<PAGE> 1
================================================================================
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 JUNE 30, 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 June 30, 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
and June 30, 1997 (unaudited) 2
Consolidated Statements of Operations for the three months
and six months ended June 30, 1996 and 1997 (unaudited) 4
Consolidated Statements of Cash Flows for the six months
ended June 30, 1996 and 1997 (unaudited) 5
Notes to Consolidated Financial Statements (unaudited) 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 7
ITEM 5. OTHER INFORMATION 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 11
SIGNATURES 11
</TABLE>
1
<PAGE> 3
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SONOMA INTERNATIONAL AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 1996 and June 30, 1997
ASSETS
<TABLE>
<CAPTION>
December 31, June 30,
1996 1997
----------- -----------
(unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 104,353 $ 37,391
Escrow funds 88,400 153,315
Receivables:
Trade (net of allowance for doubtful accounts
of $3,876 for each year) 54,492 129,993
Other 27,008 20,568
Inventory 85,668 148,748
Prepaid expenses 17,651 197,188
----------- -----------
Total current assets 377,572 687,203
----------- -----------
PROPERTY AND EQUIPMENT
Buildings and improvements 2,599,885 2,620,645
Land 3,150,000 3,150,000
Land improvements 293,831 293,831
Docks and floating buildings 8,220,250 8,225,976
Boats and improvements 2,116,453 2,081,125
Furnishings, fixtures and equipment 1,692,566 1,682,078
Computers under capital lease 193,171 194,295
Fuel tanks and containment buildings 151,132 151,132
Vehicles 22,482 22,482
Construction in progress 140,178 349,866
----------- -----------
18,579,948 18,771,430
Less accumulated depreciation and amortization 4,537,677 4,874,851
----------- -----------
Net property and equipment 14,042,271 13,896,579
----------- -----------
OTHER ASSETS
Deferred loan fees, net of accumulated amortization
of $77,593 and $122,984 322,858 277,467
Goodwill, net of accumulated amortization of
$184,250 and $193,463 1,006,310 997,097
Deferred offering costs 336,632 553,252
----------- -----------
Total other assets 1,665,800 1,827,816
----------- -----------
TOTAL ASSETS $16,085,643 $16,411,598
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE> 4
SONOMA INTERNATIONAL AND SUBSIDIARIES
Consolidated Balance Sheets - Continued
December 31, 1996 and June 30, 1997
LIABILITIES AND STOCKHOLDERS' DEFICIT
<TABLE>
<CAPTION>
December 31, June 30,
1996 1997
------------ ------------
(unaudited)
<S> <C> <C>
CURRENT LIABILITIES
Current portion of long-term debt (including $4,052,778
and $4,168,787 to related parties) $ 4,395,941 $ 4,424,131
Accounts payable 453,522 683,573
Accrued interest (including $57,240 and
$192,063 to related parties) 150,733 280,954
Accrued liabilities 299,802 439,999
Security deposits 49,319 271,038
Deferred revenue 696,622 706,464
Payable to related party 53,200 -
------------ ------------
Total current liabilities 6,099,139 6,806,159
------------ ------------
LONG-TERM LIABILITIES
Long-term debt, less current maturities (including $114,830
in 1996 due to related parties and $0 in 1997) 10,263,786 10,310,903
------------ ------------
Total long-term liabilities 10,263,786 10,310,903
------------ ------------
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) (2,100,110)
------------ ------------
Total stockholders' deficit (277,282) (705,464)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 16,085,643 $ 16,411,598
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE> 5
SONOMA INTERNATIONAL AND SUBSIDIARIES
Consolidated Statements of Operations
Three months and six months ended June 30, 1996 and 1997
<TABLE>
<CAPTION>
Three months Six months
ended ended
1996 1997 1996 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES
Slip fees $ 305,380 $ 214,495 $ 594,047 $ 647,310
Boat rental 147,429 120,877 147,429 120,923
Lodge 216,263 417,513 245,907 448,482
Fuel 149,384 587,926 150,296 982,232
Convenience store and merchandise 109,557 105,567 109,618 112,189
Restaurant 121,165 113,726 123,757 117,827
Other 36,507 68,279 36,673 93,537
----------- ----------- ----------- -----------
Total revenues 1,085,685 1,628,383 1,407,727 2,522,500
COST OF REVENUES
Slip 35,437 45,035 56,538 72,653
Boat rental 113,170 59,890 144,185 79,020
Lodge 62,005 65,036 103,382 95,954
Fuel 99,469 416,885 100,586 690,063
Convenience store and merchandise 95,428 83,850 96,686 86,966
Restaurant 106,429 92,916 110,879 98,892
Other 6,717 34,550 39,768 84,453
----------- ----------- ----------- -----------
Total cost of revenues 518,655 798,162 652,024 1,208,001
GROSS PROFIT 567,030 830,221 755,703 1,314,499
SELLING, GENERAL AND ADMINISTRATIVE (including
related party amounts for management and guarantee
fees of $64,284 and $80,386 for the three and six
months ended June 30, 1996 and -0- for the three and
six months ended June 30, 1997) 315,604 420,211 566,880 727,411
AMORTIZATION OF GOODWILL 12,179 8,151 38,582 33,495
DEPRECIATION AND AMORTIZATION 154,379 174,030 202,886 330,868
----------- ----------- ----------- -----------
INCOME (LOSS) FROM OPERATIONS 84,868 227,828 (52,645) 222,725
INTEREST EXPENSE (including interest to related
parties of $74,017, 74,535, 148,034 and $149,070) 252,147 323,758 468,313 651,156
----------- ----------- ----------- -----------
NET LOSS BEFORE EXTRAORDINARY ITEMS (167,279) (95,930) (520,958) (428,431)
EXTRAORDINARY ITEMS
Gain on extinguishment of debt,
net of income tax of $0 - - 2,518,487 -
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ (167,279) $ (95,930) $ 1,997,529 $ (428,431)
=========== =========== =========== ===========
Net income (loss) per common share before
extraordinary items $ (0.12) $ (0.04) $ (0.38) $ (0.19)
----------- ----------- ----------- -----------
Net income (loss) per common share $ (0.12) $ (0.04) $ 1.46 $ (0.19)
----------- ----------- ----------- -----------
Weighted average shares outstanding 1,369,025 2,300,000 1,369,025 2,300,000
----------- ----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE> 6
SONOMA INTERNATIONAL AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Six months ended June 30, 1996 and 1997
<TABLE>
<CAPTION>
1996 1997
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 1,997,529 $ (428,431)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization of fixed assets 278,686 330,868
Amortization of goodwill 38,582 33,495
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 26,673 (64,915)
Decrease (increase) in trade receivables (83,666) (75,501)
Decrease (increase) in other receivables 136 6,440
Decrease (increase) in inventory (79,604) (63,080)
Decrease (increase) in prepaid expenses 5,555 (179,537)
Increase (decrease) in accounts payable 206,214 230,051
Increase (decrease) in accrued interest (72,266) 130,221
Increase (decrease) in accrued liabilities 62,867 140,197
Increase (decrease) in security deposits 222,260 221,719
Increase (decrease) in related party loan - (53,200)
Increase (decrease) in deferred revenue (33,311) 9,842
Increase (decrease) in accrued guarantee fees 10,000 -
Increase (decrease) in accrued management fees 46,386 -
----------- -----------
Net cash provided by operating activities 31,755 238,169
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (154,696) (191,482)
----------- -----------
Net cash used by investing activities (154,696) (191,482)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bank and related party loans 7,183,976 192,373
Repayments of borrowings (6,157,729) (110,511)
Repayments of obligation under capital lease (616,029) -
Debt financing costs and other deferred costs (280,738) (195,511)
----------- -----------
Net cash provided by financing activities 129,480 (113,649)
----------- -----------
NET INCREASE (DECREASE) IN CASH 6,539 (66,962)
Cash at beginning of the year 9,628 104,353
----------- -----------
Cash at end of the year $ 16,167 $ 37,391
=========== ===========
SUPPLEMENTAL DISCLOSURES
Cash paid during the period for interest $ 354,060 $ 256,035
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE> 7
SONOMA INTERNATIONAL AND SUBSIDIARIES
(A Nevada Corporation)
Notes to the Consolidated Financial Statements
Three months and six months ended June 30, 1996 and 1997
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.
6
<PAGE> 8
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 and six months
ended June 30, 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. 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 JUNE 30, 1996 COMPARED WITH THE THREE MONTHS ENDED
JUNE 30, 1997
Revenues
Revenues for the three months ended June 30, 1997 increased $542,698
or 50% from the same period in 1996. On December 9, 1996, Sonoma acquired Key
West and accordingly revenues for the three months ended June 30, 1996 do not
include Key West operations which total $577,081 in 1997. If Key West revenue
is excluded, Jamestown revenues decreased for the three months ended June 30,
1997 over 1996 by $34,383 or 3%. Boat rentals decreased by $26,552 over the
three months ended June 30, 1996 as a result of poor weather.
Cost of Revenues
During the three months ended June 30, 1997, cost of revenues
decreased $299,117 (excluding the Key West costs of revenues of $311,886).
Excluding the effect of Key West, the decrease in cost of revenues was 62%. The
primary reason for the decline in 1997 cost of revenues was a decrease of
$53,280 as the result of major repairs and maintenance in the rental boat
department incurred in 1996. Cost of revenues as a percentage of revenues
decreased from 72% for the three months ended June 30, 1996 to 49% compared to
the same period in 1997. The decrease is the result of higher fuel costs of
revenues at the Key West facility.
Selling, General and Administrative
Selling, general and administrative expenses increased $104,607 or 33%
over 1996 to $420,211. Included in this increase is $125,133 attributed to Key
West operations for three months ended June 30, 1997. Administrative staff
added at the Sonoma level amount to $44,640 of the increase. The offset was
mainly due to decreases in other administrative costs at Jamestown.
7
<PAGE> 9
Interest Expense
Interest expense increased from $252,147 for the three months ended
June 30, 1996 to $323,758 for the three months ended June 30, 1997. The
increase of $71,611 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.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization expense increased $15,623 or 9% to
$182,181 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.
SIX MONTHS ENDED JUNE 30, 1996 COMPARED WITH THE SIX MONTHS ENDED JUNE
30, 1997
Revenues
Revenues for the six months ended June 30, 1997 increased $1,114,773
or 79% 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 $1,115,454 in 1997. If Key West revenue
is excluded, Jamestown revenues remained consistent for the six months ended
June 30, 1997 compared to the same period in 1996.
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 six months ended June 30, 1997, cost of revenues decreased
$49,133 (excluding the Key West costs of revenues of $605,110). Excluding the
effect of Key West, the decrease in cost of revenues was 8%. The primary reason
for the decline in costs of revenues was due to reductions in staffing of
various departments at Jamestown. Cost of revenues as a percentage of revenues
increased from 46% for the six months ended June 30, 1996 to 48% compared to
the same period in 1997.
Selling, General and Administrative
Selling, general and administrative expenses increased $160,530 or 28%
over 1996 to $727,410. Included in this increase are $176,493 attributed to Key
West operations for six months ended June 30, 1997.
Interest Expense
Interest expense increased from $468,313 for the six months ended June
30, 1996 to $651,156 for the six months ended June 30, 1997. The increase of
$182,843 was due to an increase of $163,262 related to debt assumed as a result
of the Key West acquisition. 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.
8
<PAGE> 10
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 $122,895 or 50% to
$364,363 for the comparable six 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 June 30, 1997 of $6,118,956. The
Company believes that the net proceeds from a public offering will provide
$14,700,000 in funds. Of these proceeds, approximately $4,002,000 and $786,000
will reduce the secondary debt of Jamestown and Key West, respectively. 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 a public
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 $6,161,128 at June 30,
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.
Cash flows provided by operating activities were $31,755 in 1996,
compared to cash flow provided by operations of $238,169 in 1997. This increase
was due to a number of factors, which was offset by a combination of a number of
other items. Cash used in investing activities of $154,696 in 1996 and $191,482
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 $129,480 in 1996 and
$113,649 in 1997. During the six month ended June 30, 1996, the Company borrowed
$7,183,976 from and repaid $6,157,729 to various entities. Repayments to
affiliates during the six month period ended June 30, 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
$280,738 in refinancing costs. During 1997, the Company borrowed $192,373 from
and repaid $110,511 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.
9
<PAGE> 11
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.
10
<PAGE> 12
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 filed Amendment No. 2 to its Form SB-2 on April 17, 1997. The
Company recently filed Amendment No. 3 to its Form SB-2 on May 16, 1997. Sonoma
International's Amendment No. 3 to Form SB-2 as filed on May 16, 1997 is
incorporated by reference herein.
In late July 1997 Sonoma's Chief Executive Officer and President, James L.
Frye resigned to take a new position with an unrelated third party business
entity. R. Dudley Webb, Chairman of the Board, will assume the duties of Chief
Executive Officer until such time as a successor to Mr. Frye is elected by
Sonoma's Board of Directors.
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: August 14, 1997 By /s/ R. DUDLEY WEBB
-----------------------------------
R. Dudley Webb,
Chief Executive Officer
Dated: August 14, 1997 By /s/ PETER SACKMANN
-----------------------------------
Peter Sackmann,
Chief Financial Officer
<PAGE> 13
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 SB2 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS IN SONOMA INTERNATIONAL'S FORM SB2 AS FILED WITH
THE COMMISSION ON MAY 16, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-1-1997
<PERIOD-END> JUN-30-1997
<CASH> 37,391
<SECURITIES> 0
<RECEIVABLES> 129,993
<ALLOWANCES> (3,876)
<INVENTORY> 148,748
<CURRENT-ASSETS> 687,203
<PP&E> 18,771,430
<DEPRECIATION> (4,874,851)
<TOTAL-ASSETS> 16,411,598
<CURRENT-LIABILITIES> 6,806,158
<BONDS> 0
0
0
<COMMON> 2,300
<OTHER-SE> (707,764)
<TOTAL-LIABILITY-AND-EQUITY> 16,411,598
<SALES> 2,522,500
<TOTAL-REVENUES> 2,522,500
<CGS> 1,208,001
<TOTAL-COSTS> 1,208,001
<OTHER-EXPENSES> 1,091,773
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 651,156
<INCOME-PRETAX> (428,431)
<INCOME-TAX> 0
<INCOME-CONTINUING> (428,431)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (428,431)
<EPS-PRIMARY> (0.19)
<EPS-DILUTED> (0.19)
</TABLE>
