U.S. 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 March 31, 1996
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OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-2290
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SOUTHERN ACCEPTANCE CORPORATION
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(Exact name of small business issuer as specified in its charter)
Georgia 58-0898219
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(State or other jurisdiction (I.R.S. Employer I.D. No.)
of incorporation or organization)
277 Pat Mell Road, Suite A, Marietta, GA 30060
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(Address of principal executive offices)
(770) 432-6684
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(Issuer's telephone number)
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 X NO
As of May 10, 1996 the number of shares of the issuer's
common stock outstanding was 5,238,905.<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
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CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
SOUTHERN ACCEPTANCE CORPORATION AND SUBSIDIARIES
March 31,
1996
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ASSETS
Current Assets:
Cash and Cash Items $ 217,942
Other Current Assets 852
---------
Total Current Assets 218,794
Property, Plant and Equipment,
at cost 165,487
Accumulated Depreciation (121,620)
---------
43,867
---------
TOTAL ASSETS $ 262,661
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts and Notes Payable $ 10,690
Other Current Liabilities 825
---------
Total Current Liabilities 11,515
Long-term Debt 37,985
Stockholders' Equity:
Common Stock 521,347
Additional paid-in capital 2,615,506
Retained-earnings (deficit) (2,923,692)
----------
213,161
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 262,661
=========
See notes to condensed consolidated financial statements.
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CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
SOUTHERN ACCEPTANCE CORPORATION AND SUBSIDIARIES
Quarter Ended
March 31,
--------------
1996 1995
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Income:
Interest $ 1,820 $ 1,630
Rental income 1,742 3,806
Sales commissions 6,242 -0-
Sales of property held
for resale -0- 127,922
------- -------
Gross revenues 9,804 133,358
Expenses:
Interest 1,056 2,981
Commissions 9,461 7,021
Cost of sales of property
held for resale -0- 124,330
Administrative and general 27,862 28,510
Depreciation 2,800 3,510
------- -------
Total expenses 41,179 166,352
------- -------
Net (loss) $(31,375) $(32,994)
======= =======
Net (loss) per share $ (.01) $ (.01)
Dividends per share -0- -0-
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
SOUTHERN ACCEPTANCE CORPORATION AND SUBSIDIARIES
Quarter Ended
March 31,
---------------
1996 1995
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Net cash provided by (used in):
Operating activities $(32,299) $ 88,571
Investing activities 122,381 -0-
Financing activities (868) (23,588)
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Net (decrease) in cash and
cash equivalents 89,214 64,983
Cash and cash equivalents at
beginning of period 128,728 11,093
------- -------
Cash and cash equivalents
at end of period $217,942 $ 76,076
======= =======
See notes to condensed consolidated financial statements.
-3-<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SOUTHERN ACCEPTANCE CORPORATION AND SUBSIDIARIES
March 31, 1996
Note A - Basis of Presentation
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information
and with the rules and regulations of the Securities and Exchange
Commission (the "SEC"). Accordingly, they do not include all of
the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included.
The results of operations for the quarter ended March 31,
1996 are not necessarily indicative of the results that may be
expected for the full year. These financial statements should be
read in conjunction with the Company's financial statements and
related notes in the Company's 1995 Annual Report on Form 10-K.
Note B - Proposed Merger
On January 22, 1996, the Company entered into an Agreement
and Plan of Merger (the "Merger") with Efficiency Lodge, Inc., a
Georgia corporation ("ELI") pursuant to which ELI will be merged
into the Company. As part of the Merger, the ELI shareholders
will receive approximately 95% of the shares of the surviving
corporation. Shareholders of the Company will receive one share
of stock of the surviving corporation for each one hundred shares
of stock of the Company held by them prior to the Merger and
collectively will hold 5% of the shares of the surviving
corporation. On January 25, 1996, the Company filed a preliminary
proxy statement with the SEC concerning the proxy statement to be
sent to the shareholders of the Company in connection with the
proposed Merger. Following review of the proxy statement by the
SEC, the Company will call a special meeting of its shareholders
to consider the proposed Merger.
Note C - Change in Fiscal Year
On September 12, 1995 the Company's Board of Directors voted
to change the Company's fiscal year from September 30 to December
31 in anticipation of the proposed merger discussed in Note B,
and a Form 8-K to report this event was filed with the SEC.
-4-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Rental income for the quarter ended March 31, 1996 decreased
from the corresponding quarter in the preceding year due to the
loss of a tenant in its office building and also to the sale of a
piece of adjacent rental property. This decrease in revenue was
compensated for by commissions earned from residential sales
activity during the quarter ended March 31, 1996 compared to an
uneventful corresponding quarter in the preceding year. Also,
the Company's remaining piece of investment property was sold for
book value during the quarter ended March 31, 1996, while its
penultimate piece of investment property was sold at a small
profit during the comparable period in the preceding year.
Although the Company is exercising tight expense controls, it
continues to suffer from a lack of sufficient operating revenues
to cover administrative and general expenses.
The Company's financial condition is stable, with a current
ratio of 19 to 1. The Company hopes to use some of these funds
to buy and sell property at a profit. There is no assurance,
however, that such transactions will be consummated. Management
anticipates that some of the Company's funds will continue to be
used to pay legal, accounting and other expenses in connection
with the proposed Merger.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
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None
Item 2. Changes in Securities
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None
Item 3. Defaults upon Senior Securities
-------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
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None
Item 5. Other Information
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None
Item 6. Exhibits and Reports on Form 8-K
---------------------------------
(a) The following exhibit is filed as a part of this
report:
Exhibit 27 - Financial Data Schedule
(b) None
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the issuer has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
SOUTHERN ACCEPTANCE CORPORATION
(Issuer)
Date: May 13, 1996 /s/ J. A. Cochran
J. A. Cochran, President
Date: May 13, 1996 Bonnie L. Byers
Bonnie L. Byers, Vice President and
Secretary-Treasurer
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