<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 2)
Sound Source Interactive, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.001
- --------------------------------------------------------------------------------
(Title of Class of Securities)
83608K 107
- --------------------------------------------------------------------------------
(CUSIP Number)
Allyn R. Burroughs
5075 Spyglass Hill Drive
Las Vegas, NV 89122
- --------------------------------------------------------------------------------
(Name, address, and telephone number of Person
authorized to Receive Notices and Communications)
April 27, 1998
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. / /
Check the following box if a fee is being paid with the statement. / /
<PAGE>
CUSIP No. 83608K 107 SCHEDULE 13D Page 2 of 7 Pages
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) NAMES OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
ASSI, Inc.
- -------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
- -------------------------------------------------------------------------------
(3) SEC USE ONLY
- -------------------------------------------------------------------------------
(4) SOURCE OF FUNDS*
WC
- -------------------------------------------------------------------------------
(5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT / /
TO ITEMS 2(d) or 2(e)
- -------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Nevada
- -------------------------------------------------------------------------------
NUMBER OF SHARES (7) SOLE VOTING POWER
BENEFICIALLY OWNED
BY EACH REPORTING 1,140,000
PERSON WITH --------------------------------------------------
(8) SHARED VOTING POWER
None
--------------------------------------------------
(9) SOLE DISPOSITIVE POWER
1,140,000
--------------------------------------------------
(10) SHARED DISPOSITIVE POWER
None
- -------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,140,000
- -------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN / /
SHARES*
- -------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.3%
- -------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
CO
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 2 of 7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
CUSIP No. 83608K 107 SCHEDULE 13D Page 3 of 7 Pages
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) NAMES OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
Louis Habash
- -------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
- -------------------------------------------------------------------------------
(3) SEC USE ONLY
- -------------------------------------------------------------------------------
(4) SOURCE OF FUNDS*
Not Applicable
- -------------------------------------------------------------------------------
(5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT / /
TO ITEMS 2(d) or 2(e)
- -------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
- -------------------------------------------------------------------------------
NUMBER OF SHARES (7) SOLE VOTING POWER
BENEFICIALLY OWNED
BY EACH REPORTING None
PERSON WITH --------------------------------------------------
(8) SHARED VOTING POWER
1,140,000
--------------------------------------------------
(9) SOLE DISPOSITIVE POWER
None
--------------------------------------------------
(10) SHARED DISPOSITIVE POWER
1,140,000
- -------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,140,000
- -------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN / /
SHARES*
- -------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.3%
- -------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
IN
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 3 of 7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
STATEMENT ON SCHEDULE 13D
This Amendment No. 2 to Schedule 13D is filed by ASSI, Inc., a
Nevada corporation ("ASSI"), and Louis Habash ("Habash") to amend and update
the Schedule 13D dated August 3, 1996, which was previously amended by
Amendment No. 1 dated October 10, 1996 (the "Original Schedule 13D"). All
capitalized terms not otherwise defined herein shall have the meanings
assigned to them in the Original Schedule 13D. Items not included in this
Amendment are either not amended or not applicable.
The purpose of this Amendment No. 2 is to reflect the acquisition by
ASSI of 1,100,000 shares of common stock of the Company in exchange for
warrants held by ASSI to acquire 4,816,657 shares of Common Stock of the
Company in connection with a Settlement Agreement dated as of April 27, 1998
by and among ASSI, the Company and certain other parties (the "Settlement
Agreement").
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 is amended to read as follows:
ASSI beneficially owns 1,140,000 shares of Common Stock. Of this
amount, 40,000 shares were purchased from another shareholder of the Company
in October 1995 for $200,000 and the remaining 1,100,000 shares were acquired
from the Company as part of the Settlement Agreement in exchange for
4,816,657 warrants held by ASSI. Of these warrants exchanged by ASSI,
2,000,000 warrants were acquired in April 1996 in exchange for consulting
Page 4 of 7 Pages
<PAGE>
services provided by ASSI to the Company, and the balance was purchased as
follows: (1) 800,000 warrants were purchased from the Company in October 1995
as part of a purchase of 1,100,000 warrants for $55,000 in connection with
a private offering of notes and warrants by the
Company, and (ii) 2,016,657 warrants were acquired in July 1996 upon conversion
of $504,164 in principal and accrued interest on an outstanding loan by ASSI to
the Company. All funds used to purchase the 40,000 shares and the purchased
warrants were working capital funds of ASSI.
Item 4. PURPOSE OF TRANSACTIONS.
Item 4 is amended to read as follows:
The shares of Common Stock purchased by ASSI were purchased as an
investment based on the belief of ASSI that they provided an opportunity for
long-term appreciation.
(a) In connection with the Settlement Agreement, ASSI and Habash
have agreed pursuant to a lock-up agreement that during the period commencing
April 24, 1998 and ending May 30, 1999, they will not, without the prior
written consent of the Company, sell or otherwise encumber their shares of
Common Stock of the Company in an aggregate amount in excess of the product
of 94,620 times the number of full calendar months (commencing with the month
of May 1998) elapsed since April 24, 1998.
(b)-(c) None.
(d) Pursuant to the Settlement Agreement, the Company's Board of
Directors has been increased from five (5) to seven (7) members and Richard
Azevedo, Samuel Poole, Wayne Rogers and John Wholihan have been appointed to
fill the four (4) vacant board seats. In addition, under the Settlement
Agreement, the Company has agreed to identify and engage a qualified chief
financial officer within ninety (90) days or as soon as otherwise practicable
as determined by the Board of Directors or a committee thereof.
(e)- (j) None.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 is amended to read as follows:
(a) As of the date of this Schedule, ASSI was the beneficial owner
of 1,140,000 shares of Common Stock representing approximately 20.3% of the
5,615,099 shares of Common Stock outstanding based upon the information
contained in the Company's Quarterly Report on Form 10-QSB for the period
ending December 31, 1997.
As sole shareholder of ASSI, Habash beneficially owns all of the
shares of Common Stock beneficially owned by ASSI.
Except for the currently exercisable portion of the option issued to
James under the Company's 1995 Stock Option Plan, as described under Item 6
below, Burroughs and James are not the beneficial owner of any shares of
Common Stock and specifically disclaim any beneficial ownership in the shares
of Common Stock beneficially owned by ASSI.
(b) ASSI has sole power to vote or direct the vote and to dispose or
direct the disposition of the 1,140,000 shares of Common Stock beneficially
owned by it. Habash, as sole shareholder of ASSI, shares the power to vote or
direct the vote, and to dispose or direct the disposition of, the Common Stock
held by ASSI.
Page 5 of 7 Pages
<PAGE>
(c) On April 27, 1998, ASSI, the Company, and certain other parties
entered into the Settlement Agreement dated as of April 24, 1998 relating to
certain disputes which had arisen among the parties, including certain
lawsuits filed against the Company, Chairman and Chief Executive Officer
Vincent Bitetti and President and Chief Operating Officer Ulrich Gottschling
by The Boston Group, Inc., ASSI, Inc. and Mark James. The lawsuits had
alleged breach of contract concerning Board of Directors nominations and
breach of duty with respect to an attempt to increase the size of the Board
of Directors and fill the new positions with managements' nominees. As part
of the settlement of those disputes, the board of Directors was increased to
seven (7) members and ASSI exchanged warrants to purchase 4,816,657 shares of
Common Stock of the Company for 1,100,000 shares of Common Stock of the
Company, subject to the lock-up agreement described under Item 4(a) above.
The parties to the Settlement Agreement acknowledged that there were multiple
settlements under that Agreement and that the value of certain claims ASSI
had against the Company and which were being released had been factored into
the exchange by ASSI of its warrants for shares of Common Stock of the
Company.
(d)-(e) Not applicable.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Item 6 is amended to read as follows:
In April 1996, ASSI entered into a Stockholder Voting Agreement with
the Company, Vincent J. Bitetti and Eric Winston, under which Messrs. Bitetti
and Winston agreed to vote their shares in favor of ASSI's nominee to the
Board of Directors, which was to have five members. In addition, under the
Voting Agreement, ASSI agreed to vote in favor of two nominees to the Board
of Directors selected by Mr. Bitetti for so long as Mr. Bitetti owned at
least 20% of the issued and outstanding shares of Common Stock of the
Company, and one nominee selected by Mr. Bitetti for so long as he owned less
than 20% but at least 10% of the issued and outstanding shares of Common
Stock of the Company.
Pursuant to the Settlement Agreement, the Company received the
consent of ASSI to certain matters relating to the existing Voting Agreement
(the "Consent"). Among other things, the Consent provides that as between the
Company, ASSI, The Boston Group, L.P. and Vincent J. Bitetti, the nominees
for the new seven-person Board of Directors will be determined as follows: up
to two persons may be nominated by Bitetti as long as he holds 750,000 or
more shares of the Company's Common Stock (but only one person, if Bitteti
holds more than 500,000 and less than 750,000 shares, and no person if
Bitetti holds 500,000 or fewer shares); one person may be nominated by ASSI
as long as it holds 500,000 or more shares of the Company's common stock (but
no person if ASSI holds fewer than 500,000 shares); up to two persons may be
nominated by The Boston Group, L.P. (including as assignee of the rights of
Joseph Stevens & Company, L.P.) pursuant to the Underwriting Agreement dated
July 1, 1996 among the Company, The Boston Group, L.P. and Joseph Stevens &
Company, L.P. (the "Underwriting Agreement") so long as it may be in effect
in pertinent part; one person (an "Expansion Member") may be nominated by Mr.
Bitetti (subject to approval of such person by ASSI (unless a renomination of
a presently serving nominee)); and one person (another "Expansion Member")
may be nominated by ASSI (subject to approval of such person by Mr. Bitetti
(unless a renomination of a presently serving nominee)). Each Expansion
Member must be independent of the Company and the person nominating such
Expansion Member and must meet certain other requirements set forth in the
Consent. Mark James is ASSI's nominee pursuant to the Voting Agreement and
the Consent and John Wholihan is ASSI's Expansion Member nominee pursuant to
the Consent.
The Voting Agreement terminates on the earlier of July 8, 2001 or
such time as Messrs. Bitetti and Winston collectively are the beneficial
owners of less than 10% of the issued and outstanding Common Stock of the
Company. Messrs. Bitetti and Winston have granted irrevocable proxies to
ASSI, and ASSI has granted an irrevocable proxy to Mr. Bitetti, consistent
with the terms of the Voting Agreement. The Consent automatically terminates
upon termination of the Voting Agreement and may be terminated earlier, at
the election of ASSI, in the event of a breach of the Settlement Agreement by
the Company, Bitetti or Ulrich Gottschling, in which case the authorized
number of directors will be automatically reduced from seven (7) to five (5)
at the next annual meeting of stockholders of the Company and nominations and
elections for the resulting five (5) member Board of Directors will be
governed by the Voting Agreement and the Underwriting Agreement.
Mark James was appointed a director of the Company in July 1996.
Under the Company's 1995 Stock Option plan, each nonemployee director
automatically receives an option to acquire 10,000 shares of Common Stock
upon appointment and for each year of service on the Board of Directors.
James has received an option to purchase 10,000 shares of Common Stock at
$4.5625 per share, vesting 50% annually beginning July 10, 1997. In July
1997, James received an additional option to purchase 10,000 shares of
Common Stock at $1.00 per share, vesting 50% annually beginning July 10, 1998.
Item 7. MATERIAL TO BE FILED AS EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT
Exhibit 9: Settlement Agreement dated as of April 24, 1998 by
and among Sound Source Interactive, Inc., Inc.,
ASSI, Inc., NCD, Inc., The Boston Group, LP,
Vincent J. Bitetti, Ulrich E. Gottschling, Mark
A. James and Robert G. Kalik (incorporated by
reference to Exhibit 10.1 of the Current Report
on Form 8-K dated April 27, 1998, of Sound Source
Interactive, Inc.).
Exhibit 10: Consent of ASSI, Inc. dated as of April 24, 1998
pursuant to the Stockholder Voting Agreement, dated
as of April 30, 1996, among ASSI, Inc., Vincent J.
Bitetti and Eric H. Winston (incorporated by
reference to Exhibit 9.1 of the Current Report on
Form 8-K dated April 27, 1998, of Sound Source
Interactive, Inc.).
Exhibit 11: Lock-Up Agreement dated as of April 24, 1998
among ASSI, Inc., NCD, Inc., Louis Habash and
Sound Source Interactive, Inc. (incorporated by
reference to Exhibit 10.2 of the Current Report
on Form 8-K dated April 27, 1998, of Sound Source
Interactive, Inc.).
Page 6 of 7 Pages
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief,
we certify that the information set forth in this statement is true, complete
and correct.
Dated: May __, 1998 ASSI, INC.
By: /s/ Louis Habash, President
--------------------------------------
Louis Habash, President
/s/ Louis Habash
------------------------------------------
Louis Habash
Page 7 of 7 Pages
