<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended: August 31, 1996
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: 0-12893
-----------------------------------------
SSI CAPITAL CORP.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 14-1623047
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Suite 311
150 Vanderbilt Motor Parkway
Hauppauge, New York 11788
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(516) 273-0059
- --------------------------------------------------------------------------------
(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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
The issuer has outstanding one class of common stock. As of the close of the
period covered by this report, there were 1,749,463 shares outstanding.
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Index to Financial Statements
Balance Sheet as at August 31, 1996 and November 30, 1995.
Statement of Stockholder's Equity for the period July 15, 1991 (inception of
development stage) through August 31, 1996.
Statement of Operations for the nine months ended August 31, 1996 and August 31,
1995 and for the period July 15, 1991 (inception of development stage) to August
31, 1996.
Statement of Operations for the three months ended August 31, 1996 and August
31, 1995.
Statement of Cash Flows for the nine months ended August 31, 1996 and August 31,
1995 and for the period July 15, 1991 (inception of development stage) to August
31, 1996.
Notes to Financial Statements
2
<PAGE> 3
SSI CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
AUGUST 31 NOVEMBER 30
1996 1995
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS
Cash $ 193,241 $ 193,799
--------- ---------
TOTAL CURRENT ASSETS 193,241 193,799
OTHER ASSETS Investments (Note 2) --------- ---------
TOTAL ASSETS $ 193,241 $ 193,799
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued expenses $ 24,478 $ 25,503
--------- ---------
TOTAL CURRENT LIABILITIES 24,478 25,503
--------- ---------
STOCKHOLDERS' EQUITY
Preferred stock $.01 par value
1,000,000 shares authorized;
none issued and outstanding
Common stock $.001 par value
100,000,000 shares authorized;
1,749,463 issued and outstanding 1,749 1,749
Additional paid in capital 182,066 182,066
Retained earnings (deficit) (15,052) (15,519)
--------- ---------
TOTAL 168,763 168,296
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 193,241 $ 193,799
========= =========
</TABLE>
3
<PAGE> 4
SSI CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Deficit
Accumulated
Capital In Prior During Total
Common Stock Excess of Retained Development Stockholders'
Shares Amount Par Value Earnings Stage Equity
------ ------ ---------- -------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Balance, July 15, 1991 7,422,243 $ 7,422 $ 75,193 $40,440 $ $123,055
(Emergence of Chapter 11)
Private Placement
July 15, 1991 8,372,318 8,373 91,627 100,000
Issuance of shares to
creditors, July 15, 1991 1,200,068 1,200 1,200
Income for the period July 15,
1991 to November 30, 1991 7,704 7,704
Loss for the year ended
November 30, 1992 (23,301) ( 23,301)
Issuance of stock re:
bankruptcy plan 500,000 500 ( 500)
Loss for the year ended
November 30, 1993 (17,017) ( 17,017)
---------- ------ ------- ------ ------ -------
Balance, November 30, 1993 17,494,629 17,495 166,320 40,440 (32,614) 191,641
Reverse split, one for ten (15,745,166) (15,746) 15,746
Loss for the year ended
November 30, 1994 (31,118) ( 31,118)
---------- ------ ------- ------ ------ -------
Balance, November 30, 1994 1,749,463 1,749 182,066 40,440 (63,732) 160,523
Income for the year ended
November 30, 1995 7,773 7,773
---------- ------ ------- ------ ------ -------
Balance, November 30, 1995 1,749,463 1,749 182,066 40,440 (55,959) 168,296
Income for the nine months ended
August 31, 1996 (unaudited) 467 467
---------- ------ ------- ------ ------ -------
Balance, August 31, 1996
(Unaudited) $ 1,749,463 $ 1,749 $ 182,066 $40,440 $(55,492) $ 168,763
========== ====== ======= ====== ====== =======
</TABLE>
4
<PAGE> 5
SSI CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
UNAUDITED
<TABLE>
<CAPTION>
For The Period
For The Nine July 15, 1991
Months Ended (Inception) To
August 31 August 31
1996 1995 1996
<S> <C> <C> <C>
REVENUE
Interest income $ 5,127 $ 5,708 $ 38,487
Other income 15,045 21,566
Insurance reimbursement 1,840
------ ------ -------
TOTAL 5,127 20,753 61,893
------ ------ -------
EXPENSES
Legal and professional 2,944 8,391 72,626
Transfer and filing fees 800 3,270 14,909
Storage 350 636 3,359
Miscellaneous 125 85 1,550
Travel 767
Interest 8,842
------ ------ -------
TOTAL 4,219 12,382 102,053
------ ------ -------
INCOME (LOSS) BEFORE INCOME TAXES 908 8,371 (40,160)
INCOME TAXES 441 421 15,332
------ ------ -------
NET LOSS $ 467 $ 7,950 $( 55,492)
====== ====== =======
LOSS PER SHARE $ NIL $ NIL $( .03)
====== ====== =======
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 1,749,463 1,749,463 1,735,924
========= ========= =========
</TABLE>
5
<PAGE> 6
SSI CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
UNAUDITED
<TABLE>
<CAPTION>
For The Three
Months Ended
August 31
1996 1995
<S> <C> <C>
REVENUE
Interest income $ 1,908 $ 2,139
Other income
TOTAL 1,908 2,139
----------- -----------
EXPENSES
Legal and professional 1,078 4,497
Transfer & filing fees 250 520
Storage 350 504
Miscellaneous 34 4
----------- -----------
TOTAL 1,712 5,525
----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES 196 (3,386)
INCOME TAXES ----------- -----------
NET INCOME (LOSS) $ 196 $ (3,386)
=========== ===========
EARNINGS (LOSS) PER SHARE:
Income (loss) per share $ NIL $ NIL
=========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 1,749,463 1,749,463
=========== ===========
</TABLE>
6
<PAGE> 7
SSI CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
UNAUDITED
<TABLE>
<CAPTION>
For The Period
For The Nine July 15, 1991
Months Ended (Inception) To
August 31 August 31
1996 1995 1996
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income (loss) $ 467 $ 7,950 $( 55,492)
Changes in operating assets
and liabilities:
Increase (decrease) in:
Accrued expenses ( 1.025) ( 980) 17,842
Accounts payable ( 95,419)
(Increase) decrease in:
Accounts receivable 50,379
Due from Norstar Bank 50,000
--------- -------- ---------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES ( 558) 6,970 ( 32,690)
BEGINNING CASH BALANCE 193,799 187,226 225,931
------- ------- -------
ENDING CASH BALANCE $ 193,241 $ 194,196 $ 193,241
======= ======= =======
Supplemental Cash Flows Information
Taxes paid $ 441 $ 421
======= =======
</TABLE>
7
<PAGE> 8
SSI CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
AUGUST 31, 1996
UNAUDITED
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL
The Company filed an amended Certificate of Incorporation on June 16, 1995
whereby they changed the name of the corporation from Saratoga Standardbreds,
Inc. to SSI Capital Corp. In addition, the issued and outstanding common shares
were reverse split on a one for ten basis. All information in these financial
statements have been adjusted to reflect this amendment.
The Company was incorporated in the State of New York on January 30, 1981. On
December 5, 1988, the Company filed a Voluntary Petition for Reorganization
under Chapter 11 of the Bankruptcy Code. At the time of the filing of its
petition, the Debtor was engaged in the business of serving the Standardbred
horse industry. The Plan of Reorganization was confirmed by the United States
Bankruptcy Court, Northern District of New York on October 9, 1990. Although the
Plan of Reorganization was confirmed on October 9, 1990 by the Bankruptcy Court,
the Company has deemed the plan consummated on July 14, 1991 with the conveyance
of its primary asset of real estate to Norstar Bank on such date pursuant to the
plan. As a condition to the confirmation of the Plan, the Company effected a
concurrent private placement of 8,372,318 common shares, $.001 par value, for
gross proceeds of $100,000 which are not subject to any claims of creditors
under the plan.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates and assumptions.
BUSINESS ACTIVITY
The Company is presently engaged in seeking out a suitable business for
acquisition or merger. The Company has no formal business plan or any particular
area of business which it intends to engage. The Company will attempt to acquire
a business which it believes has potential for successful development.
The financial data for the nine and three months ended August 31, 1996 and 1995,
and the period July 15, 1991 (commencement of development stage) through August
31, 1996 is unaudited, but includes all adjustments (consisting only of normal
recurring adjustments) which are, in the opinion of the management, necessary
for a fair presentation of the results of operations for such periods.
8
<PAGE> 9
SSI CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
AUGUST 31, 1996
UNAUDITED
RELATED PARTY TRANSACTIONS
The Company maintains its business office at the office of its President, 150
Vanderbilt Motor Parkway, Suite 311, Hauppauge, NY 11788. The Company is using
these offices on a rent free basis until such time as it is required to find its
own space. The Company has the benefit of a receptionist and clerical help
without cost to it until management finds it necessary to move into separate
space.
Edmond O'Donnell was elected President of the Company in October, 1990. He has
been a director since January, 1981. Mr. O'Donnell is a self employed management
consultant and is also a private investor. As of July 15, 1991, he was an
officer, director and principal shareholder of Gro-Vest, Inc., a management
consulting firm, and was also a registered principal and an officer, director
and principal shareholder of G-V Capital Corp., a member of the National
Association of Securities Dealers. His relationship with G-V Capital Corp.
terminated as of December 31, 1992.
Lawrence Kaplan was elected Secretary and Treasurer of the Company in October,
1990. He has been a director since July, 1981. Mr. Kaplan is an officer,
director and principal shareholder of Gro- Vest, Inc. He is also a registered
representative and an officer, director and principal shareholder of G-V Capital
Corp. Mr. Kaplan is a director of American United Global, Inc., a distributor of
JI Case construction equipment in the Pacific Northwest and a manufacturer of
specialty and commodity O- rings. He is also an officer and director of The
Park Group, Ltd. and Andover Equities Corp., companies engaged in seeking
business opportunities.
Management of the Company will devote only such time as they deem necessary to
the activities of the Company.
Edmond O'Donnell is primarily responsible for the financial and recordkeeping
affairs of the Company and is responsible for evaluating acquisitions for the
Company. Both he and Lawrence Kaplan are devoting a portion of their time to
looking for and investigating prospects for the Company.
Of the 8,172,318 common shares issued on July 15, 1991 in the private placement,
fifty percent (50%) were purchased by Edmond O'Donnell and Lawrence Kaplan.
9
<PAGE> 10
SSI CAPITAL CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
AUGUST 31, 1996
UNAUDITED
NOTE 2: INVESTMENTS
The Company, since prior to the filing of its petition, was the General Partner
of Niavest, L.P., a limited partnership engaged in the breeding of Standardbred
Horses. The Company was also the owner of 307 Units of Limited Partnership
interests in Niavest. Under the Plan, the Units were transferred to Norstar
Bank, the Company's secured lender. The Company remained as the General Partner
of Niavest and, as such, could be contingently liable for the debts of the
Limited Partnership. There is no known claim with respect to any such liability.
Following the close of the Company's fiscal year ending November 30, 1995,
Niavest was terminated and all of its assets were distributed to the limited
partners. Thereafter, Niavest was formally dissolved with the filing of a
Certificate of Dissolution.
NOTE 3: COMMON STOCK
As authorized in the Plan of Reorganization, the certificate of incorporation
was amended to change the authorized common shares from 8,500,000 shares to
100,000,000 shares. The par value of the common shares was changed from $.01 to
$.001. The par value of the preferred stock was changed from $.10 to $.01.
Pursuant to the plan, the Company issued 1,000,043 new common shares to the
general unsecured creditors and 200,025 new common shares to the subordinated
creditors effective July 15, 1991. At the same time the private placement of
8,172,318 new common shares were issued for proceeds of $100,000. On December 4,
1993 the Company issued 500,000 shares to Norstar Bank to be held for investment
purposes only, pursuant to an agreement entered into as part of the bankruptcy
proceedings. On June 16, 1995 the Company filed an amended Certificate of
Incorporation whereby the issued and outstanding common shares were reverse
split on a one for ten basis. The information in these financial statements has
been adjusted to reflect this amendment.
10
<PAGE> 11
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
The Company is deemed to be a development stage company since July 15,
1991, the date of the consummation of its Plan of Reorganization. The Company's
former business has been terminated completely and its ongoing activities are
expected to consist of finding a suitable business for acquisition or merger.
Results of Operations
During the three months ended August 31, 1996, the Company's revenue
amounted to $1,908. Its expenses, consisting primarily of legal and professional
fees, amounted to $1,712. As a result, the Company sustained a net gain during
such period of $196.
Liquidity and Capital Resources
As of August 31, 1996, the Company had working capital of $168,763. The
significant amount of capital necessary to acquire and develop a successful
business in today's economy will limit the Company's ability to locate one
suitable for acquisition or merger. Given the limited amount of working capital,
the potential venture is likely to involve the acquisition of, or merger with a
company which is not seeking immediate substantial amounts of cash but one which
desires to establish a public trading market for its shares. The Company is
currently negotiating with a possible merger candidate, but the final terms of
such a transaction have not been established as of the date of filing this
report. There can be no assurance that the Company will consummate a transaction
with this or any other merger or acquisition candidate. It is possible that the
Company will require additional financing to expand and fund any business which
it acquires or establishes. If additional funds are required, there can be no
assurance given that additional financing will be available on commercially
reasonable terms or otherwise.
11
<PAGE> 12
PART II - OTHER INFORMATION
None
12
<PAGE> 13
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.
SSI CAPITAL CORP.
Dated: October 4, 1996 By: /s/Edmond O'Donnell
---------------------------
Edmond O'Donnell, President
By: /s/Lawrence Kaplan
---------------------------
Lawrence Kaplan, Treasurer
13
<PAGE> 14
Exhibit Index
27.1 Financial Data Schedule
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SSI CAPITAL
CORP. FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED AUGUST 31, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-01-1996
<PERIOD-START> DEC-01-1995
<PERIOD-END> AUG-31-1996
<CASH> 193,241
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 193,241
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 193,241
<CURRENT-LIABILITIES> 24,478
<BONDS> 0
0
0
<COMMON> 1,749
<OTHER-SE> 167,014
<TOTAL-LIABILITY-AND-EQUITY> 193,241
<SALES> 0
<TOTAL-REVENUES> 5,127
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4,219
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 908
<INCOME-TAX> 441
<INCOME-CONTINUING> 467
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 467
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
