UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended October 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 December 1, 2000
Common Stock, $0.0001 par value 2,245,000 shares
<PAGE>
SHOCHET HOLDING CORP.
FORM 10-QSB
For the quarterly period ended October 31, 2000
Index
Part I - Financial Information Page
Item 1. Consolidated Financial Statements
Statement of Operations 3
Balance Sheet 4
Statement of Changes in Stockholders' Equity 5
Statement of Cash Flows 6
Notes 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Part II - Other Information
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission 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 13
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.
2
<PAGE>
<TABLE>
<CAPTION>
SHOCHET HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
For the Three Months For the Nine Months
Ended October 31, Ended October 31,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
REVENUES:
Commissions $ 1,098,000 $ 1,465,000 $ 4,943,000 $ 5,342,000
Investment banking - - 269,000 -
Interest 440,000 205,000 794,000 601,000
Other 265,000 2,000 393,000 59,000
Total Revenues 1,803,000 1,672,000 6,399,000 6,002,000
OPERATING EXPENSES:
Compensation and benefits 1,304,000 978,000 4,214,000 3,278,000
Occupancy and equipment 491,000 196,000 968,000 565,000
Brokerage, clearing and exchange fees 238,000 243,000 852,000 887,000
Communications 161,000 145,000 660,000 475,000
Business development 281,000 26,000 671,000 69,000
Other expenses 58,000 408,000 781,000 877,000
Total Operating Expenses 2,533,000 1,996,000 8,146,000 6,151,000
Income (loss) before income taxes (730,000) (324,000) (1,747,000) (149,000)
Income tax provision 89,000
Income (loss) from continuing operations (730,000) (235,000) (1,747,000) (149,000)
Discontinued operations:
Loss from operations of the discontinued
on-site day trading segment, net of income tax
benefit (89,000) (495,000)
Net income (loss) $ (730,000) $ (324,000) $ (1,747,000) $ (644,000)
BASIC AND DILUTED:
Net income (loss) from continuing operation (0.33) (0.20) (0.84) (0.13)
Net income (loss) from discontinued operations 0.00 (0.07) 0.00 (0.41)
Net income (loss) per common share (0.33) (0.27) (0.84) (0.55)
Weighted average common shares outstanding 2,245,000 1,200,000 2,071,000 1,200,000
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE>
<TABLE>
<CAPTION>
SHOCHET HOLDING CORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
October 31, 2000
(Unaudited)
ASSETS:
<S> <C>
Cash & cash equivalent $ 1,360,000
Securities owned at market value 170,000
Securities purchased with agreement to resell 3,523,000
Receivable from broker dealers 1,365,000
Office furniture equipment and leasehold improvements, net 884,000
Goodwill, net 1,480,000
Prepaid expense 208,000
Income taxes receivable 138,000
Other assets 523,000
----------------
Total Assets $ 9,651,000
================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Securities sold, not yet purchased, at market value $ 12,000
Commissions payable 193,000
Payable to related parties 626,000
Accrued expenses and other liabilities 423,000
Liabilities subordinated to the claims of general creditors 500,000
----------------
Total liabilities $ 1,754,000
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 (2,299,000)
Total stockholders' equity 7,897,000
----------------
Total liabilities and stockholders' equity $ 9,651,000
================
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE>
<TABLE>
<CAPTION>
SHOCHET HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Nine Months Ended October 31, 2000 (Unaudited)
COMMON STOCK
ADDITIONAL TOTAL
PAID-IN ACCUMULATED STOCKHOLDERS'
Shares Amount CAPITAL DEFICIT EQUITY
------------------------------------- ------------ -------------
<S> <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 - - (1,747,000) (1,747,000)
------------------------------------- ------------ -------------
Balance at October 31, 2000 2,245,000 $ - $ 10,196,000 $(2,299,000) $ 7,897,000
===================================== ============= =============
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE>
<TABLE>
<CAPTION>
SHOCHET HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
For the Nine Months Ended October 31,
-------------------------------------
2000 1999
------------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,747,000) $ (644,000)
Adjustments to reconcile net loss to net cash flows
used in operating activities:
Depreciation and Amortization 241,000 193,000
(Increase) decrease operating assets:
Securities owned at market value 20,000 (164,000)
Securities purchased with agreement to resell (3,523,000) -
Receivable from broker dealers (958,000) 119,000
Prepaid expenses (208,000) -
Receivable from related party 518,000 -
Income taxes receivable 86,000 91,000
Deferred IPO costs, net 301,000 -
Other assets (523,000) (77,000)
Increase (decrease) in operating liabilities:
Securities sold , not yet purchased, at market value (27,000) 4,000
Commissions payable (47,000) (103,000)
Payable to related parties (47,000) (14,000)
Accrued expenses and other liabilities 18,000 205,000
Liabilities subordinated to the claims of general creditors (1,000,000) -
----------- -
Net cash used in operating activities (6,896,000) (390,000)
----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of office furniture, equipment and leasehold improvements (244,000) (165,000)
--------- ---------
Net cash used in investing activities (244,000) (165,000)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of subordinated loan - 500,000
Proceeds from sale of common stock 7,926,000 -
---------- -
Net cash provided by financing activities 7,926,000 500,000
---------- --------
Net increase (decrease) in cash and cash equivalents 786,000 (55,000)
Cash and cash equivalents - beginning of year 574,000 868,000
-------- --------
Cash and cash equivalents - end of period $ 1,360,000 $ 813,000
============ ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest $ 61,000 $ 100,000
============ ===========
Income Taxes $ - $ -
============ ===========
See accompanying notes to consolidated financial statements
</TABLE>
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<PAGE>
SHOCHET HOLDING CORP. AND SUBSIDIARIES
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 securities brokerage and related financial services through six
branch offices, all of which are in South Florida. Shochet also provides online
brokerage services through Shochet Online, its online brokerage division,
through its website located at www.shochet.com.
Shochet's strategy is to continue the development of its presence as a
Florida-based provider of full service discount securities brokerage and related
financial services. Shochet's goal is to attract and retain client assets by
focusing on retail brokerage, financial planning and other services. Shochet
intends to expand its business through:
o advertising and promotion;
o recruitment of finance professionals;
o adding new products and services;
o opening new offices; and
o acquisition.
Shochet Financial Services Group, a division of Shochet introduced in June 2000,
has commenced offering a range of non-proprietary financial services and
products, including financial planning services, insurance products and
annuities. In the first quarter of the next fiscal year, Shochet intends to
offer investment adviser services such as fee-based, managed money "wrap"
accounts through its newly formed subsidiary, Shochet Investment Adviser Corp. A
client of this subsidiary will be able to choose initially from a range of
mutual funds, then portfolios managed by unaffiliated third-party portfolio
managers. The client will pay a fee based on a percentage of assets held in the
client's account, in lieu of standard commissions associated with purchases of
securities in traditional brokerage accounts.
In November 2000, Shochet announced the signing of National Football League Hall
of Fame member and former Miami Dolphins coach Don Shula. Coach Shula will
appear as spokesperson for Shochet's "Your Financial Coach" advertising
campaign, slated to commence in January 2001 on South Florida radio, cable
television and in newspapers and periodicals. Coach Shula will also make
personal appearances on behalf of Shochet.
In addition, Shochet recently formed Shochet Private Client Group, a division
that will offer premium client services, such as complimentary tax preparation,
to an affluent clientele. Shochet's flagship Private Client Group office is
scheduled to open in January 2001 in Boca Raton, Florida.
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, estimated to be launched in January 2001. The portal will be
promoted by means of a variety of traditional and nontraditional, "guerilla"
marketing techniques, all of which are designed to generate leads for our
financial professionals and promote Shochet. As of October 31, 2000, Shochet
Online had 907 users registered to access to their brokerage accounts, compared
to 330 at January 31, 2000.
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 ("SEC"). 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.
7
<PAGE>
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 nine months ended
October 31, 2000 are not necessarily indicative of the results that may be
expected for the entire fiscal year.
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 October 31, 2000,
Shochet Securities had net capital of $1,399,000, 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>
Nine months ended October 31,
-------------------------------------------
2000 1999
--------------- ----------------
<S> <C> <C>
Numerator for basic and diluted EPS:
Net income/(loss) from continuing operations $ (1,747,000) $ (149,000)
Loss from discontinued operations: - (495,000)
--------------- ----------------
Net loss $ (1,747,000) $ (644,000)
=============== =================
Denominator for basic EPS:
Weighted-average common shares
outstanding - basic and diluted 2,071,000 1,200,000
=============== =================
Basic and diluted EPS from continuing operations $ (0.84) $ ( 0.12)
Basic and diluted EPS from discontinued
operations - (0.41)
--------------- -----------------
Basic and diluted EPS: $ (0.84) $ (0.53)
=============== =================
</TABLE>
4. STOCKHOLDERS' EQUITY
In its March 15, 2000, initial public offering, Shochet Holding Corp. sold
1,045,000 shares of its common stock. The stock was priced at $9 per share,
raising gross and net proceeds of $9,405,000 and $7,926,000, respectively.
On October 25, 2000, Shochet Holding Corp. announced that its board of directors
had authorized a stock repurchase plan for up to approximately $500,000 of its
common stock. As of October 31, 2000, no shares of stock had been repurchased.
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.
8
<PAGE>
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, providing full service, discount brokerage and
related financial services, is subject to general economic and market conditions
and the volatility of trading markets. Industry-wide trading volume for the
quarter ended October 31, 2000 was below average compared to the previous
quarter.
The results of operations for the nine months ended October 31, 2000 are not
necessarily indicative of the results that may be expected for the entire fiscal
year.
RESULTS OF OPERATIONS
The securities brokerage industry is highly competitive and subject to external
factors such as overall trading volume, market volatility and market prices,
over which we can exert little or no control. These factors may cause our
earnings to fluctuate widely and affect our operations significantly.
Nine and three months ended October 31, 2000 compared to nine and three months
ended October 31, 1999
9
<PAGE>
REVENUES
Commission revenues for the three months ended October 31, 2000 decreased by 25%
to $1,098,000 as compared to commission revenues of $1,465,000 for the three
months ended October 31, 1999. Commission revenues for the nine months ended
October 31, 2000 decreased by 7.5% to $4,943,000 as compared to commission
revenues of $5,342,000 for the nine months ended October 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 a decrease in trading volume.
Interest income for the three months ended October 31, 2000 increased by 115% to
$440,000 as compared to interest income of $205,000 for the three months ended
October 31, 1999. Interest income for the nine months ended October 31, 2000
increased by 32% to $794,000 as compared to interest income of $601,000 for the
nine months ended October 31, 1999. In both cases, this increase is primarily
due to the investment of IPO proceeds in interest producing securities.
Other income for the three months ended October 31, 2000 increased to $265,000,
compared to other income of $2,000 for the three months ended October 31, 1999.
Other income for the nine months ended October 31, 2000 increased to $393,000,
compared to other income of $59,000 for the nine months ended October 31, 1999.
The increase is primarily related to the increase in proprietary trading and
order flow income.
EXPENSES
Compensation and benefits expense for the three months ended October 31, 2000
increased by 33% to $1,304,000 as compared to compensation and benefits expense
of $978,000 for the three months ended October 31, 1999. Compensation and
benefits expense for the nine months ended October 31, 2000 increased by 29% to
$4,214,000 as compared to compensation and benefits expense of $3,278,000 for
the nine months ended October 31, 1999. These expenses vary 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 sales and staff positions related to our expansion in
accordance with the execution of our business plan.
Occupancy and equipment expense for the three months ended October 31, 2000
increased by 151% to $491,000 as compared to occupancy and equipment expense of
$196,000 for the three months ended October 31, 1999. Occupancy and equipment
expense for the nine months ended October 31, 2000 increased by 71% to $968,000
as compared to occupancy and equipment expense of $565,000 for the nine months
ended October 31, 1999. The increase was due to equipment upgrades and purchases
in accordance with the execution of our business plan.
Brokerage, clearing and exchange fees for the three months ended October 31,
2000 decreased by 2% to $238,000 as compared to brokerage, clearing and exchange
fees of $243,000 for the three months ended October 31, 1999. Brokerage,
clearing and exchange fees for the nine months ended October 31, 2000 decreased
by 4% to $852,000 as compared to brokerage, clearing and exchange fees of
$887,000 for the nine months ended October 31, 1999. The decrease was due
primarily to decreased trading volume.
Communications expense for the three months ended October 31, 2000 increased by
11% to $161,000 as compared to communications expense of $145,000 for the three
months ended October 31, 1999. Communications expense for the nine months ended
October 31, 2000 increased by 39% to $660,000 as compared to communications
expense of $475,000 for the nine months ended October 31, 1999. The increase in
the three and nine-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 in accordance with the
execution of our business plan.
Business development expense for the three months ended October 31, 2000
increased by 981% to $281,000 as compared to business development expense for
the three months ended October 31, 1999 of $26,000. Business development expense
for the nine months ended October 31, 2000 increased by 872% to $671,000 as
compared to business development expense for the nine months ended October 31,
1999 of $69,000. The increase resulted primarily from the execution of our
business plan and development, marketing and advertising of Shochet Online.
Additionally, as previously noted, Shochet retained as its spokesperson Don
Shula, National Football League Hall of Fame member and former coach of the
Miami Dolphins. Accordingly, Shochet plans to incur significant promotional
expenses are in the coming fiscal year.
10
<PAGE>
Other expenses for the three months ended October 31, 2000 decreased to $58,000
as compared to other expenses for the three months ended October 31, 1999 of
$408,000. Other expenses for the nine months ended October 31, 2000 decreased to
$781,000 as compared to other expenses for the nine months ended October 31,
1999 of $877,000.
As a result of the above, we reported a net loss of $1,747,000 and $730,000 for
the nine and three-month periods ended October 31, 2000, respectively, as
compared to a net loss of $644,000 and $324,000 for the nine and three months
ended October 31, 1999, respectively.
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
2,071,000 for the nine months ended October 31, 2000 as compared to 1,200,000
for the nine months ended October 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 71% of our assets at October 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, Shochet 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.
During the nine months ended October 31, 2000, cash used in operating activities
was $6,896,000 as compared to cash used in operating activities of $390,000 for
the nine months ended October 31, 1999. The primary reason for the increase in
cash used in operating activities was a net loss of $1,747,000, the $523,000
increase in other assets attributable to our website development, and the
$1,000,000 repayment of liabilities subordinated to the claims of general
creditors. Additionally, Shochet entered into a repurchase agreement which at
October 31,2000 amounted to $3,523,000.
Cash used in investing activities during the nine months ended October 31, 2000,
was $244,000 as compared to $165,000 during the nine months ended October 31,
1999.
Cash provided by financing activities from the sale of common stock during the
nine months ended October 31, 2000, was $7,926,000.
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
October 31, 2000.
As of October 31, 2000, an aggregate of approximately $500,000 was owed to
Firebrand. Shochet Securities' regulatory net capital position as of October 31,
2000, was $1,399,000 compared to net capital requirements of $100,000,
$1,299,000 in excess of its regulatory net capital requirements. At October 31,
2000, Shochet Holding Corp. had a capital position of $7,897,000.
11
<PAGE>
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
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
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.
Item 2. Changes in Securities
None.
Item 3. Defaults on 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
27.1 Financial Data Schedule (electronic only).
12
<PAGE>
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: December 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
