<PAGE>
U.S. 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, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER
NEW WORLD COFFEE, INC.
----------------------
(NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
DELAWARE 13-3690261
- --------------------------------- -------------------
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
379 WEST BROADWAY 4TH FLOOR
NEW YORK, NY 10012
--------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(212) 343-0552
--------------
(ISSUER'S TELEPHONE NUMBER)
SECURITIES REGISTERED PURSUANT TO SECTION 12 (g) OF THE EXCHANGE ACT: NONE
CHECK WHETHER THE ISSUER (1) FILED ALL REPORTS REQUIRED TO BE FILED BY
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 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 AUGUST 5, 1996, 4,760,961 SHARES OF COMMON STOCK OF THE ISSUER WERE
OUTSTANDING.
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE);
YES NO X
----- ---
<PAGE>
NEW WORLD COFFEE, INC.
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL SCHEDULES
JUNE 30, 1996
INDEX
PAGE
----
1. FINANCIAL STATEMENTS
Condensed Balance Sheet as of June 30, 1996 3
Condensed Statements of Operations for the three months
and year to date ended June 30, 1996 and July 2, 1995 4
Condensed Statements of Cash Flows for the year to date ended
June 30, 1996 and July 2, 1995 5
Notes to Financial Statements 6
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 7
RESULTS OF OPERATIONS FOR THE SECOND QUARTER AND YEAR TO DATE
ENDED JUNE 30, 1996
Other Information 10
Signatures 10
2
<PAGE>
NEW WORLD COFFEE, INC.
----------------------
BALANCE SHEET
-------------
<TABLE>
<CAPTION>
June 30 Dec 31
ASSETS 1996 1995
------------ ----------- -----------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 6,055,421 $ 951,355
Receivables 122,909 66,570
Inventories 324,268 217,439
Prepaid expenses 278,927 70,000
----------- -----------
Total current assets 6,781,525 1,305,364
PROPERTY AND EQUIPMENT, net 6,708,874 7,076,083
DEBT ISSUANCE COSTS - 753,627
GOODWILL 496,000 -
DEFERRED OFFERING COSTS - 608,000
DEPOSITS AND OTHER ASSETS, net 793,334 523,802
----------- -----------
Total assets $14,779,733 $10,266,876
=========== ===========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
------------------------------------------------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 533,959 $ 1,158,835
Accrued expenses 630,499 612,348
Accrued compensation 59,627 299,287
Current portion of obligations
under capital leases 224,567 57,924
Current portion of Notes Payable 192,500 -
----------- -----------
Total current liabilities 1,641,152 2,128,394
DEFERRED RENT 629,836 507,432
NOTES PAYABLE 577,500 3,500,000
OBLIGATIONS UNDER CAPITAL LEASES 537,502 111,939
BRIDGE FINANCING - 755,000
CONVERTIBLE REDEEMABLE PREFERRED STOCK - 6,230,051
STOCKHOLDERS' EQUITY (DEFICIT):
Convertible Preferred Stock,
Series A , $.001 par value,
5,000,000 shares authorized, 375
issued and outstanding - -
Common Stock, $.001 par value;
10,000,000 shares authorized;
4,722,848 and 1,213,725 shares
issued and outstanding at June
30, 1996 and December 31, 1995,
respectively 4,723 1,214
Additional paid-in capital 20,587,321 1,889,744
Accumulated deficit (9,198,301) (4,856,898)
----------- -----------
Total stockholders' equity (deficit) 11,393,743 (2,965,940)
----------- -----------
Total liabilities and stockholders' $14,779,733 $10,266,876
equity =========== ===========
</TABLE>
3
<PAGE>
NEW WORLD COFFEE, INC.
----------------------
STATEMENTS OF OPERATIONS
------------------------
FOR THE THREE MONTHS AND YEAR TO DATE ENDED JUNE 30, 1996 AND JULY 2, 1995
--------------------------------------------------------------------------
(UNAUDITED)
-----------
<TABLE>
<CAPTION>
Three Months Ended Year to Date Ended
June 30, July 2, June 30, July 2,
1996 1995 1996 1995
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues $ 2,628,577 $2,417,382 $ 4,907,158 $ 4,469,031
Cost of sales and related occupancy costs 1,560,216 1,530,995 3,009,429 2,842,946
Store operating expenses 855,739 745,042 1,582,072 1,729,483
----------- ---------- ----------- -----------
STORE OPERATING INCOME 212,622 141,345 315,657 (103,398)
Depreciation and amortization 282,636 244,825 547,310 441,327
General and administrative expenses 758,298 297,869 1,279,267 879,854
Provision for store closings and
reorganization costs 1,800,000 - 1,800,000 -
----------- ---------- ----------- -----------
OPERATING LOSS (2,628,312) (401,349) (3,310,920) (1,424,579)
Interest income (expense), net 31,028 (56,989) 19,517 (92,277)
Write-off of debt issuance cost - - (1,050,000) -
----------- ---------- ----------- -----------
NET LOSS $(2,597,284) $ (458,338) $(4,341,403) $(1,516,856)
=========== ========== =========== ===========
NET LOSS PER COMMON SHARE $(.57) $(.32) $(1.06) $(1.04)
=========== ========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 4,522,716 1,460,642 4,086,523 1,460,642
=========== ========== =========== ===========
</TABLE>
4
<PAGE>
NEW WORLD COFFEE, INC.
----------------------
STATEMENTS OF CASH FLOWS
------------------------
FOR THE YEAR TO DATE ENDED JUNE 30, 1996 AND JULY 2, 1995
---------------------------------------------------------
(UNAUDITED)
-----------
<TABLE>
<CAPTION>
For The Year To Date Ended
June 30 July 2
----------------------------
1996 1995
------------ -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(4,341,403) $(1,516,856)
Adjustments to reconcile net loss to
net cash used in operating activities-
Depreciation and amortization 547,310 441,327
Write-off of debt issuance costs 1,000,000 -
Provision for store closings and
reorganization costs 1,800,000
Increase (decrease) in cash resulting
from changes in operating assets and
liabilities-
Receivables (56,339) 14,427
Inventories (107,189) (90,593)
Prepaid expenses (208,926) (122,229)
Deposits and other assets (194,021) (54,826)
Accounts payable (624,827) 215,675
Accrued expenses (282,100) (46,706)
Accrued compensation (239,661) 3,671
Deferred rent 122,403 362,232
----------- -----------
Net cash used in operating activities (2,584,753) (793,878)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (432,123) (2,953,579)
Cash paid in connection with the
Coopers acquisition, including
acquisition costs (442,500) -
----------- -----------
Net cash used in investing
activities (874,623) (2,953,579)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of Common Stock, net of
issuance costs of approximately
$2,200,000 11,552,782 -
Issuance of Series A Convertible
Preferred Stock 3,325,000 -
Issuance of Series C Convertible
Preferred Stock - 2,744,529
Payments of Series C Redeemable
Preferred Stock (1,999,997) -
Repayment of bridge financing loan (755,000) -
Payments on capital leases (59,343) -
Repayment of notes payable (3,500,000) -
Issuance of notes payable - 1,500,000
----------- -----------
Net cash provided by financing
activities 8,563,442 4,244,529
----------- -----------
Net increase in cash 5,104,066 497,072
CASH, beginning of period 951,355 200,801
----------- -----------
CASH, end of period $ 6,055,421 $ 697,873
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for: Interest $ 45,452 $ 35,288
----------- -----------
Non-cash investing and financing
activities:
Equipment purchased under capital leases $ 475,061 $ -
----------- -------------
Notes issued in connection with the
Coopers acquisition $ 770,000 $ -
----------- -------------
Debt issuance costs incurred in
connection with bridge financing $ 236,884 $ -
=========== =============
</TABLE>
5
<PAGE>
NEW WORLD COFFEE, INC.
NOTED TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. The June 30, 1996 balance sheet presented herein was derived from the audited
December 31, 1995 financial statements of the Company.
2. These financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-QSB. The financial statements should be read in
conjunction with the audited financial statements of the Company for the year
ended December 31, 1995 for a description of the significant accounting
policies, which have continued without change, and other footnote
information.
3. All adjustments (recurring in nature) which are, in the opinion of
management, necessary for a fair presentation of the results of the interim
periods have been included. The results of the interim periods are not
necessarily indicative of the results for the full year.
4. The Company completed its initial public offering on February 1, 1996 of
2,500,000 shares realizing approximately $11,500,000 in net proceeds.
5. The Company completed the sale of 375 shares of Series A Convertible
Preferred Stock on June 28, 1996 realizing approximately $3,325,000 in net
proceeds after commissions and costs of $425,000. These shares will convert
to common stock within three years at not more than $3.975 per share and have
an 8% coupon.
6. The Company took a charge in the second quarter of $1,500,000 to provide for
the closing of five unprofitable stores. This represents a provision for
writedowns of property and equipment of $1,350,000 and provides for an
additional accrual of $150,000 for other closure costs. In addition, the
Company provided for a reorganization charge of $300,000 which primarily
consisted of severance and related benefits.
7. The Company purchased three Coopers Coffee Stores ("Coopers") for $242,500
cash and a $770,000 note payable over 4 years which bears interest at 6%. The
purchase price has been allocated to the assets acquired based on their fair
value at the date of acquisition and the difference between the cost of
acquiring the locations and the current estimated fair value of the net
assets acquired will be treated as goodwill for accounting purposes, which is
being amortized over 10 years. The Company is currently in the process of
completing a final purchase price allocation for this acquisition and such
allocation will be completed by year end. The consolidated statements of
operations of the Company include the results of Coopers since the date of
acquisition.
Following is the pro-forma presentation as if the three Coopers locations and
the closing of 5 unprofitable stores had occurred on January 1, 1995 (amounts
in 000's):
Year to date ended
--------------------------
June 30, July 2,
1996 1995
---------- ----------
Revenue $ 5,113.3 $ 5,428.9
Store operating income 584.8 (12.0)
Operating loss (1,545.8) (1,390.9)
Net loss (2,587.6) (1,495.5)
Net loss per share $ (.63) $ (1.02)
The pro forma information presented above does not purport to be indicative
of the results that actually would have been obtained if the combined
operations had been conducted during the periods presented or of future
operations of the combined operations.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company opened its first espresso bar in February 1993 in New York and
has grown to 30 espresso bars in New York, New Jersey and Pennsylvania since
that date.
The Company's experience has been that espresso bars in residential and
shopping areas generally offer more attractive economics than central business
district sites as they typically are open up to 14 hours a day, seven days a
week and attract customers throughout the day, resulting in more cost-effective
staffing and operations. Based on this experience, the Company's site selection
strategy has shifted to opening more espresso bars in residential and shopping
areas.
The Company has incurred losses in each fiscal year from inception
primarily due to the cost of retail store expansion and developing an
infrastructure to support future growth. The Company's fiscal year ends on the
Sunday closest to December 31. Prior to fiscal 1995 the Company was on a
calendar year basis.
Fiscal Quarter Ended June 30, 1996 Compared to Fiscal Quarter Ended July 2, 1995
Revenues. Revenues increased 8.7% to $2,628,577 for the fiscal quarter
ended June 30, 1996 from $2,417,382 for the comparable 1995 period. Comparable
store sales for the 22 stores opened for both periods decreased 2.8%. Management
attributes this decrease to its cannibalization of certain existing stores to
solidify the Company's presence in certain trade areas although this is
significantly less than the previous quarter's decrease of 12.8%. Sales for the
27 stores which were open during the second quarter of 1995 and 1996 contributed
to a 5.5% increase in revenues. Sales for the 4 stores opened since July 2, 1995
contributed 3.2% of the percentage increase in revenues.
Costs and Expenses. Cost of sales and related occupancy costs as a
percentage of revenues for the fiscal quarter ended June 30, 1996 decreased to
59.4% from 63.3% for the comparable 1995 period. The primary components were a
decrease of 3.4% in cost of goods due to the Company's implementation of its new
personal computer based point of sale system as well as improved vendor pricing.
Occupancy expense as a percentage of revenues decreased 0.5% .
Store operating expenses as a percentage of revenues for the fiscal quarter
ended June 30, 1996 increased to 32.5% from 30.8% for the comparable 1995
period. The primary component was a 1.4% increases in personnel costs primarily
due to the enhancement of the Company's training program in anticipation of its
planned expansion. Miscellaneous store expenses increased 0.3% primarily due to
increases in insurance and utility costs.
Depreciation and amortization expenses as a percentage of revenues for the
fiscal quarter ended June 30, 1996 increased to 10.8% from 10.1% for the
comparable 1995 period primarily due to lower than anticipated revenues from
certain commercial locations.
General and administrative expenses increased to $758,298 or 28.8% of
revenues, for the fiscal quarter ended June 30, 1996 compared to $297,869 or
12.3% of revenues, for the comparable 1995 period. General and administrative
expenses included $107,652 or 4.1% of revenues relating to a corporate marketing
program begun in the second quarter as well as $32,475 or 1.2% for recruiting
fees relating to the hiring of the Company's Vice President of Real Estate and
Development and Director of Construction. Payroll expense increased by $181,596
to $305,171 or 11.6% of revenues due to the above management additions, along
with the addition of a Chief Operating Officer and Directors of Human Resources
and Training as the Company continues to add to its infrastructure to support
its planned expansion.
The Company recorded a provision for store closings and reorganization
costs in the fiscal quarter ended June 30, 1996 of $1,800,000. This charge was
taken to provide for the closing of five unprofitable stores, four of which are
not in residential areas, in accordance with the Company's strategy of
concentrating its business in primarily residential areas, and the
reorganization of senior management.
7
<PAGE>
Interest income, net for the fiscal quarter ended June 30, 1996 increased
to $31,028 or 1.2% of revenues, from an expense of $56,989 or 2.4% of revenues
for the comparable 1995 period. This increase resulted from interest earned on
cash and cash equivalents resulting from the Company's initial public offering.
Net Loss. Net loss for the fiscal quarter ended June 30, 1996 increased to
$2,597,284 from $458,338 for the comparable 1995 period. Operating margins
decreased to a loss of 100.0% of revenues from a loss of 16.6% of revenues in
the comparable 1995 period. Store operating income increased by 2.2% as a
percentage of revenues but this was offset by an increase in general and
administrative expenses of 16.5% as a percentage of revenues and the provision
for store closings and reorganization costs of 68.5% as a percentage of
revenues.
Year to Date Ended June 30, 1996 Compared to the Year to Date Ended July 2, 1995
Revenues. Revenues increased 9.8% to $4,907,158 for the year to date ended
June 30, 1996 from $4,469,031 for the comparable 1995 period. Comparable store
sales for the nineteen stores opened for both periods decreased 8.8%. Management
attributes this decrease to its cannibalization of certain existing stores to
solidify the Company's presence in certain trade areas as well as record
snowfalls in the Northeast in the first quarter. Sales for the 27 stores which
were open during the first two quarters of 1995 contributed to a 8.1% increase
in revenues. Sales for the 4 stores opened since July 2, 1995 contributed 1.7%
of the percentage increase in revenues.
Costs and Expenses. Cost of sales and related occupancy costs as a
percentage of revenues for the year to date ended June 30, 1996 decreased to
61.3% from 63.6% for the comparable 1995 period. The primary components were a
decrease of 3.7% in cost of goods due to the Company's ability to negotiate
improved vendor pricing as a result of increased purchasing power and reduced
shrinkage due to the implementation of the Company's initial point of sale
system. This was partially offset by an increase in occupancy costs of 1.4%
primarily due to higher occupancy expense as a percentage of revenues on certain
commercial store locations.
Store operating expenses as a percentage of revenues for the year to date
ended June 30, 1996 decreased to 32.3% from 38.7% for the comparable 1995
period. The primary components were 6.0% decreases in personnel costs primarily
due to more efficient staffing currently and an overstaffing of store level
personnel that occurred during the first quarter of 1995 period due to a delay
in the closing of the Company's Series C Preferred Stock offering. Miscellaneous
store expenses decreased .4% due to improved cost controls.
Depreciation and amortization expenses as a percentage of revenues for the
year to date ended June 30, 1996 increased to 11.1% from 9.9% for the comparable
1995 period primarily due to lower than anticipated revenues on certain
commercial locations.
General and administrative expenses increased to $1,279,267 or 26.1% of
revenues, for the year to date ended June 30, 1996 compared to $879,854 or 19.7%
of revenues, for the comparable 1995 period. Corporate payroll expense increased
by $243,963 to $519,716 or 10.6% as a percentage of revenues due to the
additions of the Company's Chief Operating Officer, Vice President of Real
Estate and Development, Directors of Construction, Human Resources and Training
as the Company continues to add to its infrastructure to support its planned
expansion.
The Company recorded a provision for store closings and reorganization
costs in the fiscal quarter ended June 30, 1996 of $1,800,000. This charge was
taken to provide for the closing of five unprofitable stores, four of which are
not in residential areas, in accordance with the Company's strategy of
concentrating its business in primarily residential areas, and the
reorganization of senior management.
Interest expense, net for the year to date ended June 30, 1996 increased to
$1,030,483 or 21.0% as a percentage of revenues, from $92,277 or 2.1% for the
comparable 1995 period. This increase resulted from a charge taken in the first
fiscal quarter of $1,050,000 for issuance costs relating to the Company's bridge
financing prior to its initial public offering.
Net Loss. Net loss for the year to date ended June 30, 1996 increased to
$4,341,403 from $1,516,856 for the comparable 1995 period. Operating margins
decreased to a loss of 67.5% from a loss of 31.9% in the comparable 1995 period,
primarily due to increased store operating income of 8.7% as a percentage of
revenues, and an increase in general and administrative expenses of 6.4% as a
percentage of revenues and the provision for store closings and reorganization
costs of 36.7% as a percentage of revenues.
8
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company successfully completed its initial public offering on February
1, 1996. The Company realized approximately $11,500,000 in net proceeds. The
Company repaid its bank line of $3,500,000 and repurchased from an existing
shareholder approximately $2,000,000 of the Company's Series C Convertible
Preferred Stock. On June 28th, 1996 the Company completed the sale of Series A
Convertible Preferred Stock realizing approximately $3,325,000 in net proceeds.
The Company's capital requirement is primarily for expansion of its retail
operations. Currently, all of the Company's stores are in leased facilities. The
Company currently estimates that capital expenditures and acquisitions through
fiscal 1996 will be approximately $9,000,000.
At June 30, 1996 the Company had working capital of $5,140,373 compared to
a working capital deficit of $823,030 at December 31, 1995. This change in
working capital is primarily due to the Company's completion of its initial
public offering on February 1, 1996 and the sale of Series A Convertible
Preferred Stock on June 28, 1996.
The Company had net cash used in operating activities of $793,878 for the
first two fiscal quarters of 1995 and net cash used in operating activities of
$2,584,753 for the first two fiscal quarters of 1996.
The Company had net cash used for investing activities of $2,953,579 for
the first two fiscal quarters of 1995, and $874,623 for the first two fiscal
quarters of 1996. The primary use of cash for investing activities was for
capital expenditures related to the Company's retail store expansion.
The Company had net cash provided by financing activities of $4,244,529 for
the first two fiscal quarters of 1995, and $8,563,442 for the first quarter two
fiscal quarters of 1996. The Company funded its growth through it's initial
public offering and the sale Series A Convertible Preferred Stock raising
approximately $11.5 million and $3.325 million in net proceeds respectively.
In December 1995 and January 1996, the Company obtained a bridge loan
totaling $1,000,000 from certain individuals and financial institutions. The
loan carried an interest rate of 10% and was repaid within ten days after the
closing of the public offering. In connection with the loan, the Company issued
to the lenders warrants to purchase 181,818 shares of its Common Stock at a
price of $0.01 per share. The warrants are exercisable immediately, but the
shares issued pursuant to the warrants are subject to a six month lock-up
agreement.
The Company is negotiating a commitment letter from its lender for a line
of credit of $2,500,000.
SEASONALITY AND GENERAL ECONOMIC TRENDS
The Company anticipates that its business will be affected by general
economic trends that affect retailers in general. While the Company has not
operated during a period of high inflation, it believes based on industry
experience that it would generally be able to pass on increased costs resulting
from inflation to its customers. The Company's business may be affected by other
factors, including increases in the commodity prices of green coffee,
acquisitions by the Company of existing espresso bars, existing and additional
competition, marketing programs, weather, special or unusual events, and
variations in the number of store openings. The Company has few, if any,
employees at the minimum wage level and therefore believes that an increase in
the minimum wage would have minimal impact on its operations and financial
condition.
9
<PAGE>
PART II - OTHER INFORMATION
NEW WORLD COFFEE, INC.
JUNE 30, 1996
Item 1. Legal Proceedings
Not applicable
Item 2. Changes in Securities
On February 1, 1996 the Company completed its' initial public
offering selling 2,500,000 shares of Common Stock at $5.50 per share.
On June 28th, 1996 the Company completed the sale of Series A
Convertible Preferred Stock selling 375 shares at $10,000 per share.
These shares are convertible at not more than $3.975 per share.
Item 3. Defaults upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
Item 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. None
--------
(b) Reports on Form 8-k
Current Reports on Form 8-K (Date of Event June 28, 1996) was
filed with the SEC on July 12, 1996. Report was filed for item 2
relating to the sale of convertible preferred securities.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NEW WORLD COFFEE, INC.
Date: By: /s/ R. Ramin Kamfar
---------------------------------------
R. Ramin Kamfar -President & CEO
Date: By: /s/ Jerold E. Novack
---------------------------------------
Jerold E. Novack - Vice President-Finance
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-29-1996
<PERIOD-END> JUN-30-1996
<CASH> 6,055
<SECURITIES> 0
<RECEIVABLES> 122
<ALLOWANCES> 0
<INVENTORY> 324
<CURRENT-ASSETS> 6,781
<PP&E> 8,274
<DEPRECIATION> 1,565
<TOTAL-ASSETS> 14,780
<CURRENT-LIABILITIES> 1,641
<BONDS> 1,115
3,325
0
<COMMON> 4
<OTHER-SE> 8,067
<TOTAL-LIABILITY-AND-EQUITY> 14,780
<SALES> 4,907
<TOTAL-REVENUES> 4,907
<CGS> 3,009
<TOTAL-COSTS> 4,591
<OTHER-EXPENSES> 3,627
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,030
<INCOME-PRETAX> (4,341)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,341)
<EPS-PRIMARY> (1.06)
<EPS-DILUTED> 0
</TABLE>
