<PAGE> 1
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-6683
SONOMA INTERNATIONAL
(Exact name of small business issuer as specified in its charter)
<TABLE>
<C> <C>
NEVADA 94-0880052
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
3000 LEXINGTON FINANCIAL CENTER 40507
LEXINGTON, KY. (Zip Code)
(Address of principal executive offices)
</TABLE>
(606) 281-0000
(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
YES [X] NO [ ]
As of March 31, 1997, there were 2,300,000 shares of the issuer's common stock,
par value $0.001, outstanding.
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<PAGE> 2
PART I -- FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets at December 31, 1996 (Unaudited)
and March 31, 1977.......................................... 2
Consolidated Statements of Operations for the Three Months
Ended March 31, 1997 and 1996 (Unaudited)................... 3
Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 1996 and 1997 (unaudited)................... 4
Notes to Consolidated Financial Statements (Unaudited)......... 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS...................... 6
PART II -- OTHER INFORMATION
ITEM 5. OTHER INFORMATION........................................ 9
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K......................... 9
SIGNATURES............................................. 9
</TABLE>
<PAGE> 3
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SONOMA INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1996 AND MARCH 31, 1997
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1996 1997
------------ ------------
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS
Cash...................................................... $ 104,353 $ 27,813
Escrow funds.............................................. 88,400 68,459
Receivables:
Trade (net of allowance for doubtful accounts of $3,876
for each period)....................................... 54,492 75,987
Other................................................... 27,008 27,601
Inventory................................................. 85,668 99,011
Prepaid expenses.......................................... 17,651 57,874
----------- -----------
Total current assets................................ 377,572 356,745
----------- -----------
PROPERTY AND EQUIPMENT
Buildings and improvements................................ 2,599,885 2,620,644
Land...................................................... 3,150,000 3,150,000
Land improvements......................................... 293,831 293,831
Docks and floating buildings.............................. 8,220,250 8,222,794
Boats and improvements.................................... 2,116,453 2,133,125
Furnishings, fixtures and equipment....................... 1,692,566 1,660,532
Computers under capital lease............................. 193,171 194,294
Fuel tanks and containment buildings...................... 151,132 151,132
Vehicles.................................................. 22,482 22,482
Construction in progress.................................. 140,178 265,245
----------- -----------
18,579,948 18,714,079
----------- -----------
Less accumulated depreciation and amortization.............. 4,537,677 4,713,223
----------- -----------
Net property and equipment.................................. 14,042,271 14,000,856
----------- -----------
OTHER ASSETS
Deferred loan fees, net of accumulated amortization of
$77,593 and $98,132..................................... 322,858 302,742
Goodwill, net of accumulated amortization of $184,250 and
$188,856................................................ 1,006,310 1,001,704
Deferred offering costs................................... 336,632 492,632
----------- -----------
Total other assets.................................. 1,665,800 1,797,078
----------- -----------
TOTAL ASSETS................................................ $16,085,643 $16,154,679
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Current portion of long-term debt (including $4,052,778
and 4,168,787 to related parties)....................... $ 4,395,941 $ 4,585,330
Accounts payable.......................................... 453,522 589,408
Accrued interest (including $57,240 and 124,641 to related
parties)................................................ 150,733 224,686
Accrued liabilities....................................... 299,802 260,253
Security deposits......................................... 49,319 192,656
Deferred revenue.......................................... 696,622 745,358
Payable to related party.................................. 53,200 --
----------- -----------
Total current liabilities........................... 6,099,139 6,597,691
----------- -----------
LONG-TERM LIABILITIES
Long-term debt, less current maturities (including
$114,830 in 1996 due to related parties)................ 10,263,786 10,166,773
----------- -----------
Total long-term liabilities......................... 10,263,786 10,166,773
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT
Common stock, $0.001 par value; authorized 20,000,000;
issued and outstanding shares 2,300,000................. 2,300 2,300
Additional paid-in capital................................ 1,392,346 1,392,346
Accumulated deficit....................................... (1,671,928) (2,004,431)
----------- -----------
Total stockholders' deficit......................... (277,282) (609,785)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT................. $16,085,643 $16,154,679
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE> 4
SONOMA INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996 AND 1997
<TABLE>
<CAPTION>
1996 1997
---------- ---------
(UNAUDITED)
<S> <C> <C>
REVENUES
Slip fees................................................. $ 288,667 $ 432,815
Boat rental............................................... -- 46
Lodge..................................................... 29,644 30,969
Fuel...................................................... 912 394,306
Convenience store and merchandise......................... 61 6,622
Restaurant................................................ 2,592 4,101
Other..................................................... 166 25,258
---------- ---------
Total revenues.................................... 322,042 894,117
---------- ---------
COST OF REVENUES
Slip...................................................... 21,101 27,618
Boat rental............................................... 31,015 19,130
Lodge..................................................... 41,377 30,918
Fuel...................................................... 1,117 273,178
Convenience store and merchandise......................... 1,258 3,116
Restaurant................................................ 4,450 5,943
Other..................................................... 33,051 49,936
---------- ---------
Total cost of revenues............................ 133,369 409,839
---------- ---------
GROSS PROFIT................................................ 188,673 484,278
SELLING, GENERAL AND ADMINISTRATIVE (including related
party amounts for management and guarantee fees of
$21,100 and $-0-)...................................... 251,279 307,199
DEPRECIATION AND AMORTIZATION............................... 74,911 182,182
---------- ---------
INCOME (LOSS) FROM OPERATIONS............................... 137,517 (5,103)
INTEREST EXPENSE (including interest to related parties of
$66,300 and $76,848)................................... 216,163 327,398
---------- ---------
NET LOSS BEFORE INCOME TAXES AND EXTRAORDINARY ITEMS........ (353,680) (332,501)
Income taxes........................................... -- --
---------- ---------
NET LOSS BEFORE EXTRAORDINARY ITEMS......................... (353,680) (332,501)
EXTRAORDINARY ITEMS
Gain on extinguishment of debt, net of income tax of $0... 2,518,486 --
---------- ---------
NET INCOME (LOSS)........................................... $2,164,806 $(332,501)
========== =========
Net (loss) per common share before extraordinary items...... $ (0.26) $ (0.14)
========== =========
Net income (loss) per common share.......................... $ 1.58 $ (0.14)
========== =========
Weighted average shares outstanding......................... 1,369,025 2,300,000
========== =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE> 5
SONOMA INTERNATIONAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1996 AND 1997
<TABLE>
<CAPTION>
1996 1997
----------- ---------
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)......................................... $ 2,164,806 $(332,501)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization of fixed assets.......... 124,307 156,838
Amortization of goodwill............................... 26,403 25,344
Deferred income taxes.................................. -- --
Amortization of deferred gain on sale leaseback........ (75,800) --
Gain on debt extinguishment............................ (2,518,486) --
Changes in assets and liabilities (net of
acquisitions):
Decrease (increase) in escrow funds.................. 18,558 19,941
Decrease (increase) in trade receivables............. (142,165) (21,495)
Decrease (increase) in other receivables............. 30,444 (594)
Decrease (increase) in inventory..................... (27,398) (13,343)
Decrease (increase) in prepaid expenses.............. 7,048 (40,223)
Increase (decrease) in accounts payable.............. 206,038 135,886
Increase (decrease) in accrued interest.............. (248,440) 73,953
Increase (decrease) in accrued liabilities........... 878 (39,549)
Increase (decrease) in security deposits............. 164,174 143,137
Increase (decrease) in related party loan............ -- (53,200)
Increase (decrease) in deferred revenue.............. 147,042 48,737
Increase (decrease) in accrued guarantee fees........ 5,000 --
Increase (decrease) in accrued management fees....... 20,092 --
----------- ---------
Net cash provided (used) by operating
activities...................................... (97,499) 102,931
----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment....................... (72,634) (134,131)
----------- ---------
Net cash used by investing activities............. (72,634) (134,131)
----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bank and related party loans................ 7,183,976 189,391
Repayments of borrowings.................................. (6,114,216) (97,014)
Repayments of obligation under capital lease.............. (616,029) --
Debt financing costs and other deferred costs............. (283,295) (137,717)
----------- ---------
Net cash provided (used) by financing
activities...................................... 170,436 (45,340)
----------- ---------
NET INCREASE (DECREASE) IN CASH............................. 303 (76,540)
Cash at beginning of the period........................... 9,628 104,353
----------- ---------
Cash at end of the period................................. $ 9,931 $ 27,813
=========== =========
SUPPLEMENTAL DISCLOSURES
Cash paid during the period for interest.................. $ 354,060 $ 255,957
=========== =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE> 6
SONOMA INTERNATIONAL AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1996 AND 1997 (UNAUDITED)
NOTE A -- ORGANIZATION
Sonoma Quicksilver Mines, Inc., a public company, was incorporated under
the laws of the State of Nevada on June 10, 1940. The name was subsequently
changed to Sonoma International ("Sonoma"). Sonoma had several failed business
operations and since 1988 its only activity had been to search for a company or
assets to acquire.
September 12, 1996, Sonoma entered into an agreement (the "Agreement") with
Clear Creek Investments, LLC, a Kentucky Limited Liability Company ("Clear
Creek") and owner of the general partner of Jamestown Resort & Marina, LTD
("Jamestown"), and holders of the limited partnership interests in Jamestown.
The Agreement required the transfer and assignment to Sonoma of Jamestown's
general partner and all limited partnership interests. The Agreement, effective
on December 9, 1996, incorporates the payment of the preference payments due
(Note I) through the issuance of shares of Sonoma. In addition, the Agreement
required that Sonoma effect a one for two hundred reverse split (and increase
authorized shares to 20,000,000 (post split)), leaving 300,000 shares issued and
outstanding, and issue 1,700,000 shares to Clear Creek and affiliated and
related entities or individuals for the acquisition of Jamestown. The
consolidated financial statements including all references to the number of
shares of common stock and all per share information have been adjusted to
reflect the common stock reverse split and the revised authorized number of
shares on a retroactive basis.
October 31, 1996, Key West Conch Harbor, Inc. ("Key West"), by consent of
its shareholders, entered into an agreement (the "Agreement") with Sonoma. The
Agreement required the transfer and assignment to Sonoma of all of the common
stock of Key West in exchange for 300,000 shares of common stock of Sonoma and a
demand note for $175,000. The transaction was completed effective December 9,
1996.
For accounting purposes, as the Jamestown Limited partners and general
partner end up with the majority of Sonoma's stock, the acquisition by Sonoma of
all of the Jamestown limited partnership interests and general partnership
interest was accounted for as a recapitalization of Jamestown with Jamestown as
the acquirer (a reverse acquisition). Accordingly, the financial statements
prior to the acquisition of Sonoma and Key West included herein are those of
Jamestown. The transaction with Key West was accounted for using the purchase
method. The results of operations of Key West and Sonoma have been included in
the consolidated statements of operations from the acquisition dates.
Jamestown was formed as a limited partnership organized under the laws of
the State of Kentucky by Jamestown Resort & Marina, Inc., the general partner,
on November 1, 1987. It owns a resort and marina facility near Jamestown,
Kentucky on Lake Cumberland.
Key West was incorporated in the State of Florida on December 23, 1993 for
the purposes of acquiring, developing, and operating a marina facility in Key
West, Florida.
NOTE B -- INTERIM INFORMATION
Interim information is unaudited; however, in the opinion of the Company's
management, all adjustments necessary for a fair statement of interim results
have been included in accordance with Generally Accepted Accounting Principles.
All adjustments are of a normal recurring nature. The results for interim
periods are not necessarily indicative of results to be expected for the entire
year. These financial statements and notes should be read in conjunction with
the Company's annual consolidated financial statements and the notes thereto for
the fiscal year ended December 31, 1996.
5
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following is a discussion of the consolidated financial condition and
results of operations of the Company for the three months ended March 31, 1996
and 1997. This discussion should be read in conjunction with the consolidated
financial statements of the Company. In addition, this discussion contains
forward-looking statements. Such statements reflect the current views of the
Company with respect to future events and are subject to certain risks,
uncertainties and assumptions, including, but not limited to, the risk factors
described in Amendment No. 2 to its Form SB-2. Should one or more of these risks
or uncertainties materialize, or should the underlying assumptions prove to be
incorrect, actual results may vary materially from those described herein.
OVERVIEW
Although the Company was formed in 1940, it has not had material operations
since 1988. Between 1988 and 1994 the Company's directors restructured the
Company with the purpose of making the Company attractive to potential merger or
acquisition candidates. In 1994 the Company began in earnest to search for
acquisition or merger candidates which would restore Sonoma to an operating
entity and in September 1996 entered into an agreement with the general partner
of Jamestown Resort & Marina, Ltd. to acquire all the capital stock of Jamestown
Resort & Marina, Inc. and a similar agreement with the limited partners to
acquire all of the limited partnership units in return for Common Stock. The
Company also entered into a similar agreement with stockholders of Key West
Conch Harbor, Inc. in October 1996 to acquire all of the outstanding common
stock of Key West in return for Common Stock. Both the Jamestown and Key West
acquisition transactions were closed on December 9, 1996.
For accounting purposes, as the Jamestown Limited Partners and its General
Partner end up with the majority of Sonoma's stock, the acquisition by Sonoma of
all of the limited partnership interests and general partnership interest was
accounted for as a recapitalization of Jamestown with Jamestown as the acquirer
(a reverse acquisition). Accordingly, the financial statements prior to the
acquisition of Sonoma and Key West included herein are those of Jamestown. The
transaction with Key West was accounted for using the purchase method. The
results of operations of Key West and Sonoma have been included in the
consolidated statements of operations from the acquisition dates.
THREE MONTHS ENDED MARCH 31, 1996 COMPARED WITH THE THREE MONTHS ENDED MARCH
31, 1997
REVENUES
Revenues for the three months ended March 31, 1997 increased $572,075 or
178% from the same period in 1996. On December 9, 1996, Sonoma acquired Key West
and accordingly revenues for the three months ended March 31, 1996 do not
include Key West operations which total $538,373 in 1997. If Key West revenue is
excluded, Jamestown revenues increased for the three months ended March 31, 1997
over 1996 by $33,702 or 9%. Slip rentals increased by $22,821 over the three
months ended March 31, 1996 as a result of a 5% rate increase and increased
occupancy.
Slip rental fee rates increased by 5% for the 1997 calendar year at
Jamestown. Additional revenues are expected in 1997 due to a change in
management's marketing strategy by focusing on attracting tour groups and
conventions during the off boating season. The largest impact of this marketing
focus will be to increase lodging rentals.
COST OF REVENUES
During the three months ended March 31, 1997, cost of revenues decreased
$16,754 (excluding the Key West costs of revenues of $293,224). Excluding the
effect of Key West, the decrease in cost of revenues was 13%. The primary reason
for the decline in 1996 cost of revenues was a decrease of $11,885 due to major
repairs and maintenance in the rental boat department incurred in 1996. Cost of
revenues as a percentage of revenues increased from 41% for the three months
ended March 31, 1996 to 46% compared to the same period in 1997. The increase is
the result of higher fuel costs of revenues at the Key West facility.
6
<PAGE> 8
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses increased $55,920 or 22% over
1996 to $307,199. Included in this increase are $51,360 attributed to Key West
operations for three months ended March 31, 1997. Jamestown's increased
marketing efforts resulted in $8,623 of the increase. Administrative staff added
at the Sonoma level amount to $32,213 of the increase. The offset was mainly due
to decreases in other administrative costs at Jamestown.
As a result of Sonoma now providing management services to its
subsidiaries, Jamestown will not incur certain management fees in the future,
which amounted to approximately $17,787 for the three months ended March 31,
1996. This reduction at Jamestown is off set by an increase in management and
administrative salaries of approximately the same amount at Sonoma.
INTEREST EXPENSE
Interest expense increased from $216,163 for the three months ended March
31, 1996 to $327,398 for the three months ended March 31, 1997. The increase of
$111,235 was due to an increase of $92,276 related to debt assumed as a result
of the Key West acquisition, with the majority of the remaining difference due
to increases in interest rates resulting from the refinancing of certain debt in
January 1996. Interest expense is expected to decrease to approximately $915,000
(on an annual basis) in 1997 after paying off approximately $5,168,000 of debt
with the proceeds from the Offering.
GAIN ON REDUCTION OF OBLIGATIONS
In January 1996 the Company refinanced its primary debt resulting in an
extraordinary gain of $2,518,486 (net of income taxes of zero).
DEPRECIATION AND AMORTIZATION
Depreciation and amortization expenses increased $107,272 or 143% to
$182,182 for the comparable three months from 1996 to 1997. This increase was
primarily due to an increase in the amortization of deferred costs related to
the loan refinancing in January, 1996. The increase was partially offset by a
decrease in depreciation of fixed assets which are fully depreciated.
LIQUIDITY AND CAPITAL RESOURCES
The Company refinanced Jamestown's primary debt in January 1996 which
resulted in a reduction of indebtedness of approximately $2,518,000. The Company
believes this reduction and related decrease in interest payments has increased
cash available for operations and debt servicing.
Negative working capital at December 31, 1996 was $5,721,567 as compared to
negative working capital at March 31, 1997 of $6,240,945. The Company believes
that the net proceeds from the Offering will provide $14,700,000 in funds. Of
these proceeds, approximately $4,002,000 and $786,535 will reduce the secondary
debt of Jamestown and Key West, respectively. This will result in an increase of
working capital of approximately $14,123,000. The reduction of this debt will
further decrease interest payments and will increase cash available for
operations. The remaining funds will be used to satisfy the Company's capital
expansion, working capital requirements and future acquisitions. The Company
believes that the net proceeds from the Offering and cash provided by operating
activities will be sufficient to fund its operations through 1998. During early
1997, the construction of additional slips and other minor dock improvements
were completed by Key West.
The Company has a mortgage note amounting to $6,195,587 at March 31, 1997
on the Jamestown property with an interest rate of 4 1/4% over the commercial
paper lending rate. The mortgage matures on February 1, 2001 and requires
monthly payments of approximately $72,000 until maturity. These payments include
$8,000 per month for deposit into a property tax and capital improvement escrow
account. The Company has a mortgage note amounting to $3,224,185 on the Key West
property with an interest rate of 9%. The mortgage matures on April 1, 2016 and
requires monthly payments of approximately $30,000 during 1997. The Company has
a note payable of $1,852,777 with a related party with an interest rate of
1 1/2% over the prime lending rate, which is due on demand, and is expected to
be paid off from the offering proceeds.
The Company currently does not have a line of credit.
7
<PAGE> 9
Cash flows used by operations were $97,499 in 1996, compared to cash flow
provided by operations of $102,931 in 1997. This increase was due to a number of
factors, but was significantly affected by deferral of payment of accrued
interest, which was offset by a combination of a number of other items. Cash
used in investing activities of $72,634 in 1996 and $134,131 in 1997 was
primarily to purchase property and equipment and for facility expansion. The
increase in 1997 was primarily due to expansion of the Key West facility. Cash
provided by financing activities was $170,436 in 1996 compared to cash used of
45,340 in 1997. During the three month ended March 31, 1996, the Company
borrowed $7,183,976 from and repaid $6,114,216 to various entities. Repayments
to affiliates during the three month period ended 1996 amounted to $490,000.
Included in this amount was a refinancing amount totaling $6,300,000 related to
the Jamestown debt refinancing in January 1996. In addition, the Company repaid
$616,029 of obligations under capital leases and incurred $237,332 in
refinancing costs. During 1997, the Company borrowed $189,391 from and repaid
$97,014 to various other entities.
Management believes that the current facilities at Jamestown and Key West
are in excellent condition and will not require substantial capital renovations
in the near term.
The Company has identified some potential acquisition candidates but has
not entered into any negotiations, nor does it currently have plans to make any
specific acquisitions. It is the intention of management to seek viable
acquisitions and in the event a candidate is identified, the Company would,
depending on the size of the target company and other factors, consider using
the proceeds from the Offering or bank borrowings.
There can be no assurance that the Offering will be successful or that the
Company's operations will ever be profitable, nor can there be any assurance
that the Company will not require additional equity or debt financing in the
near future, and if needed, it will be available on terms satisfactory to the
Company or at all.
SEASONALITY
Jamestown's business is seasonal in nature with the peak boating season
falling in June, July and August. These months historically have accounted for
approximately 57.5% of the yearly revenue. The impact on liquidity and capital
resources of this seasonality is reduced by incentives offered to slip customers
to pre-pay their annual fees during the fall and winter seasons when the suites,
cabins and pontoon boats are not materially used. In addition, management
believes the seasonal nature of Jamestown will be positively impacted by the
increased marketing efforts to provide off season tours and conventions.
Key West operations are impacted slightly by seasonality since boating
activity increases during the winter months due to winter vacations. However,
the majority of the business is commercial fuel sales which is not seasonal.
8
<PAGE> 10
PART II
OTHER INFORMATION
ITEM 5. OTHER INFORMATION.
The Company filed a registration with the Commission on Form SB-2 on
January 21, 1997. The Company continues to be involved in the registration
process and recently filed Amendment No. 2 to its Form SB-2 on April 17, 1997.
Sonoma International's Amendment No. 2 to Form SB-2 as filed on April 17, 1997
is incorporated by reference herein.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
A. Exhibits
27.1 Financial Data Schedule filed herein
B. Form 8-K
No reports on Form 8-K were filed in the quarterly period covered by this
report.
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.
Sonoma International
Dated: May 15, 1997 By /s/ JAMES L. FRYE
-----------------------------------
James L. Frye,
Chief Executive Officer
Dated: May 15, 1997 By /s/ PETER SACKMANN
-----------------------------------
Peter Sackmann,
Chief Financial Officer
<PAGE> 11
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
27.1 -- Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SONOMA
INTERNATIONAL'S FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS IN SONOMA INTERNATIONAL'S FORM 10-QSB AS FILED WITH
THE COMMISSION ON MAY 15, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-1-1997
<PERIOD-END> MAR-31-1997
<CASH> 27,813
<SECURITIES> 0
<RECEIVABLES> 75,987
<ALLOWANCES> 0
<INVENTORY> 99,011
<CURRENT-ASSETS> 356,745
<PP&E> 18,714,079
<DEPRECIATION> (4,713,223)
<TOTAL-ASSETS> 16,154,679
<CURRENT-LIABILITIES> 6,597,690
<BONDS> 0
0
0
<COMMON> 2,300
<OTHER-SE> (612,085)
<TOTAL-LIABILITY-AND-EQUITY> 16,154,679
<SALES> 894,117
<TOTAL-REVENUES> 894,117
<CGS> 409,839
<TOTAL-COSTS> 409,839
<OTHER-EXPENSES> 489,381
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 327,398
<INCOME-PRETAX> (332,501)
<INCOME-TAX> 0
<INCOME-CONTINUING> (332,501)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (332,501)
<EPS-PRIMARY> (0.14)
<EPS-DILUTED> (0.14)
</TABLE>
