<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended June 30, 2000
OR
Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from to
--------- ---------.
Commission File No: 0-29337
SUMMIT BROKERAGE SERVICES, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 59-3041826
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
25 FIFTH AVENUE
INDIATLANTIC, FLORIDA 32903
(321) 724-2303
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
CLASS OUTSTANDING AS OF AUGUST 10, 2000
----- ---------------------------------
Common Stock
Par value $.0001 per share 4,548,525
Transitional Small Business Disclosure Format Yes [ ] No [X]
<PAGE> 2
EXPLANATORY NOTE
This Form 10-QSB/A amends the Form 10-QSB filed by Summit Brokerage Services,
Inc. (the "Company") on August 14, 2000 to correct a scrivener's error on the
cover page of the 10-QSB. The Company has made all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the time
the Company has been a reporting company, and has been subject to such filing
requirements for the past 90 days. Therefore, the applicable box on the cover
page of this Form 10-QSB/A is marked "Yes."
Except for the cover page as revised herein, the information contained in the
Form 10-QSB filed on August 14, 2000 is reproduced in this Form 10-QSB/A in its
entirety.
<PAGE> 3
SUMMIT BROKERAGE SERVICES, INC.
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I - FINANCIAL INFORMATION:
Item 1. Financial Statements
Certified Public Accountant's Review Report 3
Consolidated Statements of Financial Condition 4
Consolidated Statements of Income (Loss) for the Six Months Ended and the Three
Months Ended June 30, 2000 and 1999 5
Consolidated Statements of Cash Flows for the Six Months Ended
June 30, 2000 and 1999 7
Notes to Financial Statements 9
Item 2. Management's Discussion and Analysis 10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submissions of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 12
</TABLE>
FORWARD LOOKING STATEMENTS
This Report contains forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended and Section 27A
of the Securities Act of 1933, as amended. When used in this Report, the words
"may," "will," "expect," "anticipate," "continue," "estimate," "project" or
"intend" and similar expressions identify forward-looking statements regarding
events, conditions and financial trends in connection with our future plan of
operations, business strategy, operating results and financial position.
Discussions containing such forward-looking statements may be found in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations under the captions "Comparison of Six Months Ended June 30, 2000 and
June 30, 1999," and "Liquidity and Capital Resources," below. Current
shareholders and prospective investors are cautioned that any forward-looking
statements are not guarantees of future performance. Such forward-looking
statements by their nature involve substantial risks and uncertainties, certain
of which are beyond the Company's control, and actual results for future periods
could differ materially from those discussed in this Report, depending on a
variety of important factors, among which are the success or failure of
management's efforts to implement its business strategy; the level of
acquisition opportunities available to the Company and the Company's ability to
price and negotiate such transactions on a favorable basis; the Company's
ability to properly manage growth and successfully integrate acquired companies
and operations; the Company's ability to compete with major established
companies; the Company's ability to attract and retain qualified personnel, and
other risks which are described in the Company's Form 10-SB, as amended, and as
may be described from time to time in the Company's other filings with the SEC.
2
<PAGE> 4
SUMMIT BROKERAGE SERVICES, INC.
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Board of Directors and Shareholders
Summit Brokerage Services, Inc. and Subsidiaries
Indialantic, Florida
We have reviewed the consolidated statements of financial condition of Summit
Brokerage Services, Inc. and Subsidiaries as of June 30, 2000 and the related
consolidated statements of income (loss) for the six months and three months
ended June 30, 2000, and the consolidated statement of cash flows for the six
months ended June 30, 2000. These financial statements are the responsibility of
the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the aforementioned financial statements for them to be in conformity
with generally accepted accounting principles.
/s/ Hoyman, Dobson & Company, P.A.
Hoyman, Dobson & Company, P.A.
Melbourne, Florida
July 27, 2000
3
<PAGE> 5
SUMMIT BROKERAGE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS JUNE 30, 2000 DECEMBER 31,
(REVIEWED) 1999
------------- ------------
<S> <C> <C>
Cash 281,371 $ 408,957
Cash with clearing broker 25,149 25,132
Investments 14,825 --
Commissions receivable 743,325 463,356
Prepaid expenses 23,322 27,132
Other receivables, net of $31,040 allowance for
doubtful accounts at June 30, 2000 and December 31, 1999 -- --
Due from related party 115,883 102,704
Subscription receivable -- 48,000
Secured demand notes 40,000 --
Property and equipment at cost, less accumulated
Depreciation of $86,753 and $70,970 at June 30, 2000
and December 31, 1999, respectively 143,990 79,267
Deferred tax asset, net of valuation allowance of $273,860
and $283,860 at June 30, 2000 and December 31, 1999,
respectively -- --
----------- -----------
TOTAL ASSETS 1,387,865 $ 1,154,548
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable $ 88,482 $ 63,896
Accrued commission expense 570,228 645,925
Deferred income 20,697 24,667
Capital lease payable 12,055 --
----------- -----------
Total liabilities 691,462 734,488
----------- -----------
LIABILITIES SUBORDINATED TO CLAIMS OF GENERAL CREDITORS 40,000 --
----------- -----------
STOCKHOLDERS' EQUITY
Common stock, par value $.0001 per share. Authorized 10,000,000 shares,
4,560,997 shares issued and 4,544,925 shares outstanding at June 30, 2000,
4,541,751 issued and 4,538,132 outstanding at December 31, 1999 455 454
Additional paid-in capital 2,588,344 2,559,389
Unearned stock compensation (340,183) (517,223)
Treasury stock, at cost (70,206) (18,578)
Subscriptions receivable (45,250) (94,000)
Accumulated deficit (1,476,757) (1,509,982)
----------- -----------
Total stockholders' equity 656,403 420,060
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,387,865 $ 1,154,548
=========== ===========
</TABLE>
See accompanying accountant's review report and notes to financial statements
4
<PAGE> 6
SUMMIT BROKERAGE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
-------------------------------
JUNE 30, 2000 JUNE 30, 1999
(REVIEWED) (UNAUDITED)
------------- -------------
<S> <C> <C>
REVENUES
Commissions $ 4,370,720 $ 1,901,076
Interest and dividends 16,991 8,086
Other 13,721 36,995
----------- -----------
4,401,432 1,946,157
----------- -----------
EXPENSES
Commissions 3,400,225 1,354,893
Occupancy 59,362 58,876
Amortization of unearned stock compensation 205,996 84,960
Management fees -- 538,933
Other operating expenses 702,624 224,142
----------- -----------
4,368,207 2,261,804
----------- -----------
NET INCOME (LOSS) BEFORE INCOME TAXES 33,225 (315,647)
PROVISION FOR INCOME TAXES -- --
----------- -----------
NET INCOME (LOSS) $ 33,225 $ (315,647)
=========== ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 4,535,384 3,972,904
=========== ===========
WEIGHTED AVERAGE COMMON SHARES AND
DILUTIVE POTENTIAL COMMON SHARES
OUTSTANDING 4,592,543 3,972,904
=========== ===========
BASIC EARNINGS PER SHARE $ 0.0073 $ (0.0794)
=========== ===========
DILUTED EARNINGS PER SHARE $ 0.0072 $ (0.0794)
=========== ===========
</TABLE>
See accompanying accountant's review report and notes to financial statements
5
<PAGE> 7
SUMMIT BROKERAGE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
---------------------------------
JUNE 30, 2000 JUNE 30, 1999
(REVIEWED) (UNAUDITED)
--------------- --------------
<S> <C> <C>
REVENUES
Commissions $ 2,461,680 $ 1,326,063
Interest and dividends 10,667 5,254
Other 3,170 29,417
----------- -----------
2,475,517 1,360,734
----------- -----------
EXPENSES
Commissions 1,946,083 919,584
Occupancy 29,728 29,938
Amortization of unearned stock compensation 102,998 44,553
Management fees -- 254,226
Other operating expenses 359,371 100,617
----------- -----------
2,438,180 1,348,918
----------- -----------
NET INCOME BEFORE INCOME TAXES 37,337 11,816
PROVISION FOR INCOME TAXES -- --
----------- -----------
NET INCOME $ 37,337 $ 11,816
=========== ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 4,535,384 3,972,904
=========== ===========
WEIGHTED AVERAGE COMMON SHARES AND
DILUTIVE POTENTIAL COMMON
SHARES OUTSTANDING 4,592,543 3,972,904
=========== ===========
BASIC EARNINGS PER SHARE $ 0.0082 $ 0.0030
=========== ===========
DILUTED EARNINGS PER SHARE $ 0.0081 $ 0.0030
=========== ===========
</TABLE>
See accompanying accountant's review report and notes to financial statements
6
<PAGE> 8
SUMMIT BROKERAGE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
-------------------------------
JUNE 30, 2000 JUNE 30, 1999
(REVIEWED) (UNAUDITED)
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers $ 4,104,472 $ 1,718,399
Cash paid to suppliers and employees (4,262,328) (1,997,258)
Interest received 16,991 8,086
----------- -----------
Net cash used in operating activities (140,865) (270,773)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments (14,825) --
Purchase of property and equipment (10,753) (8,095)
----------- -----------
Net cash used in investing activities (25,578) (8,095)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of treasury stock (65,331) --
Issuance of treasury stock 13,703 --
Proceeds received from subscription receivable 96,750 --
Payments on capital lease obligation (6,248) --
Issuance of common stock -- 201,000
----------- -----------
Net cash provided by financing activities 38,874 201,000
----------- -----------
NET DECREASE IN CASH AND
CASH EQUIVALENTS (127,569) (77,868)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 434,089 132,181
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 306,520 $ 54,313
=========== ===========
</TABLE>
7
<PAGE> 9
SUMMIT BROKERAGE SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
-------------------------------
JUNE 30, 2000 JUNE 30, 1999
(REVIEWED) (UNAUDITED)
------------- -------------
<S> <C> <C>
RECONCILIATION OF NET INCOME (LOSS ) TO
NET CASH USED IN OPERATING ACTIVITIES
Net income (loss) $ 33,225 $ (315,647)
Adjustments to reconcile net income (loss) to net
cash used in operating activities
Depreciation 15,612 15,683
Amortization of unearned stock
compensation/expense 205,996 84,960
Increase in commissions receivable (279,969) (198,482)
Decrease in prepaid expenses 3,810 24,725
Increase in due from related party (64,458) (32,314)
Increase in other receivables -- (21,190)
Decrease in other assets -- 5,289
Increase in accounts payable 24,586 16,994
Increase (decrease) accrued commission expense (75,697) 149,209
Decrease in deferred income (3,970) --
----------- -----------
Net cash used in operating activities $ (140,865) $ (270,773)
=========== ===========
Cash and cash equivalents for the purpose of this
statement consisted of the
following at June 30:
Cash $ 281,371 $ 28,951
Cash with clearing broker 25,149 25,362
----------- -----------
$ 306,520 $ 54,313
=========== ===========
</TABLE>
SUPPLEMENTAL SCHEDULE OF NON CASH INVESTING AND FINANCING ACTIVITIES:
In the fiscal quarter ended March 31, 2000, the Company issued a $40,000 secured
demand note for $40,000 of subordinated debt.
In the fiscal quarter ended March 31, 2000, the Company issued 13,168 shares of
common stock for $28,956 of unearned compensation.
In the fiscal quarter ended June 30, 2000, the Company obtained $69,582 of
equipment in exchange for a reduction in due from related party of $51,279 and
assuming a capital lease obligation of $18,303.
8
<PAGE> 10
SUMMIT BROKERAGE SERVICES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - GENERAL
The consolidated financial statements for the six months and three months ended
June 30, 2000 reflect all adjustments (consisting only of normal recurring
adjustment) which are, in the opinion of management, necessary for a fair
presentation of the financial position and operating results for the interim
period. The consolidated financial statements should be read in conjunction with
the consolidated financial statements and notes thereto, together with
management's discussion and analysis of financial condition and results of
operations, contained in the Company's Annual Report on Form 10-SB for the
fiscal year ended December 31, 1999. The results of operations for the six and
three months ended June 30, 2000 are not necessarily indicative of the results
for the entire fiscal year ending December 31, 2000.
NOTE 2 - LIABILITIES SUBORDINATED TO CLAIMS OF GENERAL CREDITORS
On March 31, 2000, the Company entered into a secured demand note collateral
agreement with a corporation 100% owned by Summit's majority shareholder. The
note is due on April 30, 2001 and accrues interest at 12.0% per annum. The
subordinated borrowing is available in computing net capital under the SEC's
uniform net capital rule. To the extent that such borrowings are required for
the Company's continued compliance with minimum net capital requirements, it may
not be repaid.
NOTE 3 - RELATED PARTY TRANSACTION
During the quarter ended June 30, 2000, the Company purchased fixed assets with
a net book value of $69,582 from a company owned by the majority stockholder of
the Company. Payment for these assets was made by reducing $51,280 of a
receivable due from the related party and assuming an $18,302 capital lease
obligation on the acquired assets.
NOTE 4 - STOCK OPTIONS
On May 16, 2000, the Company cancelled all previously issued and outstanding
options to purchase the Company's common stock, none of which had been
exercised. In replacement thereof, the Company granted stock options to its
officers, directors and certain employees to purchase an aggregate of 1,037,878
shares of common stock at an exercise price of $2.50 per share. The exercise
price is not less than 85% of the market price, therefore, under APB Number 25,
the stock option plan is not considered to be compensatory. Accordingly, no
compensation expense has been recognized in the financial statements.
NOTE 5 - COMMITMENTS AND CONTINGENCY
On May 16, 2000, the two-year employment agreement with William R. Turner (the
"Turner Employment Agreement") was amended. Mr. Turner will, effective January
1, 2000 through the remaining term of the original agreement, forego his rights
to receive 15,000 shares of company stock per year and his rights to receive
100,000 options (50,000 options each year of the term). In lieu of these items,
the Company granted to Mr. Turner on May 16, 2000, 160,000 options of the
company's common stock exercisable at $2.50 per share. All other terms and
conditions of the agreement remain the same. Effective August 16, 2000, Mr.
Turner tendered his resignation to the Company for personal reasons and he will
retain 80,000 options of 160,000 options granted pursuant to his employment
agreement.
On May 16, 2000, the Company entered into employment agreements with Mr. Richard
Parker, (the "Parker Employment Agreement"), the Company's Chairman and CEO and
Mr. Mark F. Caulfield (the "Caulfield Employment Agreement"), the Company's
Chief Financial Officer. Both agreements commenced on January 1, 1998 and will
expire December 31, 2001. The Parker Agreement provides that in consideration
for Mr. Parker's services, he is to be paid a salary of $155,000 in year 2000
and his salary will be increased by $5,000 per year each year thereafter. Also
on May 16, 2000, Mr. Parker was granted 320,000 common stock options. Options
will be granted each year thereafter at a rate of 100,000 shares annually. The
Caulfield Employment Agreement provides that in consideration for Mr.
Caulfield's services, he is to be paid a salary of $60,000. This salary will be
increased $5,000 per year each year thereafter. Mr. Caulfield also was granted
on May 16, 2000 160,000 common stock options. Options will be granted each year
thereafter at a rate of 50,000 shares annually. The exercise price under both
employment agreements is $2.50 per share.
No compensation has been recorded under APB 25, for the shares received since
the exercise price is not less than 85% of the market price on the date granted.
These options have been included in Note 4.
9
<PAGE> 11
SUMMIT BROKERAGE SERVICES, INC.
JUNE 30, 2000
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis of the Company's financial condition and
results of its operations for the six month periods ended June 30, 2000 and
1999, should be read in conjunction with the Company's financial statements
included elsewhere herein. When used in the following discussions, the words
"believes," "anticipates," "intends," "expects," and similar expressions are
intended to identify forward-looking statements. Such statements are subject to
certain risks and uncertainties, which could cause results to differ materially
from those projected.
RESULTS OF OPERATIONS
COMPARISON OF SIX MONTHS ENDED JUNE 30, 2000 AND JUNE 30, 1999
Revenues. Revenues for the six months ended June 30, 2000 rose to
$4,401,432, an increase of $2,455,275 or 126% over the six months ended June 30,
1999. This change was due to the increase in new branch offices from 1999 to
2000 (from 32 to 51,) higher revenues from existing offices (those added prior
to 2000,) and the increase in new offices that employ higher producing
registered representatives.
Expenses. Expenses for the six months ended June 30, 2000 increased
by $2,106,403 or 93% to $4,368,207 from $2,261,804 for the six months ended June
30, 1999. The higher expenses were largely attributable to the related direct
costs of the increased revenues - commissions expense (the payments to the
registered representatives for their portion of the revenue). Such commission
expenses were $3,400,225 for the six months ended June 30, 2000 compared with
$1,354,893 for the comparable period in 1999. The Company also incurred higher
non-cash expenses for amortization of unearned stock compensation in the amount
of $205,996 for the six months ended June 30, 2000, compared with $84,960 for
the comparable period in 1999.
Management fees expense as a category was eliminated on January 1,
2000 due to the termination of the agreement with the former management company,
Summit Group of Companies, Inc., effective January 1, 2000. The services were
replaced internally by the Company, and the expenses are now reflected in
various general and administrative categories, such as salaries and wages. In
the six months ended June 30, 1999, total management fees expense was $538,933.
Net Income. Net income for the six months ended June 30, 2000 was
$33,225, an increase of $348,872 or 111% from a loss of ($315,647) during the
six months ended June 30, 1999. Net income for the six months ended June 30,
2000 was .75% of revenues compared to a net loss of (16.2%) for the six months
ended June 30, 1999. The increase in income from operations overall resulted
primarily from increased revenues and gross profits. The Company's basic
earnings per share were $0.0073 for the six months ended June 30, 2000 compared
to a per share loss of ($0.0794) for the six months ended June 30, 1999. The
Company's diluted earnings per share were $0.0072 for the six months ended June
30, 2000 compared to a per share loss of ($0.0794) for the six months ended June
30, 1999.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities totaled $140,865 during the
six months ended June 30, 2000, compared to net cash used of $270,773 for the
comparable period in 1999. The decrease in cash used by operating activities is
due to the Company's overall increase in revenue from its operations.
Cash used in investing activities (capital expenditures) totaled
$25,578 and $8,095 during the six months ended June 30, 2000 and 1999,
respectively. During 2000 and 1999, capital expenditures were primarily
comprised of the Company's investments in securities and replacement of office
computer equipment.
10
<PAGE> 12
Net cash provided by financing activities during the six months
ended June 30, 1999 totaled $201,000 from the issuance of common stock through a
limited private placement. No such issuance occurred during the six months ended
June 30, 2000.
On March 31, 2000 the Company entered into a secured demand note
collateral agreement with a corporation 100% owned by the Company's majority
shareholder. The note is due on April 30, 2001 and accrues interest at 12% per
annum. The subordinated borrowing is available in computing net capital under
the SEC's uniform net capital rule. To the extent that such borrowings are
required for the Company's continued compliance with minimum net capital
requirements, it may not be repaid.
The Company anticipates, based on its currently proposed plans and
assumptions relating to its operations, that the Company's existing working
capital and anticipated cash flows from the Company's operations will be
sufficient to satisfy the Company's cash requirements for at least twelve
months. As the Company continues to grow, additional equity and/or debt
offerings may be considered, in part or in combination, as the situation
warrants. In the normal course of business, the Company evaluates acquisitions
of businesses that compliment the Company's business. In connection with any
acquisitions, the Company may issue additional securities, which could result in
dilution for existing shareholders. In addition, in the event the Company's
plans change or its assumptions change or prove to be inaccurate, or if
projected cash flow otherwise proves insufficient to fund operations, the
Company might need to seek other sources of financing to conduct its operations.
There can be no assurance that any such other sources of financing would be
available when needed, on commercially reasonable terms, or at all.
Inflation. Inflation has not been a major factor in the Company's
business since inception. There can be no assurances that this will continue if
and when the Company completes an acquisition or merger.
CAUTIONARY STATEMENT
This Quarterly Report on Form 10-QSB contains certain
forward-looking statements that involve a number of risks and uncertainties.
Such forward-looking statements are within the meaning of that term in Section
27A of the Securities Act of 1933, as amended and Section 21E of the Securities
Act of 1934, as amended. Factors that could cause actual results to differ
materially from those projected in such forward-looking statements include the
following: the competitive environment for the Company's products and services,
movements in the stock markets, and changes in the US economy. The words
"believe," "estimate," "expect," "intend," "anticipate," "will," "could," "may,"
and similar expressions and variations thereof identify certain of such
forward-looking statements, which speak only as of the dates on which they were
made. The Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events, or otherwise. Readers are cautioned that any such forward-looking
statements are not guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially from those
indicated in the forward-looking statements as a result of various factors.
Readers are cautioned not to place undue reliance on these forward-looking
statements.
11
<PAGE> 13
SUMMIT BROKERAGE SERVICES, INC.
JUNE 30, 2000
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not involved in any legal proceedings or litigation, and
the Company is not aware of any pending litigation.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(a) Not applicable.
(b) Not applicable.
(c) On May 16, 2000, the Company canceled all outstanding options to
purchase the Company's common stock, none of which had been exercised.
In replacement thereof, the Company granted stock options to its
officers, directors and certain employees to purchase an aggregate of
1,037,878 shares of common stock at an exercise price of $2.50 per
share (the "Options"). The Company is relying on the exemption provided
under Section 4(2) of the Securities Act of 1933, as amended for the
issuance of these options. Information about the Company was provided
to the optionees or made available to them, along with the opportunity
to ask questions of management about the information provided or made
available. The options contain a provision restricting their transfer
which optionees acknowledge upon execution of their option agreements.
(d) Not applicable.
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
During the fiscal quarter ended June 30, 2000, the Company's board of
directors approved Amended and Restated Bylaws for the Company pursuant to such
authority vested in the Board under the Company's Articles of Incorporation and
then existing Bylaws. The Amended and Restated Bylaws contain, among other
things, advance notice provisions in connection with shareholder proposals. A
copy of the Amended and Restated Bylaws is attached to this Report as Exhibit
3.1.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS.
<TABLE>
<CAPTION>
NUMBER NAME
------ -------------------------------------------------------------------
<S> <C>
3.1 Amended and Restated Bylaws of the Company.
10.1 Form of Stock Option Agreement for Non-Qualified Options.
10.2 Employment Agreement between the Company and Richard Parker, dated
May 16, 2000.
10.3 Employment Agreement between the Company and Mark F. Caulfield,
dated May 16, 2000.
</TABLE>
12
<PAGE> 14
<TABLE>
<S> <C>
10.4 Addendum to Employment Agreement between the Company and William R.
Turner, dated May 16, 2000.
10.5 Employment Agreement between the Company and William Turner, dated
September 22, 1999.
27.1 Financial Data Schedule (submitted only in electronic format for SEC
use only).
</TABLE>
(B) REPORTS ON FORM 8-K
There were no reports on Form 8-K filed by the Company during the quarter
ended June 30, 2000.
13
<PAGE> 15
SUMMIT BROKERAGE SERVICES, INC.
SIGNATURES
Pursuant to the requirements 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.
SUMMIT BROKERAGE SERVICES, INC.
Date: August 15, 2000 /s/ Richard Parker
-------------------------------------
Chairman and Chief Executive
Officer (Principal Executive Officer)
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EXHIBIT INDEX
<TABLE>
<CAPTION>
NUMBER NAME
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<S> <C>
3.1 Amended and Restated Bylaws of the Company.
10.1 Form of Stock Option Agreement for Non-Qualified Options.
10.2 Employment Agreement between the Company and Richard Parker, dated May 16, 2000.
10.3 Employment Agreement between the Company and Mark F. Caulfield, dated May 16, 2000.
10.4 Addendum to Employment Agreement between the Company and William R. Turner, dated May 16,
2000.
10.5 Employment Agreement between the Company and William Turner, dated September 22, 1999.
27.1 Financial Data Schedule (submitted only in electronic format for SEC use only).
</TABLE>
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