U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-QSB/A 1
Quarterly Report Under
The Securities Exchange Act of 1934
For Quarter Ended: July 31, 1999
Commission File Number: 0-29356
SOUTHERN STATES POWER COMPANY, INC.
(Exact name of small business issuer as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
33-0312389
(IRS Employer Identification No.)
830 Havens Road
Shreveport, LA
(Address of principal executive offices)
71107
(Zip Code)
(318) 221-5703
(Issuer's Telephone Number)
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 ___
The number of shares of the registrant's only class of common stock issued and
outstanding as of July 31, 1999 was 10,947,947 shares.
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PART I
ITEM 1. FINANCIAL STATEMENTS.
The unaudited financial statements for the three month period ended July
31, 1999, are attached hereto.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Company's
unaudited financial statements and notes thereto included herein. In connection
with, and because it desires to take advantage of, the "safe harbor" provisions
of the Private Securities Litigation Reform Act of 1995, the Company cautions
readers regarding certain forward looking statements in the following discussion
and elsewhere in this report and in any other statement made by, or on the
behalf of the Company, whether or not in future filings with the Securities and
Exchange Commission. Forward looking statements are statements not based on
historical information and which relate to future operations, strategies,
financial results or other developments. Forward looking statements are
necessarily based upon estimates and assumptions that are inherently subject to
significant business, economic and competitive uncertainties and contingencies,
many of which are beyond the Company's control and many of which, with respect
to future business decisions, are subject to change. These uncertainties and
contingencies can affect actual results and could cause actual results to differ
materially from those expressed in any forward looking statements made by, or on
behalf of, the Company. The Company disclaims any obligation to update forward
looking statements.
Overview
- --------
The Company was originally organized as Pascal Ventures, Inc. ("Pascal") in
the State of Delaware on August 31, 1988. In January 1998, Pascal's Form 10-SB
became effective and the Company become a reporting company under the Securities
Exchange Act of 1934, as amended. On July 13, 1998, the shareholders of Pascal
and Southern States Power Company, Inc., a Louisiana corporation ("Southern
States") approved the terms of a Share Exchange Agreement and Plan of
Reorganization between the two entities. As a result of the merger, the total
number of common shares outstanding as of July 13, 1998 (as of the merger date)
was 10,205,000. As a result of the Share Exchange agreement and Plan of
Reorganization between Pascal and Southern States, the shareholders of Pascal
authorized a 4 for 1 forward split of all pre-merger shares (from 500,000 to
2,000,000) and issued 8,205,000 shares of its restricted common stock to the
shareholders of Southern States. Accordingly, the Company had a
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total of 10,205,000 common shares of its stock outstanding after concluding the
merger. The Company changed its name from Pascal Ventures, Inc. to Southern
States Power Company, Inc.
On February 2, 1999 the Company was approved for trading on the OTC:BB
exchange. The symbol ASSPC was assigned to the Company. The Company's securities
are currently not liquid. There are no market makers in the Company's securities
and it is not anticipated that any market will develop in the company's
securities until such time as the company successfully implements its business
plans.
Revenues
- --------
The Company generated no revenues from operations during the three month
period ended July 31, 1999. All revenues have been derived from dividend income
from cash reserves. The Company is still in the development stage and management
has concluded that the most prudent use of the Company's cash reserves at this
time is in low risk investments. As the business plan of the Company develops
and funds are allocated toward revenue-generating activities, cash can be moved
from the investment account to an operating account on an "as-needed" basis.
This will allow the Company to maximize its interest revenue with a low risk
factor.
Plan of Operation
- -----------------
The Company is a development stage company concerned with power generation
for various applications. In the time period between November 1, 1998 and July
31, 1999, the Company focused on the development of its joint venture automobile
manufacturing operation with Environmental Process Advanced, S.A. de C.V. in
Otay Mesa, Mexico. Resources from Company reserves were allocated to the plant
for expenses such as labor, insurance, parts, equipment and the like. Most of
the plant activities in this fiscal quarter were centered on tooling the plant
facility, training the staff and building up an inventory of vehicles with
varying power systems (electric, gas, propane, diesel). The Company also
purchased the twenty-percent interest in the joint venture that was owned by
Global Green Cars, Inc. This acquisition brings the Company's total interest in
the venture to eighty percent. Capital expenditures have been made to support
the automobile manufacturing facility during its development phase. The Company
will continue to support the manufacturing facility from its cash reserves until
such time as it begins to generate revenue, at which time the joint venture
should have sufficient income to support its operations.
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The Company also has formed a joint venture with Anuvu, Incorporated to
complete development and demonstration of an advanced proton exchange membrane
(PEM) fuel cell that will be demonstrated in a series of fuel cell powered
electric vehicle runs in California and other locations. The Company and Anuvu
formed the joint venture company to combine fuel cell technology of Anuvu and
electric vehicle production capabilities of the Company. The joint venture
company, Global Fuel Cell Corporation, is owned 50% by Anuvu and 50% by the
Company. SSPC has provided funding, engineering and marketing support. The
Company has also completed an electric mini-van with a state of the art AC drive
system that has a fully computerized monitoring system. A series of vehicle runs
are planned over the next few months with the fuel cell using a variety of fuels
including hydrogen, natural gas, propane, methanol & gasoline.
In November 1998, the Company entered into an agreement with Thunder Ranch,
Inc. whereby the Company was irrevocably assigned the rights to manufacture and
distribute the AIsland Car (sometimes referred to as the AWorld Car or the
AWorldStar vehicle). The developer of this proprietary vehicle technology was
hired by the Company as a consultant in the areas of vehicle fabrication at the
Otay Mesa manufacturing facility.
In December 1998, the Company placed itself into the burgeoning biodiesel
fuel market with two actions. In the first, the Company purchased a soybean oil
extraction facility located near Culiacan, Sinaloa, Mexico. The facility was
designed with state of the art equipment. The plant is in excellent condition
and has only been in operation a total of 1000 hours. Production capacity is
approximately 7 million gallons of oil/year, plus feed meal by-product.
Equipment in the plant includes oil extraction machinery, rail siding for
transportation, meal and seed/bean unloading and loading equipment, oil storage
tanks, boiler and steam generator equipment and offices and labs. Immediately
upon its acquisition, the Company hired a crew to refurbish the plant, which is
now ready for operation. In the second action, the Company entered into
agreements with the farmers in the region to allow purchase of soybeans at a set
price for a 15 year period. This will provide price certainty for raw material
supplies.
Year 2000 Disclosure
- --------------------
Many existing computer programs use only two digits to identify a year in
the date field. These programs were designed and developed without considering
the impact of the upcoming change in the century. If not corrected, many
computer applications could fail or create erroneous results by or at the Year
2000. As a result, many companies will be required to undertake major projects
to address the Year 2000 issue. Because
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the Company has nominal assets, including no personal property such as
computers, it is not anticipated that the Company will incur any negative impact
as a result of this potential problem.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS - NONE
ITEM 2. CHANGES IN SECURITIES
On May 5, 1999, the Company issued 742,947 shares of stock from the
treasury to various individuals and entities, bringing the total outstanding
number of shares of Company stock to 10,947,947. The shares were issued in
exchange for cash and membership in two energy-related limited liability
companies.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -
NONE
ITEM 5. OTHER INFORMATION
On May 15, 1999, the Company donated a hybrid electric vehicle for emission
research to the California Alternative Fuels and Energy Foundation ("CAFE"),
which in turn donated the vehicle to the University of California at Riverside.
CAFE funds research into cleaner burning alternative fuels in order to advance
new transportation and energy technologies. Developments from these studies will
prove invaluable to the Company's alternative fuels division. The testing will
be conducted by UCR's College of Engineering Center for Environmental Research
and Technology ("CE-CERT").
On July 20, 1999 the Company signed a custom production agreement with
NOPEC Corporation of Lakeland, Florida, for the purchase of up to 4 million
gallons of biodiesel fuel for distribution in California with an option to
expand the contract amount to 8 million gallons. NOPEC will be manufacturing the
Company's proprietary "OxyG B-60". The Company has established a fuel
distribution facility with storage tanks in San Bernardino, California. NOPEC
has been producing biodiesel since 1996 in their state of the art production
facility. The product will be a clean, high performance fuel that requires no
modification of diesel engines to meet alternative fuel of air quality
requirements. Further, unlike other alternative fuels, this fuel does not
require special storage facilities, existing storage facilities being sufficient
for the applicable government standards. Oxy G B-60 has better performance, a
higher cetane level (how quickly diesel ignites), greater lubricity, and more
cleaning action than petroleum diesel. Biodiesel fuels have been recognized as
alternative fuels by the United States Department
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of Energy so that use of the Company's Oxy G B-60 in a vehicle qualifies that
vehicle for Alternative Fueled Vehicle Credits (AFV's) under the Energy Policy
Act (EPACT).
Also on July 20, 1999, Company representatives were invited by the National
Renewable Energy Laboratory, the United States Department of Energy and the
National Diesel Board to participate in the Biodiesel "B20" Workshop held at the
South Coast Air Quality Management District headquarters in Diamond Bar,
California. The workshop was attended by a large number of federal, state,
municipal and private fleet owners, air quality regulators, environmental
groups, city managers, legislators, major energy providers, national park and
recreation managers, petroleum suppliers, fleet mechanics and purchasing
managers.
On July 28, 1999, the Company entered into a lease agreement for an 80,000
multi-use building that is part of the former Norton Air Force Base in
Riverside, California. This facility is part of a "free-trade" zone established
to encourage business to locate on the campus. As such, the Company will be
allowed to import goods from overseas without paying taxes unless the finished
product will be sold in the United States. The Company will begin manufacture
and assembly of its "mining cars" for mining customers in the US. The strong,
composite-bodied vehicles now made by the Company in Otay Mesa, Mexico, can now
be made in Riverside. These vehicles resist the inherent corrosion that is a
constant problem in mining.
Finally, on July 30, 1999, the Company was awarded a contract from the Deer
Valley Unified School District (Arizona's largest) for the purchase of biodiesel
fuels for school buses serving the district. The district purchased 6,000
gallons of the Company's Oxy G B-60 biodiesel and delivery was made shortly
after the bid was accepted.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
EX-27 Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a Report on Form 8-K on August 10, 1999, advising of the
resignation of Gary A. Case, CPA, as its principal certifying accountant and the
engagement of Stonefiled Josephson as its principal certifying accountants.
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<TABLE>
SOUTHERN STATES POWER COMPANY, INC.
BALANCE SHEET - July 31, 1999
ASSETS:
<CAPTION>
Unaudited
July 31, 1999
-------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 73,781
Prepaid expenses 11,522
-------------
Total current assets $ 85,303
Property and equipment, net 33,606
Notes receivable:
B.A.T. and Subsidiaries, related parties 9,730
Other 15,000
-------------
24,730
Less allowance for doubtful accounts 24,730
-------------
Total notes receivable -
-------------
Investment in GAMM Projects 1,700,000
Goodwill, net 913,333
Other assets 50,000
-------------
$ 2,782,242
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities-
accounts payable and accrued expenses $ 10,477
Stockholders' deficiency:
Common stock; $0.001 par value, 50,000,000
shares authorized, 11,632,947 shares issued
and outstanding 11,633
Additional paid-in capital 6,000,617
Accumulated deficit (3,240,485)
-------------
Total stockholders' equity 2,771,765
-------------
$ 2,782,242
=============
</TABLE>
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<TABLE>
SOUTHERN STATES POWER COMPANY, INC.
STATEMENTS OF OPERATIONS
<CAPTION>
For the three For the three
months ended months ended
July 31, 1999 July 31, 1998
(Unaudited) (Unaudited)
----------- -----------
<S> <C> <C>
Revenue $ - $ -
Cost of Revenue - -
----------- -----------
Gross profit - -
Operating expenses:
Research and development 26,200 -
Consulting fees 24,618 -
Loss on investment in joint venture in Mexico
with related party 13,680 336,033
General and administrative expenses 198,928 29,013
----------- -----------
Net loss before dividend income (263,426) (365,046)
Dividend income 102 11,517
----------- -----------
Net loss $ (263,324) $ $(353,529)
=========== ===========
Net loss per share -
basic and diluted $ (0.02) $ (0.06)
========== ==========
Weighted average number of shares outstanding -
basic and diluted 11,494,449 6,401,304
========== ==========
</TABLE>
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<TABLE>
SOUTHERN STATES POWER COMPANY
STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<CAPTION>
For the three For the three
months ended months ended
July 31, 1999 July 31, 1998
(Unaudited) (Unaudited)
---------- ----------
<S> <C> <C>
Cash flows provided by (used for)
operating activities:
Net loss $ (263,324) $ (353,529)
---------- ----------
Adjustments to reconcile net income
(loss) to net cash provided by (used for)
operating activities:
Stocks issued in exchange for services - -
Amortization of goodwill 116,667 -
Write off of organization costs - -
Changes in assets and liabilities:
(Increase) decrease in assets:
Prepaid expenses (11,147) -
Other assets (50,000) -
Notes receivable - -
(Increase) decrease in assets:
accounts payable and accrued expenses (6,962) 8,913
---------- ----------
Total adjustments 48,558 8,913
---------- ----------
Net cash provided by operating activities (214,766) (344,616)
Cash flows provided by (used for)
investing activities:
purchase of property and equipment (1,606) -
---------- ----------
Cash flows provided by (used for)
financing activities:
proceeds from issuance of common stocks 240,000 398,140
---------- ----------
Net increase (decrease) in cash 23,628 53,524
Cash, beginning of year (775,097) 1,000,000
---------- ----------
Cash, end of year $ (751,469) $1,053,524
---------- ----------
Supplemental disclosure of non-cash
investing and financing activities:
Issuance of common stock in exchange
for investments $1,700,000 -
========== ==========
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 the
Registrant has duly caused this amended report to be signed on its behalf by the
undersigned hereunto duly authorized.
SOUTHERN STATES POWER COMPANY, INC.
By: s/ Heber C. Bishop
------------------------------
Heber C. Bishop,
President
Dated: November 3, 1999
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SOUTHERN STATES POWER COMPANY, INC.
Exhibit Index to Quarterly Report on Form 10-QSB/A 1
For the Quarter Ended July 31, 1999
EXHIBITS Page No.
EX-27 Financial Data Schedule. . . . . . . . . . . . . . . . . . . . . .12
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS FOR THE THREE MONTH PERIOD ENDED JULY 31, 1999,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-2000
<PERIOD-END> JUL-31-1999
<CASH> 73,781
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 85,303
<PP&E> 33,606
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,782,242
<CURRENT-LIABILITIES> 10,477
<BONDS> 0
0
0
<COMMON> 11,633
<OTHER-SE> 2,760,132
<TOTAL-LIABILITY-AND-EQUITY> 2,782,242
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 263,426
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (263,324)
<INCOME-TAX> 0
<INCOME-CONTINUING> (263,324)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (263,324)
<EPS-BASIC> (.02)
<EPS-DILUTED> (.02)
</TABLE>
