SHOCHET HOLDING CORP
10QSB/A, 2000-09-29
SECURITY BROKERS, DEALERS & FLOTATION COMPANIES
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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                 Amendment No. 1
                                       to
                                   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 July 31, 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 number 1-15733

                              SHOCHET HOLDING CORP.
             (Exact name of registrant as specified in its charter)


      Delaware                                          59-2651232
      ------------                                      -------------------
     (State or other jurisdiction of                    (I.R.S. Employer
      incorporation or organization)                     Identification No.)

        2351 East Hallandale Beach Blvd., Hallandale Beach, Florida 33009
      --------------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                 (954) 454-0304
                              ---------------------
              (Registrant's telephone number, including area code)

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 at September 1, 2000

Common Stock, $0.0001 par value                        2,245,000 shares

<PAGE>

                              SHOCHET HOLDING CORP.
                                   FORM 10-QSB
                  For the quarterly period ended July 31, 2000

                                      Index






Part I - Financial Information                                              Page
                                                                            ----

Item 1.   Financial Statements

     Consolidated Balance Sheet as of July 31, 2000 (Unaudited)                3

     Consolidated Statements of Operations for the six and
       three months ended July 31, 2000 and 1999 (Unaudited)                   4

     Consolidated Statement of Changes in Stockholders' Equity
       for the six months ended July 31, 2000 (Unaudited)                      5

     Consolidated Statements of Cash Flows for the six
       months ended July 31, 2000 and 1999 (Unaudited)                         6

     Notes to Consolidated Financial Statements                                7

Item 2. Management's Discussion and Analysis of Financial
         Condition and Results of Operations                                   9


PART II - OTHER INFORMATION


Item 2 - Changes in Securities                                                13


Signatures                                                                    13










                                       -2-
<PAGE>

<TABLE>
<CAPTION>

               SHOCHET HOLDING CORP. AND SUBSIDIARY
                    CONSOLIDATED BALANCE SHEET
                           July 31, 2000
                            (Unaudited)


<S>                                                                             <C>

ASSETS:
   Cash and cash equivalents                                                    $  6,273,000
   Securities owned at market value                                                  161,000
   Receivable from broker dealers                                                    830,000
   Office furniture equipment and leasehold improvements, net                        749,000
   Goodwill, net                                                                   1,498,000
   Income taxes receivable                                                           138,000
   Other assets                                                                      466,000
                                                                                ------------

        Total Assets                                                            $ 10,115,000
                                                                                ============




LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
   Securities sold, not yet purchased, at market value                          $          -
   Commissions payable                                                               185,000
   Payable to related parties                                                        490,000
   Accrued expenses and other liabilities                                            313,000
   Liabilities subordinated to the claims of general creditors                       500,000
                                                                                ------------

        Total Liabilities                                                          1,488,000
                                                                                ------------


STOCKHOLDERS' EQUITY:
    Preferred stock ($.0001 par value; 1,000,000 shares authorized)
          No shares issued and outstanding )                                               -
    Common stock ($.0001 par value; 15,000,000 shares authorized;
        2,245,000 shares issued and outstanding)                                           -
    Additional paid-in capital                                                    10,196,000
    Accumulated deficit                                                           (1,569,000)
                                                                                ------------

        Total Stockholders' Equity                                                 8,627,000
                                                                                ------------

        Total Liabilities and Stockholders' Equity                              $ 10,115,000
                                                                                ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                      SHOCHET HOLDING CORP. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)



                                                       For the Three Months                     For the Six Months
                                                         Ended July 31,                          Ended July 31,
                                                ------------------------------------    ------------------------------------
                                                      2000               1999                2000                1999
                                                -----------------   ----------------    ----------------   -----------------

<S>                                             <C>                 <C>                 <C>                <C>


REVENUES:
   Commissions                                  $       1,432,000   $      1,688,000    $      3,845,000   $       3,877,000
   Investment banking                                           -                  -             269,000                   -
   Interest                                               102,000            206,000             354,000             396,000
   Other                                                   79,000             25,000             128,000              57,000
                                                -----------------   ----------------    ----------------   -----------------


          Total Revenues                                1,613,000          1,919,000           4,596,000           4,330,000
                                                -----------------   ----------------    ----------------   -----------------

OPERATING EXPENSES:
   Compensation and benefits                            1,038,000          1,028,000           2,710,000           2,300,000
   Occupancy and equipment                                330,000            221,000             477,000             369,000
   Brokerage, clearing and exchange fees                  245,000            319,000             614,000             644,000
   Communications                                         180,000            210,000             499,000             330,000
   Business development                                   384,000             19,000             805,000              43,000
   Other expenses                                         239,000            131,000             508,000             469,000
                                                -----------------   ----------------    ----------------   -----------------

        Total Operating Expenses                        2,416,000          1,928,000           5,613,000           4,155,000
                                                -----------------   ----------------    ----------------   -----------------

Income (loss) before income taxes                        (803,000)            (9,000)         (1,017,000)            175,000

Income tax provision                                           -             (89,000)                 -              (89,000)
                                                -----------------   ----------------    ----------------   -----------------

Income (loss) from continuing operations                 (803,000)           (98,000)         (1,017,000)             86,000
                                                -----------------   ----------------    ----------------   -----------------

Discontinued operations:
 Loss from operations of the discontinued
  on-site day trading segment,
  net of income tax benefit                                    -            (212,000)                 -             (406,000)
                                                -----------------   ----------------    ----------------   -----------------

Net income (loss)                               $        (803,000)  $       (310,000)   $     (1,017,000)  $        (320,000)
                                                =================   ================    ================   =================

BASIC AND DILUTED:
 Net income (loss) from continuing operation    $           (0.36)  $          (0.08)   $          (0.51)  $            0.07
 Net income (loss) from discontinued operations              0.00              (0.18)               0.00               (0.34)
                                                -----------------   ----------------    ----------------   -----------------

   Net income (loss) per common share           $           (0.36)  $          (0.26)   $          (0.51)  $           (0.27)
                                                =================   ================    ================   =================

   Weighted average common shares outstanding           2,245,000          1,200,000           1,983,750           1,200,000
                                                =================   ================    ================   =================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                      SHOCHET HOLDING CORP. AND SUBSIDIARY
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                     For the Six Months Ended July 31, 2000
                                   (Unaudited)






                                               COMMON STOCK            ADDITIONAL                               TOTAL
                                        ---------------------------     PAID-IN         ACCUMULATED          STOCKHOLDERS'
                                           Shares            Amount     CAPITAL           DEFICIT               EQUITY
                                        ------------   ------------   ------------  -------------------   ------------------

<S>                                     <C>            <C>            <C>           <C>                   <C>

Balance at January 31, 2000                1,200,000   $         -    $  2,270,000  $          (552,000)  $        1,718,000

Net proceeds from sale of common stock     1,045,000             -       7,926,000                   -             7,926,000

Net loss for the period                           -              -              -            (1,017,000)          (1,017,000)
                                        ------------   ------------   ------------  -------------------   ------------------

Balance at July 31, 2000                   2,245,000   $         -    $ 10,196,000  $        (1,569,000)  $        8,627,000
                                        ============   ============   ============  ===================   ==================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                      SHOCHET HOLDING CORP. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


                                                                              For the Six Months Ended July 31,
                                                                             ------------------------------------
                                                                                   2000               1999
                                                                             -----------------   ----------------
<S>                                                                          <C>                 <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                                                 $      (1,017,000)  $       (320,000)
    Adjustments to reconcile net loss to net cash flows
        used in operating activities:
           Depreciation and amortization                                               208,000            128,000

   (Increase) decrease operating assets:
           Securities owned at market value                                             29,000           (257,000)
           Receivable from broker dealers                                             (423,000)           (25,000)
           Receivable from related party                                               518,000              3,000
           Income taxes receivable                                                      86,000             91,000
           Deferred IPO costs, net                                                     301,000                  -
           Other assets                                                               (506,000)           (40,000)

   Increase (decrease) in operating liabilities:
           Securities sold , not yet purchased, at market value                        (39,000)            (1,000)
           Commissions payable                                                         (55,000)           (84,000)
           Payable to related parties                                                 (183,000)           287,000
           Accrued expenses and other liabilities                                      (92,000)           (10,000)
           Liabilities subordinated to the claims of general creditors              (1,000,000)                -
                                                                             -----------------   ----------------

   Net cash used in operating activities                                            (2,173,000)          (228,000)
                                                                             -----------------   ----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of office furniture, equipment and leasehold improvements                  (54,000)          (147,000)
                                                                             -----------------   ----------------

   Net cash used in investing activities                                               (54,000)          (147,000)
                                                                             -----------------   ----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from sale of common stock                                               7,926,000                  -
                                                                             -----------------   ----------------

Net cash provided by financing activities                                            7,926,000                  -
                                                                             -----------------   ----------------

Net increase (decrease) in cash and cash equivalents                                 5,699,000           (375,000)

Cash and cash equivalents - beginning of year                                          574,000            868,000
                                                                             -----------------   ----------------

Cash and cash equivalents - end of period                                    $       6,273,000   $        493,000
                                                                             =================   ================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during the year for:
   Interest                                                                  $          51,000   $             -
                                                                             =================   ================
   Income Taxes                                                              $              -    $             -
                                                                             =================   ================
</TABLE>
<PAGE>

                      SHOCHET HOLDING CORP. AND SUBSIDIARY
                   Notes to Consolidated Financial Statements


1.  BASIS OF PRESENTATION

The consolidated  financial statements include the activities of Shochet Holding
Corp. and Shochet Securities,  Inc., its wholly-owned  broker-dealer  subsidiary
(the  "Company" or  "Shochet").  Shochet is engaged  primarily in providing full
service discount brokerage services through six branch offices, all of which are
in  Florida.  In January  2000,  Shochet  commenced  offering  online  brokerage
services through Shochet Online!,  its online  brokerage  division,  through its
website located at www.shochet.com. As of July 31, 2000, Shochet Online! had 880
users  registered  to access to their  brokerage  accounts,  compared  to 330 at
January 31, 2000.

Shochet's  focus is to continue  the  development  of its  presence as a premier
discount broker through  recruitment of registered  representatives,  opening of
new offices and acquisition.  Shochet continues to develop its Internet presence
through the  revamping  of  www.shochet.com  and the  introduction  of its South
Florida  senior-targeted  Internet  portal,  with an estimated launch of October
2000. Additionally,  in June 2000, Shochet introduced Shochet Financial Services
Group,  a  division  which has  commenced  offering  a range of  non-proprietary
financial  services  and  products,   including   financial  planning  services,
insurance products and annuities.  By the end of fiscal 2001, Shochet intends to
offer  investment  adviser  services such as managed money accounts  through its
newly formed subsidiary, Shochet Investment Adviser Corp.

In March 2000,  Shochet Holding Corp. sold 1,045,000  shares of its common stock
in an initial public offering by means of a registration  statement on Form SB-2
filed with the Securities and Exchange  Commission.  The offering,  priced at $9
per  share,  raised  $9.4  million  in gross  proceeds  and $7.9  million in net
proceeds.

All  significant  intercompany  accounts  and  transactions  are  eliminated  in
consolidation.  In Shochet's  opinion,  the  consolidated  financial  statements
reflect all adjustments,  which are all of a normal recurring nature,  necessary
for a fair statement of Shochet's  financial  position and results of operations
for the interim  periods  presented.  These  consolidated  financial  statements
should be read in conjunction  with the  consolidated  financial  statements and
accompanying  notes for the year ended January 31, 2000,  appearing in Shochet's
most recent annual report on Form 10-KSB.  Certain  reclassifications  have been
made to the prior year amounts to conform to the current presentation.

The financial statements in this report conform to generally accepted accounting
principles ("GAAP").  The preparation of financial statements in conformity with
GAAP requires Shochet to make estimates and assumptions that affect the reported
amounts of assets and  liabilities  and  disclosures  of  contingent  assets and
liabilities  at the  date  of the  consolidated  financial  statements  and  the
reported  amounts of revenues and expenses during the reporting  period.  Actual
results could vary from these estimates.

Many factors affect Shochet's  business  activities,  including general economic
and market conditions,  which can result in substantial fluctuations in revenues
and net income. Accordingly,  the results of operations for the six months ended
July 31, 2000 are not necessarily indicative of the results that may be expected
for the entire fiscal year.







                                       -7-
<PAGE>

2.  NET CAPITAL REQUIREMENTS

Because  Shochet  Securities is a  broker-dealer  registered  with the SEC and a
member of the National Association of Securities Dealers, Inc., it is subject to
the SEC's net  capital  rule,  which  requires  the  maintenance  of minimum net
capital. Shochet has elected to compute net capital under the standard aggregate
indebtedness method permitted by the net capital rule. At July 31, 2000, Shochet
Securities had net capital of $1,805,000,  compared to a net capital requirement
of $100,000.

3.  EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
share ("EPS"):
<TABLE>
<CAPTION>

                                                                     Six months ended July 31,
                                                            -------------------------------------------
                                                                 2000                       1999
                                                            ---------------            ----------------
<S>                                                        <C>                         <C>

Numerator for basic and diluted EPS:
   Net income/(loss) from continuing operations             $   (1,017,000)             $       86,000

  Loss from discontinued operations:                                     -                    (406,000)
                                                            ---------------            ----------------

   Net loss                                                 $   (1,017,000)             $     (320,000)
                                                            ===============            ================

Denominator for basic EPS:
     Weighted-average common shares
           outstanding - basic and diluted                       1,983,750                   1,200,000
                                                            ===============            ================

Basic and diluted EPS from continuing operations            $        (0.51)             $         0.07
Basic and diluted EPS from discontinued operations                        -                      (0.34)
                                                            ---------------            ----------------

Basic and diluted EPS:                                      $        (0.51)             $        (0.27)
                                                            ===============            ================
</TABLE>

4. STOCKHOLDERS' EQUITY

On March 15, 2000,  Shochet Holding sold 1,045,000 shares of its common stock in
an initial public offering.  The stock was priced at $9 per share, raising gross
proceeds of $9,405,000 and net proceeds of $7,926,000.

On the  date of the  IPO,  Shochet  granted  to  certain  of its key  executives
incentive stock options to purchase an aggregate of 108,000 shares of its common
stock at an exercise price of $9.00 per share under its 1999 performance  equity
plan,  referred to in this report as the "Plan". The options vest in three equal
annual installments  commencing on the one-year  anniversary date of the IPO and
expire on the 10-year anniversary of the date of vesting.



                                       -8-
<PAGE>

On April 11,  2000 and May 11,  2000,  Shochet  granted  to  certain  of its key
employees  incentive stock options to purchase an aggregate of 36,000 and 70,000
shares of its common  stock,  respectively,  at an  exercise  price of $9.00 per
share  under the Plan.  The  options  vest in three  equal  annual  installments
commencing  on the one-year  anniversary  date of the option grant and expire on
the 10-year anniversary of the date of vesting.

On May 11, 2000,  Shochet  granted to certain of its directors  incentive  stock
options to  purchase an  aggregate  of 30,000  shares of its common  stock at an
exercise  price of $9.00 per share under the Plan.  The options  vest on May 11,
2001 and expire on May 11, 2006.

Shochet has adopted the  disclosure-only  provisions  of  Statement of Financial
Accounting  Standards No. 123 "Accounting for  Stock-Based  Compensation"  (SFAS
123).  Accordingly,  no compensation  cost has been recognized for stock options
granted to employees of Shochet under the Plan.

5. COMMITMENTS AND CONTINGENCIES

Shochet  Securities  is involved in various legal  proceedings  arising from its
business activities.  Shochet believes that resolution of these proceedings will
not have any material adverse effect on its consolidated  financial  position or
results of operations.

6. NEW ACCOUNTING PRONOUNCEMENTS

In June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting  Standards No. 133, "Accounting for Derivative  Instruments
and  Hedging  Activities"  (SFAS  133).  SFAS  133  establishes  accounting  and
reporting  standards for derivative  instruments,  including certain  derivative
instruments   embedded  in  other  contracts,   (collectively   referred  to  as
derivatives)  and for hedging  activities.  It requires that an entity recognize
all  derivatives  as either assets or  liabilities in the statement of financial
position and measure those instruments at fair value. The implementation date of
SFAS 133 was amended by SFAS 137 and is now effective for all fiscal quarters of
fiscal years beginning after June 15, 2001. Shochet is currently  reviewing SFAS
133 to see what impact, if any, it will have.

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

The following  analysis of the consolidated  results of operations and financial
condition  should  be  read  in  conjunction  with  the  Consolidated  Financial
Statements  included  in  Item  1 of  this  report  and  with  the  Management's
Discussion  and  Analysis  of  Financial  Condition  and  Results of  Operations
included in Shochet's  Annual  Report on Form 10-KSB for the year ended  January
31, 2000.

Business Environment

Our primary business activity,  full service discount  brokerage,  is subject to
general  economic and market  conditions and the volatility of trading  markets.
Industry-wide  trading  volume for the  quarter  ended  July 31,  2000 was below
average compared to the previous quarter.

The  results  of  operations  for the six  months  ended  July 31,  2000 are not
necessarily indicative of the results that may be expected for the entire fiscal
year.




                                       -9-
<PAGE>

RESULTS OF OPERATIONS

The securities  brokerage is highly  competitive.  In addition,  overall trading
volume,  market volatility and market prices are some of numerous factors,  over
which we can exert little or no control. These factors may cause our earnings to
fluctuate widely and affect our operations significantly.

Six and three months ended July 31, 2000  compared to six and three months ended
July 31, 1999

REVENUES

Commission revenues for the three months ended July 31, 2000 decreased by 15% to
$1,432,000 as compared to commission revenues of $1,688,000 for the three months
ended July 31, 1999.  Commission revenues for the six months ended July 31, 2000
decreased by less than 1% to $3,845,000  as compared to  commission  revenues of
$3,877,000 for the six months ended July 31, 1999. Revenues from commissions are
affected by both retail  trading  volume and the dollar amount of retail trades.
This decrease is due primarily to the decrease in trading volume.

Interest  income for the three  months  ended July 31, 2000  decreased by 50% to
$102,000 as compared to interest  income of $206,000  for the three months ended
July 31, 1999.  Interest income for the six months ended July 31, 2000 decreased
by 10% to $354,000 as compared to interest income of $396,000 for the six months
ended July 31, 1999. Our interest income decreased due primarily to the decrease
in consumer related  financing of margin debits,  which, in turn, was related to
the decreased trading volume which characterized the quarter.

Other  income for the three  months  ended July 31, 2000  increased  to $79,000,
compared to other  income of $25,000 for the three  months  ended July 31, 1999.
Other  income for the six months  ended July 31,  2000  increased  to  $128,000,
compared to other income of $57,000 for the six months ended July 31, 1999.

EXPENSES

Compensation  and  benefits  expense  for the three  months  ended July 31, 2000
increased by less than 1% to $1,038,000 as compared to compensation and benefits
expense of $1,028,000 for the three months ended July 31, 1999. Compensation and
benefits  expense  for the six months  ended July 31, 2000  increased  by 18% to
$2,710,000 as compared to  compensation  and benefits  expense of $2,300,000 for
the six  months  ended  July 31,  1999.  These  expenses  vary as because we pay
commissions  to  our  brokers  based  on a  percentage  of  commission  revenues
generated.  In addition,  we  compensated  our brokers for placing shares in our
IPO.  Additionally,  the increase in compensation  and benefit expense is due to
the  creation  of  additional  staff  positions  related  to  our  expansion  in
accordance with the execution of our business plan.

Occupancy  and  equipment  expense  for the three  months  ended  July 31,  2000
increased by 49% to $330,000 as compared to occupancy and  equipment  expense of
$221,000  for the three  months ended July 31,  1999.  Occupancy  and  equipment
expense for the six months  ended July 31, 2000  increased by 29% to $477,000 as
compared to occupancy and equipment expense of $369,000 for the six months ended
July 31, 1999. The increase was due primarily to purchases in computer equipment
related to the execution of our business plan.




                                      -10-

<PAGE>


Brokerage,  clearing and exchange  fees for the three months ended July 31, 2000
decreased  by 23% to $245,000 as compared to  brokerage,  clearing  and exchange
fees of $319,000 for the three months ended July 31, 1999.  Brokerage,  clearing
and  exchange  fees for the six months  ended July 31, 2000  decreased  by 5% to
$614,000 as compared to  brokerage,  clearing and exchange  fees of $644,000 for
the six months ended July 31, 1999.  The decrease was due primarily to decreased
trading volume.

Communications expense for the three months ended July 31, 2000 decreased by 14%
to  $180,000 as compared  to  communications  expense of $210,000  for the three
months ended July 31, 1999. Communications expense for the six months ended July
31, 2000 increased by 51% to $499,000 as compared to  communications  expense of
$330,000 for the six months ended July 31, 1999. The decrease in the three-month
periods was due  primarily  to  decreased  trading  volume.  The increase in the
six-month periods was due primarily to two factors: the first was the resolution
of certain  timing issues  associated  with the payment of vendor bills carrying
over from the six month period  ended July 31,  1999;  the second was related to
increased communications activity related to the execution of our business plan.

Business  development expense for the three months ended July 31, 2000 increased
by 1,921% to $384,000 as compared to business  development expense for the three
months ended July 31, 1999 of $19,000.  Business development expense for the six
months  ended July 31,  2000  increased  by 1,772% to  $805,000  as  compared to
business  development expense for the six months ended July 31, 1999 of $43,000.
The increase  resulted  primarily  from the  execution of our business  plan and
development, marketing and advertising of our online brokerage division, Shochet
Online!.


Other expenses for the three months ended July 31, 2000 increased to $239,000 as
compared to other expenses for the three months ended July 31, 1999 of $131,000.
Other  expenses for the six months ended July 31, 2000  increased to $508,000 as
compared to other expenses for the six months ended July 31, 1999 of $469,000.

   As a result of the above,  we reporting a net loss of $1,017,000 and $803,000
for the six and three  months  ended July 31,  2000 as compared to a net loss of
$320,000 and $310,000 for the six and three months ended July 31, 1999.

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

The average  number of common  shares and common stock  equivalents  outstanding
used in the  computation  of basic and  diluted  earnings  per common  share was
1,983,750  for the six months ended July 31, 2000 as compared to  1,200,000  for
the six months ended July 31, 1999.  This increase was  attributable to the sale
of 1,045,000 shares of common stock in our IPO in March 2000.

LIQUIDITY AND CAPITAL RESOURCES

Approximately  72% of our assets at July 31, 2000 are highly liquid,  consisting
primarily of cash and cash equivalents,  securities inventories, and receivables
from other  broker-dealers,  all of which fluctuate depending upon the levels of
customer business and trading activity.  Receivables from broker-dealers,  which
are primarily from our clearing broker, turn over rapidly.

In March  2000,  we sold  1,045,000  shares of its  common  stock to the  public
through an initial public  offering.  The stock was priced at $9 per share.  The
company  raised gross proceeds of  approximately  $9,400,000 and net proceeds of
$7,926,000.



                                      -11-

<PAGE>

During the six months ended July 31, 2000, cash used in operating activities was
$2,173,000 as compared to cash used in operating  activities of $228,000 for the
six months ended July 31, 1999. The primary reason for the increase in cash used
in operating  activities was a net loss of $1,017,000,  the $506,000 increase in
other  assets  attributable  to our  website  development,  and  the  $1,000,000
repayment of liabilities subordinated to the claims of general creditors.

Cash used in investing activities during the six months ended July 31, 2000, was
$54,000 as  compared  to  $147,000  during the six months  ended July 31,  1999.
During the six months  ended July 31,  2000,  we reduced our  spending on office
furniture, equipment and leasehold improvements.

Cash provided by financing activities during the six months ended July 31, 2000,
was $7,296,000.  We received $7,926,000 from the sale of common stock during the
six months ended July 31, 2000.

As a broker-dealer, Shochet Securities, Inc. is subject to the net capital rules
of the NASD and the SEC. Therefore, we are subject to restrictions on the use of
capital and our related liquidity. In April 1996, August 1999 and February 2000,
Firebrand   Financial  Group,   Inc.,   formerly  known  as  Research   Partners
International,  Inc.,  our  majority  stockholder,  contributed  an aggregate of
$3,000,000 of additional  regulatory  capital in the form of additional  paid in
capital and subordinated debt. $1,500,000 of this amount was repaid to Firebrand
in April 2000.  Another  $1,000,000,  derived  from the  proceeds of our IPO was
repaid in May 2000. No other proceeds from the IPO have been utilized as of July
31, 2000.

As of July  31,  2000,  an  aggregate  of  approximately  $500,000  was  owed to
Firebrand.  Shochet  Securities'  net capital  position as of July 31, 2000, was
$1,805,000  compared to net capital  requirements  of  $100,000,  $1,705,000  in
excess of its regulatory  net capital  requirements.  At July 31, 2000,  Shochet
Holding Corp. had a capital position of $8,624,000.

Our overall  capital and funding needs are  continually  reviewed to ensure that
our capital base can support the estimated  needs of our business  units.  These
reviews  take  into  account  business  needs  as  well  as  regulatory  capital
requirements. Based upon these reviews, we believe that our capital structure is
adequate for current operations and reasonably foreseeable future needs.

OTHER MATTERS

Safe Harbor Cautionary Statement

We  occasionally   make   forward-looking   statements  such  as  forecasts  and
projections  of  expected  future  performance  or  statements  of our plans and
objectives.  When used in this  quarterly  report and in future filings with the
SEC, in our press releases and in oral  statements  made with the approval of an
authorized  executive  officer,  the words or phrases "will likely result," "the
Company  expects," "we intend or expect,"  "will  continue,"  "is  anticipated,"
"estimated,"   "project,"  or  "outlook"  or  similar   expressions,   including
confirmations  by  one  of  our  authorized   executive  officers  of  any  such
expressions  made by a third party  regarding us with respect to the company are
intended  to  identify  forward-looking  statements  within  the  meaning of the
Private  Securities  Litigation  Reform Act of 1995. We caution you not to place
undue reliance on these forward-looking statements, each of which speaks only as
of  the  date  made.   These   statements  are  subject  to  certain  risks  and
uncertainties  that  could  cause  actual  results  to  differ  materially  from
historical earnings and those presently anticipated or projected.

For a more complete discussion of these and other factors,  see our registration
statement filed on Form SB-2, as amended (No. 333-92307).  We have no obligation
to  publicly  release  the  result  of any  revisions  that  may be  made to any
forward-looking  statements to reflect  anticipated or  unanticipated  events or
circumstances occurring after the date of these statements.


                                      -12-
<PAGE>



Part II - OTHER INFORMATION

Item 2.   Changes in Securities

Sales of Unregistered Securities

On April 11,  2000 and May 11,  2000,  Shochet  granted  to  certain  of its key
employees  incentive stock options to purchase an aggregate of 36,000 and 70,000
shares of its common  stock,  respectively,  at an  exercise  price of $9.00 per
share under to its 1999 Performance Equity Plan. The options vest in three equal
annual  installments  commencing on the one-year  anniversary date of the option
grant and expire on the 10-year anniversary from date of vesting.

On May 11, 2000,  Shochet  granted to certain of its directors  incentive  stock
options to  purchase an  aggregate  of 30,000  shares of its common  stock at an
exercise  price of $9.00 per share under the Plan.  The options  vest on May 11,
2001 and expire on May 11, 2006.


                                  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.



Date:  September 14, 2000         /s/ Roger N. Gladstone
                                  ----------------------
                                  Roger N. Gladstone
                                  Chairman of the Board and
                                  Chief Executive Officer



                                  /s/ David F. Greenberg
                                  ----------------------
                                  David F. Greenberg
                                  Principal Accounting Officer















                                      -13-



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