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 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
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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>
SHOCHET HOLDING CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
July 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
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>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
SHOCHET HOLDING CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended July 31, Ended July 31,
----------------------------- -----------------------------
2000 1999 2000 1999
----------------------------- -----------------------------
REVENUES:
<S> <C> <C> <C> <C>
Commissions $ 1,432,000 $ 1,688,000 $ 3,845,000 $ 3,877,000
Investment banking (344,000) -- 269,000 --
Interest 102,000 206,000 354,000 396,000
Other 79,000 25,000 128,000 57,000
----------- ----------- ----------- -----------
Total revenues 1,269,000 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 (1,147,000) (9,000) (1,017,000) 175,000
Income tax provision -- (89,000) -- (89,000)
----------- ----------- ----------- -----------
Income (loss) from continuing operations (1,147,000) (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) $(1,147,000) $ (310,000) $(1,017,000) $ (320,000)
=========== =========== =========== ===========
BASIC AND DILUTED:
Net income (loss) from continuing operation $ (0.51) $ (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 $ (0.51) $ (0.26) $ (0.51) $ (0.27)
=========== =========== =========== ===========
Weighted average common shares outstanding 2,245,000 1,200,000 1,983,750 1,200,000
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
SHOCHET HOLDING CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For the Six Months Ended July 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
ADDITIONAL TOTAL
COMMON STOCK PAID-IN ACCUMULATED STOCKHOLDERS'
Shares Amount CAPITAL DEFICIT EQUITY
------ ------ ------- ------- ------
<S> <C> <C> <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>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
SHOCHET HOLDING CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
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>
The accompanying notes are an integral part of these consolidated financial
statements.
6
<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"):
Six months ended July 31,
---------------------------
2000 1999
----------- -----------
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)
=========== ===========
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 $1,147,000
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
