U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-QSB
Quarterly Report Under
the Securities Exchange Act of 1934
For Quarter Ended: January 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)
December 31
---------------------------------------------------
(Former name, former address and former fiscal year,
if changed last report)
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 January 31, 1999, was
10,205,000 shares.
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS.
The unaudited financial statements for the nine month
period ended January 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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<PAGE>
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, two days into the final quarter
of the fiscal year. The symbol ASSPC was assigned to the
Company.
Revenues
- --------
The Company generated no revenues from operations
during the nine month period ended January 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 January 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.
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
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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.
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.
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
4
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Year 2000. As a result, many companies will be required to
undertake major projects to address the Year 2000 issue. Because
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 - NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -
NONE
ITEM 5. OTHER INFORMATION - NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -
(a) Exhibits
EX-27 Financial Data Schedule
(b) Reports on Form 8-K
On or about February 10, 1999, the Company filed
a report on Form 8-K wherein the Company expressed its desire to
revert to its original fiscal year end of April 30 after having
changed it to December 31 in an earlier report. After discussing
the matter with Company financial advisors, the Board of
Directors decided that an April 30 fiscal year end would be in
the best interests of the Company.
5
<PAGE>
SOUTHERN STATES POWER COMPANY, INC.
-----------------------------------
(a Delaware corporation)
FINANCIAL STATEMENTS
AND
COMPILATION REPORT
For the Period Ended January 31, 1999
-------------------------------------
and For the Period January 31, 1998
-----------------------------------
6
<PAGE>
INDEX
-----
PAGE
----
Compilation Report 1
Balance Sheet 2
Statement of Revenues & Expenses & Retained Earnings 3
Statement of Cash Flows 4
Notes to Financial Statements 5-6
7
<PAGE>
Gary A. Case
Certified Public Accountant
3230 E. Imperial Highway, Ste. 200
Brea, California 92821
Tel: 714/986-1850 Member:
Fax: 714/986-1855 Calif Society of CPAs
[email protected] Licensed in California and Florida
_________________________________________________________________
COMPILATION REPORT
------------------
Board of Directors
Southern States Power Company, Inc.
Shreveport, Louisiana
Dear Board of Directors:
We have compiled the accompanying statement of financial
condition of Southern States Power Company, Inc. (a Delaware
Corporation) as of January 31, 1999 and January 31, 1998 in
accordance with standards established by the American Institute
of Certified Public Accountants.
A compilation is limited to presenting in the form of financial
statements, information that is the representation of the
corporation whose financial statement is presented. We have not
audited or reviewed the accompanying financial statement and,
accordingly, do not express an opinion or any other form of
assurance on it.
s/Gary A. Case
_____________________________________
GARY A. CASE, CPA
Brea, California
March 11, 1999
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<TABLE>
SOUTHERN STATES POWER COMPANY, INC.
(a Delaware corporation)
BALANCE SHEET
as of 1/31/99 and 1/31/98
<CAPTION>
ASSETS: 1/31/99 1/31/98
---------- ----------
<S> <C> <C>
Current Assets:
Cash $ 359,447 $ 0
Inventory 103,000 0
Loan Receivable - S/T 45,000 0
---------- ----------
Total Current Assets 507,447 0
Fixed Assets 12,000 0
Investment in Joint Venture (Note 2) 588,550 0
Notes Receivable 26,000 0
Organization Cost (net of $1834
Accumulated amortization) 8,166 0
---------- ----------
Total Assets $1,142,163 $ 0
========== ==========
LIABILITIES:
Current Liabilities:
Accounts Payable $ 2,616 $ 1,900
---------- ----------
Total Liabilities 2,616 1,900
---------- ----------
STOCKHOLDERS' EQUITY
Common Stock; $0.001 par value
50,000,000 shares authorized,
10,205,000 shares issued and
outstanding $ 10,205 500
Additional Paid-In Capital 1,178,295 0
Retained Earnings ( 48,953) (2,400)
---------- ----------
Total Stockholders' Equity 1,139,547 (1,900)
---------- ----------
Total Liabilities and
Stockholders' Equity $1,142,163 $ 0
========== ==========
</TABLE>
[FN]
See accompanying notes and compilation report.
-2-
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<PAGE>
<TABLE>
SOUTHERN STATES POWER COMPANY, INC.
(a Delaware corporation)
STATEMENT OF REVENUES & EXPENSES AND RETAINED EARNINGS
<CAPTION>
Period
For the For the 8/31/88
Period Period Inception)
Ended Ended to
1/31/99 1/31/98 1/31/99
-------- ------- --------
<S> <C> <C> <C>
REVENUES:
Dividend Income $ 25,654 $ 0 $ 25,654
-------- ------- --------
Total Revenues $ 25,654 $ 0 $ 25,654
-------- ------- --------
EXPENSES:
Amortization Expense $ 1,834 $ 1,000 $ 2,334
Accounting 5,400 0 6,400
Bank Charges 1,159 0 1,159
Legal 20,274 0 20,274
License Fee Expense 16,000 0 16,000
Printing Expense 1,081 0 1,081
Office Expense 394 0 394
Rent Expense 375 0 375
Supplies Expense 3,348 0 3,348
Taxes & License Expense 359 100 1,359
Telephone Expense 3,850 0 3,850
Travel Expenses 18,033 0 18,033
-------- ------- --------
Total Expenses $72,107 $ 1,100 $ 74,607
-------- ------- --------
Net Income ($ 46,453) ($ 1,100) ($ 48,953)
Retained Earnings a/o 1/31/97 ( 1,300)
Retained Earnings a/o 1/31/98 ($ 2,400)
=======
Retained Earnings a/o 5/1/98 ( 2,500)
-------- --------
Retained Earnings a/o 1/31/99 ($ 48,953) $ 48,953
======== ========
</TABLE>
[FN]
See accompanying notes and compilation report.
-3-
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<PAGE>
<TABLE>
SOUTHERN STATES POWER COMPANY, INC.
(A Delaware corporation)
STATEMENT OF CASH FLOW
<CAPTION>
Period
For the For the 8/31/88
Period Period (Inception)
Ended Ended To
1/31/99 1/31/98 1/31/99
---------- -------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income ($ 46,453) ($ 1,100) ($ 48,953)
Adjustments to reconcile net income
to net cash provided from
operating activities:
Amortization 1,834 0 2,334
Increase in Accounts Receivable (45,000) 0 (45,000)
Increase in Inventory (103,000) 0 (103,000)
Increase in Accounts Payable 0 1,100 2,000
---------- -------- ----------
Net Cash Used by Operating
Activities ($ 192,619) $ 0 ($ 192,619)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Fixed Assets ($ 12,000) 0 ($ 12,000)
Acquisition of Environmental Process
Advanced (Joint Venture) ( 588,550) 0 (588,550)
Increase in Notes Receivable ( 26,000) 0 ( 26,000)
Increase in Intangible Assets ( 10,000) 0 ( 10,500)
---------- -------- ----------
Net Cash Used by Investing
Activities ($ 636,550) $ 0 ($ 637,050)
---------- -------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Issuing Common Stock $1,188,000 0 $1,188,500
Proceeds from Loan Payable 616 0 616
---------- -------- ----------
Net Cash Provided by Financing
Activities: $1,188,616 $ 0 $1,189,116
---------- -------- ----------
Net Increase in Cash $ 359,447 $ 0 $ 359,447
CASH AT BEGINNING OF YEAR 0 0 0
---------- -------- ----------
CASH AT END OF YEAR $ 359,447 $ 0 $ 359,447
========== ======== ==========
</TABLE>
[FN]
See accompanying notes and compilation report.
-4-
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<PAGE>
SOUTHERN STATES POWER COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
For the Period Ended January 31, 1999 and January 31, 1998
(1) Summary of Significant Accounting Policies:
General:
The Company was incorporated in the state of Delaware on August 31,
1988. The company changed its corporate year end from December 31 to
April 30. The Company merged with Southern States Power Company, Inc.
on July 13, 1998 and was the surviving company.
Business Activity:
The Company has had no operating activity and plans to generate energy
efficient power supply in exchange for fees from customers.
Organization Costs:
The Company's organization costs consists of legal and filing fees,
which were incurred by Southern States Power Company, Inc., and will
be amortized over a 60-month period.
Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Fair Value:
Unless otherwise indicated, the fair values of all reported assets and
liabilities which represent financial instruments, none of which are
held for trading purposes, approximate carrying values of such amounts.
Cash:
The Company maintains its cash in bank deposit accounts which, at times,
may exceed federally insured limits. The Company has not experienced
any losses in such accounts.
Income Taxes:
The Company has not filed required federal income tax returns from
inception through 1997. Due to the late filing of these tax returns a
minimum penalty of $1,000 has been accrued and included in accounts
payable on the balance sheet.
See accompanying compilation report.
-5-
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<PAGE>
SOUTHERN STATES POWER COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
For the Period Ended January 31, 199 and January 31, 1998
(2) Investment in Joint Venture
The company has jointly invested in manufacturing facilities in Mexico.
The company will hold a forty percent (40%) joint venture interest in
said manufacturing facility.
(3) Stockholders' Equity:
Pascal Ventures, Inc. authorized 50,000,000 shares of common stock at a
par value $.001 per share.
On August 31, 1991, Pascal Ventures, Inc. issued 500,000 shares of stock
at $.001 per share for $500. These shares have been issued to ten
individuals based on the cash contributed.
On July 13, 1998, as a result of the Share Exchange Agreement and Plan
of Reorganization between the Company and Southern States Power Company,
Inc., a Louisiana corporation, the shareholder's of the Issuer
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 Power Company, Inc.
for all of the issued and outstanding shares of Southern States Power
Company, Inc.
The Company had a name change after the merger to Southern States Power
Company, Inc.
(4) Subsequent Events:
The Company entered into a five-year agreement with Southern States Gas
Gathering System, LLC to purchase up to 2,000,000 cubic feet of natural
gas per day at $2,600 per million cubic feet in exchange for 350,000
shares of its common stock. The Company may extend this agreement for
another five years, at the end of the initial term, at a price of 5%
below the spot price of natural gas.
The Company also entered into a five year agreement with Southern States
Oil Production, LLC to purchase up to 4,200 gallons of Louisiana light
sweet crude oil per day at a fixed price of $0.38 per gallon in exchange
for 350,000 shares of its common stock. The Company may extend this
agreement for another five years, at the end of the initial term, at a
price of 5% below the spot price of Louisiana light sweet crude oil.
See accompanying compilation report.
-6-
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<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
and Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto
duly authorized.
SOUTHERN STATES POWER COMPANY, INC.
(Registrant)
Dated: March 15, 1999
By: s/Heber C. Bishop
--------------------------------
Heber C. Bishop, President
14
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SOUTHERN STATES POWER COMPANY, INC.
Exhibit Index to Quarterly Report on Form 10-QSB
For the Quarter Ended January 31, 1999
EXHIBITS Page No.
EX-27 Financial Data Schedule . . . . . . . . . . 16
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 1999,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-30-1999
<PERIOD-END> JAN-31-1999
<CASH> 359,447
<SECURITIES> 0
<RECEIVABLES> 45,000
<ALLOWANCES> 0
<INVENTORY> 103,000
<CURRENT-ASSETS> 507,447
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,142,163
<CURRENT-LIABILITIES> 2,616
<BONDS> 0
0
0
<COMMON> 10,205
<OTHER-SE> 1,129,342
<TOTAL-LIABILITY-AND-EQUITY> 1,142,163
<SALES> 0
<TOTAL-REVENUES> 25,654
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 72,107
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (46,453)
<INCOME-TAX> 0
<INCOME-CONTINUING> (46,453)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (46,453)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
