FORM 10-QSB
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 March 31, 1999
[ ] 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: 0-18344
SOONER HOLDINGS, INC.
(Exact name of small business issuer as specified in its charter)
Oklahoma 73-1275261
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
2680 W. I-40, Oklahoma City, OK 73108
(Address of principal executive offices)
Issuer's telephone number, including area code:
(405) 236-8332
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 [ ] NO [X]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court.
YES [ ] NO [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 8,471,350 shares of common
stock as of March 31, 2000.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
SOONER HOLDINGS, INC.
Consolidated Balance Sheet
(unaudited)
March 31,
1999
-----------
ASSETS
Current assets:
Cash and cash equivalents ................................... $ 66,051
Accounts receivable ......................................... 179,930
Other current assets ........................................ 16,077
-----------
Total current assets ...................................... 262,058
Property and equipment, net .................................... 2,928,190
Intangible assets, net of amortization of $162,297 ............. 1,590,497
Other assets, net .............................................. 254,565
-----------
$ 5,035,310
===========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts payable ............................................ $ 86,433
Accrued liabilities to related parties ...................... 194,892
Accrued liabilities ......................................... 161,002
Current portion of notes payable and royalty payable ........ 54,480
Deferred revenue ............................................ 33,882
-----------
Total current liabilities ................................. 530,689
-----------
Notes payable, less current portion and net of
discount of $392,854 ......................................... 4,684,823
Royalty payable, less current portion and net of
discount of $871,300 ......................................... 431,744
Commitments and contingencies .................................. --
Shareholders' deficit:
Preferred stock; undesignated, 10,000,000 shares
authorized, no shares issued and outstanding ................ --
Common stock; $.001 par value, 100,000,000 shares
authorized, 8,471,350 shares issued and outstanding ......... 8,471
Additional paid-in-capital ..................................... 5,532,907
Accumulated deficit ............................................ (6,153,324)
-----------
Total shareholders' deficit ............................... (611,946)
-----------
$ 5,035,310
===========
The accompanying notes are an integral part of this consolidated balance sheet.
SOONER HOLDINGS, INC.
Consolidated Statements of Operations
(unaudited)
For the three months ended
March 31,
1999 1998
----------- -----------
Revenues:
Rental revenues ............................. $ 77,781 $ 71,815
Service revenues ............................ 389,337 --
----------- -----------
Total revenues ............................ 467,118 71,815
----------- -----------
Operating Expenses:
General and administrative .................. 290,966 29,832
Depreciation and amortization ............... 70,956 15,513
----------- -----------
Total operating expenses .................. 361,922 45,345
----------- -----------
Income from operations ......................... 105,196 26,470
Interest expense ............................... (141,914) (55,344)
Other income ................................... 940 1,210
----------- -----------
Net loss from continuing operations ............ (35,778) (27,664)
Loss from discontinued operations .............. (17,301) --
----------- -----------
Net loss ....................................... $ (53,079) $ (27,664)
=========== ===========
Earnings per share:
Net loss from continuing operations ......... $ -- $ --
Loss from discontinued operations ........... -- --
----------- -----------
Net income (loss) per common share ............ $ -- $ --
=========== ===========
Weighted average common shares outstanding ..... 8,471,350 7,471,350
=========== ===========
The accompanying notes are an integral part of these
consolidated financial statements.
SOONER HOLDINGS, INC.
Consolidated Statements of Cash Flows
(unaudited)
For the three months ended
March 31,
1999 1998
--------- ---------
Cash flows from operating activities:
Net loss .......................................... $ (53,079) $ (27,664)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Net assets of discontinued business ......... 17,301 --
Amortization of discount .................... 49,642 --
Depreciation and amortization ............... 70,956 15,513
Changes in assets and liabilities:
Accounts receivable ........................ (42,913) (114)
Other current assets ....................... 20,461 (145)
Accounts payable ........................... (52,271) (8,350)
Accrued liabilities to related parties ..... 12,168 17,425
Accrued liabilities ........................ (20,537) (1,098)
Deferred revenue ........................... -- (1,583)
--------- ---------
Net cash provided by (used in)
operating activities ...................... 1,728 (6,016)
--------- ---------
Cash flows from investing activities:
Purchases of property and equipment ............... (138,406) (48,648)
--------- ---------
Net cash used in investing activities ....... (138,406) (48,648)
--------- ---------
Cash flows from financing activities:
Repayments of notes payable ....................... (66,713) (4,284)
Borrowings on notes payable ....................... 210,650 76,313
Borrowings on notes payable to related parties .... -- 6,338
Royalty payments .................................. (18,000) --
--------- ---------
Net cash provided by financing activities ... 125,937 78,367
--------- ---------
Net increase in cash ................................. (10,741) 23,703
Cash at beginning of year ............................ 76,792 4,482
--------- ---------
Cash at end of period ................................ $ 66,051 $ 28,185
========= =========
Supplemental disclosure of cash flow information:
Cash paid during the period for interest .......... $ 51,714 $ 43,796
========= =========
The accompanying notes are an integral part of
these consolidated financial statements.
SOONER HOLDINGS, INC.
Notes to Consolidated Financial Statements
(Unaudited)
March 31, 1999
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization and operations
- ---------------------------
Sooner Holdings, Inc., an Oklahoma corporation (the "Company"), operates
primarily through two of its subsidiaries. New Directions Acquisition Corp.
(NDAC) owns and operates a minimum security correctional facility in Oklahoma
City, Oklahoma and Charlie O Business Park Incorporated (Business Park) is
engaged in the ownership and rental of a business park in Oklahoma City,
Oklahoma. The Company also owns 100% of SD Properties, Inc. (SDPI) which acts as
a marketing representative for construction contractors to develop business
opportunities for those contractors for a fee. Effective January 15, 1999, the
Company spun-off Charlie O Beverages, Inc. (Beverages), the subsidiary which
operated the original in-home soda fountain business.
Basis of presentation
- ---------------------
The unaudited consolidated financial statements presented herein have been
prepared by the Company, without audit, pursuant to the rules and regulations
for interim financial information and the instructions to Form 10-QSB and
Regulation S-B. Accordingly, certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principals have been omitted. These unaudited consolidated
financial statements should be read in conjunction with the financial statements
and notes thereto included in the Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1998 (the "1998 Form 10-KSB"). In the opinion of
management, the unaudited consolidated financial statements reflect all
adjustments (consisting of normal recurring accruals only) which are necessary
to present fairly the consolidated financial position, results of operations,
and changes in cash flow of the Company. Operating results for interim periods
are not necessarily indicative of the results which may be expected for the
entire year.
Management plans
- ----------------
For the fiscal year ending December 31, 1998, the independent auditor's
report included an explanatory paragraph calling attention to a going concern
issue. The accompanying consolidated financial statements have been prepared
contemplating continuation of the Company as a going concern. The Company has
suffered recurring losses from operations, has a shareholders' deficit of
$611,946 and has a working capital deficiency of $268,631 at March 31, 1999. In
view of these matters, realization of a major portion of the Company's assets is
dependent upon the Company's ability to meet its financing requirements and the
success of its future operations. Management believes that its plans to revise
the Company's operating and financial requirements, as described more fully in
the 1998 Form 10-KSB, provide the Company the opportunity to continue as a going
concern. However, there can be no assurance that these plans will be successful.
Principles of consolidation
- ---------------------------
The accompanying consolidated financial statements have been prepared on
the basis of generally accepted accounting principles and include the accounts
of Sooner Holdings, Inc. and all majority owned subsidiaries. All significant
intercompany transactions have been eliminated.
Reclassifications
- -----------------
Certain reclassifications have been made to the 1998 financial statements
to conform to the 1999 presentation.
NOTE 2 - PROPERTY AND EQUIPMENT
Property and equipment as of March 31, 1999 is comprised of the following:
Land ..................................................... 1,311,400
Buildings and improvements ............................... 2,032,719
Machinery and equipment .................................. 48,865
Vehicles ................................................. 42,531
----------
3,435,515
Less accumulated depreciation ............................ 507,325
----------
Property and equipment, net .............................. $2,928,190
==========
NOTE 3 - OTHER ASSETS
Other assets at March 31, 1999 is comprised of the following:
Loan commitment fee, less amortization of $1,875 ............... $ 27,565
Certificates of deposit ........................................ 227,000
--------
Other assets, net .............................................. $254,565
========
NOTE 4 - NOTES PAYABLE
Notes payable as of March 31, 1999 consists of the following:
Installment note payable to bank, interest at prime plus 3%
per annum, due September 20, 2000, personally guaranteed
by a shareholder, officer and director. Secured by real
estate. Paid off during 1999 as part of debt refinancing. $ 922,556
Oklahoma Industrial Finance Authority (OIFA) loan, variable
interest and payments, maturing August 1, 2004, interest
at 3% over the Oklahoma Industrial Finance Authority's
cost of capital, not to fall below 10% or exceed 14%,
guaranteed by a shareholder, officer and director. Secured
by real estate and equipment. Paid off during 1999 as part
of debt refinancing. 385,910
Notes payable to related parties, interest ranging from 10%
to 15% per annum, due January 1, 2000. 1,103,273
Installment note payable to bank, interest at prime plus 3%
per annum, due May 20, 1999, guaranteed by a shareholder,
officer and director. Secured by real estate. Paid off
during 1999 as part of debt refinancing. 474,993
Note payable to individuals, no stated interest rate, due on
demand. Secured by real estate. Paid off during 1999 as
part of debt refinancing. 139,090
Note payable to bank, payments of interest only due monthly,
interest at prime pus .5%, due September 1, 1999,
guaranteed by a shareholder, officer and director. Paid
off during 1999 as part of debt refinancing. 98,800
Note payable to bank, payments of interest only due
quarterly, interest at prime, due September 1, 1999,
guaranteed by a shareholder, officer and director. Paid
off during 1999 as part of debt refinancing. 40,233
Note payable to bank, payable in monthly installments of
$500, interest at prime plus 1%, due June 24, 1999,
secured by inventory. Paid off during 1999 as part of debt
refinancing. 5,955
Balloon promissory note payable to related party (see Note
8), 10% stated interest per annum, 15% effective interest
rate, principal and interest due June 1, 2001;
collateralized by a second mortgage on land and facility
owned by the Company, net of discount of $392,854. 938,146
Note payable to bank, interest at New York prime plus 2%,
due April 20, 2000, collateralized by a first mortgage on
land and facility owned by the Company. 575,867
Other notes payable to banks, interest rates ranging from
9.5% to 9.75%, principal and interest due January 1999,
collateralized by vehicles. 49,525
-----------
4,734,348
Less current portion 49,525
-----------
Notes payable $ 4,684,823
===========
In June 1999, the Company refinanced several of the above notes payable
that were due to mature. A single note payable to a bank bearing an 8.8%
interest rate and maturing in June 2009 replaced these notes. Accordingly, these
amounts have been classified as noncurrent.
NOTE 5 - ROYALTY PAYABLE
As part of a business acquisition (see Note 8), the Company assumed a
royalty payable to an individual. The agreement calls for monthly payments of
the greater of $6,000 or 6% of the total gross monthly income of NDAC. The
agreement expires on April 30, 2017. Future minimum payments under this
agreement total $1,362,000. A discount of $871,300 was imputed by management at
March 31, 1999 using a 15% interest rate.
NOTE 6 - RELATED PARTIES
The Company's related parties are more fully described in the 1998 Form
10-KSB. The following table reflects amounts owed to related parties at March
31, 1999:
Notes Accrued
Payable Liabilities
---------- ----------
President and Chairman ....................... $ 715,320 $ 51,479
Aztor and affiliates ......................... 362,953 63,418
CRI .......................................... 25,000 624
NDLLC ........................................ 938,146 79,371
---------- ----------
Total related party liabilities .............. $2,041,419 $ 194,892
========== ==========
In addition, the president and chairman has personally guaranteed
$1,922,492 of the Company's notes payable.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
In February 1998, a lawsuit was filed by Talbot against the Company related
to the purchase of NDLLC. On January 18, 2000, a settlement was reached. The
terms of the settlement include a payment of $76,000 by NDAC. This amount is
included in accrued liabilities at March 31, 1999.
The Company is involved in certain other administrative proceedings arising
in the normal course of business. In the opinion of management, such matters,
including the lawsuit described above, will be resolved without material effect
on the Company's results of operations or financial condition.
NOTE 8 - ACQUISITION
Effective June 1, 1998, The Company completed the acquisition of all the
assets and certain liabilities of New Direction Centers of America, L.L.C. (New
Directions) and Horizon Lodges of America, Inc. (HLA) (together the "Sellers").
The Sellers' assets relate to the operation of a community correction business
in Oklahoma City, Oklahoma. The purchase price for the assets acquired was
$1,000,000 (the Note), the assumption of a "royalty" fee for the next 20 years
of at least $6,000 per month due to the original permitting owner, 1,000,000
shares of common stock of the Company, and approximately $1,000,000 in
liabilities.
The acquisition of these assets was accounted as a purchase in accordance
with Accounting Principles Board Opinion No. 16, with the cost allocated to the
net assets acquired based on their estimated fair values. The operations of the
New Directions business have been included in the financial statements of the
Company from the date of acquisition.
The assets acquired included a $227,000 Certificate of Deposit and the
facility and equipment which the business operates from which is zoned for use
as a community correction center valued at $450,000. Approximately $1,753,000 of
the purchase price was allocated to contract rights acquired. The contract
rights relate to an annually renewable contract with the Oklahoma Department of
Corrections. This asset is being amortized over a nine-year period which is
management's estimate of the expected life of the contract.
The promissory note issued to New Directions bears interest of 10% per
annum with principal and interest due in three years. Management has discounted
the face value of the Note of $1,331,000 by $392,854 at March 31, 1999 using a
15% effective rate of interest.
NOTE 9 - DISCONTINUED OPERATION
Effective January 15, 1999, the Company spun-off its wholly-owned
subsidiary, Charlie O Beverages to all the Company's shareholders. Beverages
operated the original in-home soda fountain business. Beverages has been for
sale since December 1996 at which time the Company wrote-down the assets of
Beverages to their net realizable value. The Company issued 2,600,000 shares of
common stock of Beverages, which was distributed to the Company's shareholders
at one share of Beverages for each 3.2582 shares of the Company. The Company
recorded a loss of $17,301 at March 31, 1999 with regard to this transaction.
Item 2. Management's Discussion and Analysis or Plan of Operation
The following discussion should be read in conjunction with the Company's
financial statements and notes thereto included elsewhere in this Form 10-QSB
report. In addition, the discussion of the Company's expected Plan of Operation,
included in the 1998 Form 10-KSB, is incorporated herein in its entirety as the
discussion of the Plan of Operation as required by Item 303(a) of Regulation
S-B.
Plan of Operation
Effective June 1, 1998, NDAC completed the acquisition of the assets and
certain liabilities of New Directions related to the operation of a community
correction business. NDAC runs a community correction center, commonly known as
a halfway house, that currently has approximately 140 beds available but is
licensed to provide up to 300 beds. NDAC operates under a contract with the
Oklahoma Department of Corrections, which provides clients to NDAC.
With the NDAC acquisition, the Company intends to shift its growth focus to
the community corrections business and either liquidate or totally de-emphasize
its other operating subsidiaries.
The Community Correction Business
The facility operated by NDAC is a non-secure residential facility for
adult male and female offenders transitioning from institutional to independent
living. Offenders are eligible for these programs based upon the type of offense
committed and behavior while incarcerated in prison. Offenders generally spend
the last six months of their sentence in a community corrections program. The
goal and mission of NDAC's community corrections business is to reduce the
likelihood of an inmate committing an offense after release by assisting in the
reunification process with family and the community. Offenders must be employed,
participate in substance abuse programs, submit to frequent random drug testing,
and pay a predetermined percentage of their earnings to the government to offset
the cost of the program. The Company supervises these activities and also
provides life skills training, case management, home confinement supervision and
family reunification programs at its facilities.
NDAC's facility has received accreditation from the American Correctional
Association (the ACA), the governing body for accreditation. The ACA has 25
mandatory standards and 263 non-mandatory standards regarding staff working
conditions and correctional facility living conditions. A community correction
facility that is ACA accredited can take private clients as well as Federal
clients.
Business Strategy
The Company's business strategy is to be come a leading developer and a
manager of a quality privatized community correction facilities, initially in
Oklahoma and then expanding interstate. Management intends on seeking a larger
community corrections business by expanding into other zoned facilities, either
internally and through acquisitions. The Company intends on obtaining and
maintains ACA accreditation for all of its facilities.
The Company will operate each facility under its management. The Company
will also either directly or through subcontractors, provide health care and
food service. In the future, the facilities may offer special rehabilitation and
educational programs, such as academic or vocational education, job and life
skills training, counseling and work and recreational programs.
Liquidity and Capital Resources - March 31, 1998 (unaudited) compared to March
31, 1999 (unaudited)
The Company has had severe liquidity problems for the last several years.
The Company's liquidity is reflected in the table below, which shows reported
deficiencies in working capital for the periods presented.
March 31, December 31,
1999 1998 1998 (audited)
----------- ------------ -----------
Deficiency in working capital $ (268,631) $ (921,789) $ (344,852)
Although the Company's working capital is negative, the Company has been
able to meet its obligations as a result of the financial support received from
certain of the Company's related parties. Current working capital, which has
been provided in the form of notes payable, has been primarily supplied either
by R.C. Cunningham II, the Company's chairman and president ("Cunningham") or by
Aztor Holdings, Inc., a Phoenix, Arizona-based investment company ("Aztor").
Aztor holds various notes and liabilities against the Company and has agreed to
forebear and restructure a majority of these liabilities as part of the
acquisition by NDAC.
Exclusive of funds required for debt repayment, the Company believes that
it can borrow any additional funds from its related parties to maintain its
operations, although there can be no assurance that such funds will be available
when needed. In the event that the Company cannot refinance, or obtain
forbearance on its current liabilities or on its long-term liabilities as they
come due, the Company will undoubtedly face further severe liquidity problems
which may lead to litigation, the inability to transact business, and/or
foreclosure actions being initiated against a majority of the Company's assets.
In December 1998, the Company borrowed $35,000 from First Enterprise Bank
under a note bearing interest at prime plus 3% per annum due on May 20, 1999.
Proceeds of the borrowing were used to cure the default on the real estate taxes
payable on the Business Park. Accordingly, the Oklahoma Industrial Finance
Authority ("OIFA") loan, which was in default due to the delinquent real estate
taxes, is now no longer in default and is recorded as notes payable.
In June 1999, the Company refinanced the debt on CO Park. The debt was
replaced by a single note in the amount of $2,500,000 payable to a bank with
interest at 8.8% that matures in June 2009.
As discussed above, the Company acquired certain assets related to the
operation of a community correction business subsequent to the quarter-end. The
purchase price for the assets acquired was the issuance of 1,000,000 shares of
common stock of the Company, $1,000,000 in a note payable and the assumption of
approximately $1,464,000 of liabilities. The note issued to New Directions bears
interest of 10% per annum and is due in three years.
The Company believes the operations of the community corrections business
will be cash flow positive and be profitable and that the cash flow from the new
business will be sufficient to service the debt payments under the note and the
mortgage payment on the facility. The Company also intends to continue the
rehabilitation of the facility in order to bring the inmate occupancy up to 300
beds. In the event that cash flow is insufficient to satisfy the Company's
needs, management believes that it can borrow any additional funds from its
related parties to maintain its operations.
Results of Operations - The quarter ended March 31, 1999 compared to the quarter
ended March 31, 1998
The following table illustrates the Company's revenue mix:
Quarter ended
March 31,
--------------------------
1999 1998
--------- ---------
NDAC revenue $ 389,337 $ -
Business Park revenue 77,781 69,613
Other revenue - 2,202
--------- ---------
Total revenue $ 467,118 $ 71,815
========= =========
Total revenues increased by $395,303 or 550% during the first quarter of
1999 as compared to the same period in 1998, primarily due to the Company's NDAC
subsidiary. In June 1998 the Company acquired through NDAC a minimum security
correctional facility. For the first quarter of 1999 the Correctional Business
generated $389,337 (83%) of total revenues.
Business Park revenues increased $8,168 (12%) during the first quarter of
1999 as compared to the same period in 1998. This increase is attributable to
the renegotiated leases from one year leases to three to five year leases at an
average increase of $.39 per square foot. At March 31, 1999 the Business Park
was 100% occupied and the Company had a signed lease on an additional 19,000
square feet or 15% of the total square footage. The Company expects the tenant
to take occupancy during the second quarter of 1999. The Company believes its
long-term prospects will improve with longer leases and higher rates. Losses of
tenants in the future could affect future operations and financial position
because of the cost of new leasehold improvements and lower revenue due to any
prolonged vacancy. There is no assurance the Company will return to its
historically high occupancy rate.
Total operating expenses for the three months ended March 31, 1999 were
$361,922 as compared to total operating expenses for the comparable 1998 period
of $45,345. The increase in the 1999 expenses was due to the NDAC subsidiary.
For the three months ended March 31, 1999, the NDAC subsidiary accounted for
$318,764 or 88% of the total operating costs. The amortization of the NDAC
intangible assets resulted in an increase in depreciation and amortization
expense for the current period of $48,689 over the 1998 period. In addition, the
NDAC subsidiary accounted for $260,401 or 89% of general and administrative
expenses.
Interest expense increased by $86,570 or 156% for the first quarter of 1999
as compared to the comparable period in 1998, primarily due to the NDAC
subsidiary. The amortization of the royalty payable and the purchase note in
connection with the NDAC acquisition represented $49,642 or 57% of this
increase. In addition, the Company assumed approximately $1,000,000 in
liabilities with the acquisition of the Correctional Business.
Loss from discontinued operations for the March 1999 period relates to
spin-off of the Company's subsidiary, Beverages.
The Company recorded net loss in the first quarter 1999 of approximately
$53,079 or less than $.01 per share, compared to a net loss in the first quarter
1997 of $27,664, or $.01 per share. This increase in losses was due primarily to
the spin-off the Beverages subsidiary and the increase of costs associated with
the debt issued in the acquisition of the correction business.
Capital Expenditures and Commitments
During the first quarter ending March 31, 1999, the Company spent
approximately $138,000 on capital expenditures, primarily for leasehold
improvements at the Business Park. The Company expects to spend an additional
$62,000 for capital expenditures, primarily for leasehold improvements, on its
Business Park operations during the remainder of fiscal 1999.
Factors that May Affect Future Results
A number of uncertainties exist that may affect the Company's future
operating results. These include the uncertain general economic conditions, the
ongoing support of the related parties, the ability of the Company to refinance
its notes payable on satisfactory terms, and the Company's ability to acquire
sufficient funding to sustain its operations and develop new businesses. A
majority of these issues directly or indirectly relate to the Company's ability
to sell additional equity or obtain additional debt at reasonable prices or
rates, if at all. The Company and all its subsidiaries have had unsuccessful
operating histories and have been consistently unprofitable and if this trend
continues the Company, or any subsidiary, may have to seek formal court
protection from creditors.
Forward-Looking Statements
Certain statements and information contained in this Report concerning
future, proposed, and anticipated activities of the Company, certain trends with
respect to the Company's revenue, operating results, capital resources, and
liquidity or with respect to the markets in which the Company competes and other
statements contained in this Report regarding matters that are not historical
facts are forward-looking statements, as such term is defined in the Securities
Act. Forward-looking statements, by their very nature include risks and
uncertainties, many of which are beyond the Company's control. Accordingly,
actual results may differ, perhaps materially, from those expressed in or
implied by such forward-looking statements.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not aware of any litigation either pending, asserted,
unasserted or threatened to which the Company or any of its subsidiaries is a
party or of which any of their property is the subject, except as follows:
In February 1998, a lawsuit was filed by one of the owners of New Direction
Centers of America, L.L.C. against the Company relating to the purchase of the
community correctional business. On January 18, 2000, a settlement was reached
which includes a payment of $76,000.
The Company's Business Park operation occasionally has disputes with
tenants regarding its lease agreements. In the opinion of management, such
matters will be resolved without material effect on the Company's results of
operations or financial condition.
Item 2. Changes in Securities
None
Item 3. Defaults Upon 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
Exhibits
None
Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: March 31, 2000 SOONER HOLDINGS, INC.
------------------------------
(Registrant)
By: R. C. Cunningham II
------------------------------
R. C. Cunningham II, President
(Chairman of the Board)
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