Love's restaurant chain. The Company acquired the stock of LEI 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, which plan was completed in July 1998.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 26, 2000 COMPARED TO THREE MONTHS ENDED MARCH 28, 1999
REVENUES
The Company derives revenues from continuing operations from four principal
sources: (1) food and beverage sales, (2) sales of cigars and related
merchandise, (3) membership fees, and (4) catering rentals. During the fiscal
quarter ended March 26, 2000, the Company had revenues of $1,542,871 compared
to revenues of $1,045,469 for the fiscal quarter ended March 28, 1999, an
increase of $497,402 or approximately 48%. This increase in revenues is
primarily due to the increase in revenues from membership fees and food and
beverage sales.
Food and Beverage. Revenue from food and beverage increased from $521,200
in the fiscal quarter ended March 28, 1999 to $826,227 in the fiscal quarter
ended March 26, 2000, an increase of $305,027 or approximately 59%. This
increase is primarily attributable to an increase in membership and increase in
members' use of the Company's facilities.
Merchandise Sales. Revenue from merchandise sales increased from $143,114
in the fiscal quarter ended March 28, 1999 to $163,165 in the fiscal quarter
ended March 26, 2000, an increase of $20,051 or approximately 14%. This increase
is principally due to an increase in membership and an increase in members' use
of the Company's facilities.
Membership Fees. Revenue from membership fees increased from $323,889 in
the fiscal quarter ended March 28, 1999 to $497,407 in the fiscal quarter ended
March 26, 2000, an increase of $173,518 or approximately 54%. This is primarily
a result of an increase in membership fees due in part to the adoption of a new
membership plan. The New York Grand Havana Room has approximately 25% of its
regular memberships available for sale.
Catering Rental. Revenue from catering rental decreased from $57,266 in the
fiscal quarter ended March 28, 1999 to $56,072 in the fiscal quarter ended March
26, 2000 a decrease of $1,154 or approximately 2%.
COSTS AND EXPENSES
During the fiscal quarter ended March 26, 2000 the Company incurred total
costs and expenses of $1,633,528 compared to $1,696,898 for the fiscal quarter
ended March 28, 1999, a decrease of $63,370 or approximately 4%.
7
<PAGE>
Food and Beverage. During the quarter ended March 26, 2000, food and
beverage expenses were $289,639, an increase of $124,080 or 75% over food and
beverage expenses for the quarter ended March 28, 1999. This increase was
attributable to an increase in membership and an increase in members' use of the
Company's facilities.
Merchandise. During the quarter ended March 26, 2000, merchandise
expenses were $81,613, an increase of $12,653 or 18% over merchandise expenses
for the quarter ended March 28, 1999. This decrease was attributable to higher
merchandise sales.
Operating Expenses. During the quarter ended March 26, 2000, operating
expenses were $1,086,372, an increase of $21,784 or 2% over operating expenses
for the quarter ended March 28, 1999. This increase was attributable to an
increase in membership and an increase in members' use of the Company's
facilities.
Depreciation and Amortization. Depreciation and amortization expenses
decreased by approximately 13% from $129,015 in the fiscal quarter ended March
28, 1999 to $112,117 in the fiscal quarter ended March 26, 2000.
General and Administrative. General and administrative expenses
decreased by approximately 76% from $268,776 in the fiscal quarter ended March
28, 1999 to $63,787 in the fiscal quarter ended March 26, 2000. This figure
reflects decreases due to the imposition of more efficient operations and better
controls at the locations and the Company's effort to reduce overhead. Increased
excise taxes on cigars have not yet had a material effect on the Company's
profits.
NET LOSS
The Company experienced a net loss of ($135,086) or ($0.01) per share for
the fiscal quarter ended March 26, 2000, compared to a net loss of ($594,838) or
($0.042) per share for the fiscal quarter ended March 28, 1999, a decrease of
$459,752 or approximately 77%.
SIX MONTHS ENDED MARCH 26, 2000 COMPARED TO SIX MONTHS ENDED MARCH 28, 1999
REVENUES
During the six months ended March 26, 2000, the Company had revenues of
$3,394,856 compared to revenues of $2,797,890 for the six months ended March 28,
1999, an increase of $596,966 or approximately 21%. This increase in revenues is
primarily due to the increase in revenues from catering rentals and membership
fees.
Food and Beverage. Revenue from food and beverage increased from
$1,376,427 in the six months ended March 28, 1999 to $1,669,903 in the six
months ended March 26, 2000, an increase of $293,476 or approximately 21%. This
increase is primarily attributable to an increase in membership and an increase
in members' use of the Company's facilities.
Merchandise Sales. Revenue from merchandise sales decreased from $366,987
in the six months ended March 28, 1999 to $346,205 in the six months ended March
26, 2000, a decrease of $20,782 or approximately 6%.
Membership Fees. Revenue from membership fees increased from $768,546 in
the six months ended March 28, 1999 to $960,014 in the six months ended March
26, 2000, an increase of $191,468 or approximately 25%. This is primarily due to
an increase in membership and an increase in members' use of the Company's
facilities.
Catering Rental. Revenue from catering rental increased from $285,930 in
the six months ended March 28, 1999 to $416,734 in the six months ended March
26, 2000 an increase of $130,804 or approximately 46%. This increase was a
result of an increase in private parties, mostly at the New York Grand Havana
Room.
COSTS AND EXPENSES
During the six months ended March 26, 2000 the Company incurred
8
<PAGE>
total costs and expenses of $3,371,511 compared to $3,689,595 for the six months
ended March 28, 1999, a decrease of $318,084 or approximately 9%. This decrease
is primarily due to decreases in general and administrative costs resulting from
the closure of the Washington, D.C. Grand Havana Room and House of Cigars. This
figure also reflects decreases due to the imposition of more efficient
operations and better controls at the locations and the Company's effort to
reduce overhead.
Food and Beverage. During the six months ended March 26, 2000, food and
beverage expenses were $562,119, an increase of $109,552 or 24% over food and
beverage expenses for the six months ended March 28, 1999. This increase was
attributable to an increase in membership and an increase in members' use of the
Company's facilities.
Merchandise. During the six months ended March 26, 2000, merchandise
expenses were $174,652, a decrease of $4,299 or 2% over merchandise expenses for
the six months ended March 28, 1999. This decrease was attributable to a
decrease in merchandise sales.
Operating Expenses. During the quarter ended March 26, 2000, operating
expenses were $2,232,260, a decrease of $43,792 or 2% over operating expenses
for the six months ended March 28, 1999. This decrease was attributable to an
increase in membership and an increase in members' use of the Company's
facilities.
Depreciation and Amortization. Depreciation and amortization expenses
decreased by approximately 10% from $250,434 in the six months ended March 28,
1999 to $224,233 in the six months ended March 26, 2000.
General and Administrative. General and administrative expenses
decreased by approximately 66% from $531,591 in the six months ended March 28,
1999 to $178,247 in the six months ended March 26, 2000. Increased excise taxes
on cigars have not yet had a material effect on the Company's profits.
NET LOSS
The Company experienced a net loss of ($66,032) or ($0.005) per share
for the six months ended March 26, 2000, compared to a net loss of ($892,770) or
($0.0063) per share for the six months ended March 28, 1999, a decrease of
$778,738 or approximately 87%.
LIQUIDITY AND CAPITAL RESOURCES
At March 26, 2000, the Company had cash or cash equivalents of $126,520.
On August 15, 1998, Harry Shuster, former Chairman of the Board,
President, Chief Executive Officer and director of the Company and the father of
Stanley Shuster, the current Chairman of the Board, President, Chief Executive
Officer, Chief Financial Officer, Executive Vice President, director and
principal stockholder of the Company, agreed to lend the Company $300,000. The
Company
9
<PAGE>
delivered to Harry Shuster its secured promissory note dated August 15, 1998
(the "Shuster Note"). The Shuster Note bears interest at 10% per annum. Its due
date has been extended by agreement with Harry Shuster to July 31, 2000. The
Shuster Note is secured by a second lien security interest in certain
collateral. As of March 26, 2000, the entire principal amount of the Shuster
Note, $300,000, remained outstanding. As of March 26, 2000, the Company is
indebted to Harry Shuster in the amount of $1,044,869 for amounts due under the
Shuster Note and for advances made from time to time by Harry Shuster to the
Company.
On September 30, 1998, United Leisure Corporation, a publicly-held company
located in Irvine, California ("United Leisure") agreed to make a new
installment loan to the Company in the amount of up to $1,250,000 in replacement
of the previous loan between United Leisure and the Company. The Company
executed a Secured Promissory Note dated September 30, 1998 (the "Promissory
Note"). The Promissory Note provides that United Leisure may from time to time,
but shall not be obligated to, make future advances up to a total amount of
$1,250,000. The Promissory Note is secured by a first lien security interest in
certain collateral. The Promissory Note's due date has been extended to July
31, 2000. At March 26, 2000 the Company owed an aggregate of $682,155 to
United Leisure under the Promissory Note. Stanley Shuster, the current Chairman
of the Board, President, Chief Executive Officer, Chief Financial Officer,
Executive Vice President, director and principal stockholder of the Company, is
the brother of Brian Shuster, the President of United Leisure.
In addition, as of March 26, 2000, 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 interest thereon, is due and payable by the
Company upon demand, which demand could not be made prior to November 1, 1998.
Stanley Shuster, the current Chairman of the Board, President, Chief Executive
Officer, Chief Financial Officer, Executive Vice President, director and
principal stockholder of the Company, is the brother of Brian Shuster, the
President of United Film Distributors, Inc.
The Company believes that it will meet its working capital needs, in the
current fiscal year, from the operations of its Grand Havana Rooms and Grand
Havana House of Cigars locations. Due to the fact that the trading price of the
Company's Common Stock has remained low in the last twelve months and because it
is currently trading on the OTC Bulletin Board, the Company does not anticipate
that it will be able to sell its securities in private placements on terms that
are acceptable to the Company for the foreseeable future. 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 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.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended March 26,
2000.
10
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
GRAND HAVANA ENTERPRISES, INC.
Date: May 15, 2000 /s/ Stanley Shuster
--------------------------------------------
Stanley Shuster
Chief Executive Officer, and Chief Financial
Officer
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED MARCH 26,
2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-24-2000
<PERIOD-START> DEC-26-1999
<PERIOD-END> MAR-26-2000
<CASH> 126,520
<SECURITIES> 0
<RECEIVABLES> 186,271
<ALLOWANCES> 9,275
<INVENTORY> 436,230
<CURRENT-ASSETS> 1,033,551
<PP&E> 3,525,698
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,696,734
<CURRENT-LIABILITIES> 5,246,993
<BONDS> 0
0
0
<COMMON> 141,744
<OTHER-SE> 307,997
<TOTAL-LIABILITY-AND-EQUITY> 5,696,734
<SALES> 2,978,122
<TOTAL-REVENUES> 3,394,856
<CGS> 2,969,031
<TOTAL-COSTS> 3,419,511
<OTHER-EXPENSES> (89,377)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 113,691
<INCOME-PRETAX> (114,032)
<INCOME-TAX> 0
<INCOME-CONTINUING> (114,032)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (114,032)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
