Attached files
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009
OR
[ ] TRANSITION UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number 0-18344
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SOONER HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Oklahoma 73-1275261
-------- ----------
(state of (IRS Employer
incorporation) I.D. Number)
127 Northwest 62nd Street, Suite A
Oklahoma City, OK 73118
(405) 848-7575
----------------------------------------------------
(Address and telephone number of registrant's principal
executive offices and principal place of business)
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $0.001 par value
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes [ ] No [X]
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 twelve 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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was last sold, or the $0.14 average bid and asked price of such common equity,
as of the last business day of registrant's most recently completed second
fiscal quarter (March 31, 2009): $456,677.
As of December 28, 2009, there were 12,688,016 shares of the Registrant's Common
Stock, par value $0.001 per share, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is
incorporated: (1) Any annual report to security holders; (2) Any proxy or
information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933. The listed documents should be clearly
described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980). None
ii
TABLE OF CONTENTS
PART I
ITEM 1 Business 1
ITEM 2 Properties 8
ITEM 3 Legal Proceedings 8
ITEM 4 Submission of Matters to a Vote of Security Holders 8
PART II
ITEM 5 Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities 8
ITEM 7 Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
ITEM 8 Financial Statements and Supplementary Data 11
ITEM 9 Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 21
ITEM 9A(T) Controls and Procedures 22
ITEM 9B Other Information 23
PART III
ITEM 10 Directors, Executive Officers and Corporate Governance 23
ITEM 11 Executive Compensation 28
ITEM 12 Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters 29
ITEM 13 Certain Relationships and Related Transactions, and Director
Independence 30
ITEM 14 Principal Accounting Fees and Services 31
PART IV
ITEM 15 Exhibits, Financial Statement Schedules 32
iii
PART I
ITEM 1. BUSINESS.
Summary and Development of the Company
--------------------------------------
Our company, Sooner Holdings, Inc., an Oklahoma corporation, was formed
in 1986 to enter the in-home soda fountain business. We never developed this
business into a national market. Subsequently, we evolved into a
multi-subsidiary holding company in diverse businesses. From 1993, when we were
restructured, until June 1998 we sought acquisitions. In November 1987 we
acquired a business park from R.C. Cunningham II, our president and a director.
In June 1998 we acquired, through our subsidiary ND Acquisition Corp., the
assets and certain liabilities of New Direction Centers of America, L.L.C. and
entered the minimum-security correctional business. In May 2000 we purchased the
rights to a new, Class 5, hardware and software computer-based platform that
resembles the computer-based soft switch. We named it "Cadeum" and organized a
wholly owned subsidiary, Sooner Communications, Inc., through which we proposed
to market Cadeum to telecommunications carriers.
Until the events described below, we operated the three above-described
businesses through three subsidiaries, ND Acquisition Corp., Charlie O Business
Park Incorporated and Sooner Communications, Incorporated. These subsidiaries
and a brief summary of their businesses until their demise in fiscal years 2003
and 2004 follow.
ND Acquisition Corp.
--------------------
ND Acquisition Corp. (NDAC) owned and operated a minimum-security
correctional facility for women offenders (Northgate) and a community sentencing
facility for men (Eastgate). Both facilities were located in Oklahoma City,
Oklahoma. In July 2003 we were notified that the NDAC property was included in
an area marked for improvement by the Oklahoma Capital Development Authority. In
November 2003 we sold this property to such Authority and exited the
correctional facility line of business.
Sooner Communications, Inc.
---------------------------
On May 2, 2000 the Sooner Communications (Communications) subsidiary
purchased all the rights to a computer based platform called Cadeum. Cadeum was
designed to host computer-based telephony products developed specifically for
telecommunication providers. We planned to market these products on a wholesale
level to telecommunication carriers. We completed beta testing the answering
service section of Cadeum with a large Texas-based regional telecommunication
provider. Due to certain interface issues, marketing of the answering service
was suspended awaiting a resolution. We resolved these issues in the early
second quarter of fiscal 2002, at which time marketing of the answering service
was to resume. However, the Texas-based regional telecommunications provider did
not resume marketing, due to problems inherent in the telecommunications
industry. We consider this business to now be defunct.
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Charlie O Business Park Incorporated
------------------------------------
Charlie O Business Park, Inc. ("CO Park") operated a multi-unit rental
property for business and industrial tenants located in Oklahoma City, Oklahoma.
CO Park became an operating subsidiary upon its formation in November 1987 and
we owned 100% of the subsidiary. During fiscal year 2002 we were notified by the
Oklahoma Department of Transportation ("ODOT") that the Business Park's improved
real property would be condemned as part of the re-working of Interstate Highway
40. In late July 2003 we settled with ODOT's appraisers for $4,350,000 for the
condemnation of the property. We searched for a replacement property to continue
this line of business, but we found none.
Business of the Company
-----------------------
Our current business plan is to seek, investigate, and, if warranted,
acquire one or more properties or businesses, and to pursue other related
activities intended to enhance shareholder value. The acquisition of a business
opportunity may be made by purchase, merger, exchange of stock, or otherwise,
and may encompass assets or a business entity, such as a corporation, joint
venture, or partnership. We have no capital, and it is unlikely that we will be
able to take advantage of more than one such business opportunity. We intend to
seek opportunities demonstrating the potential of long-term growth as opposed to
short-term earnings.
As reported in our Form 10-K FYE 09-30-08 and as filed with the
Commission on a Form 8-K on July 28, 2008, we had signed a change of control
contract with Mr. Glen McKay of Toronto, Canada which, if the agreement had
closed, would have resulted in the company's pursuit of a business plan
involving the purchase of the monorail system in Las Vegas, Nevada, building of
a high-speed railroad between the monorail and an area near Los Angeles,
California, and the development of real estate opportunities in the adjacent
areas.
The contract with Mr. McKay expired by its own terms without the change
of control having occurred.
We now have an oral agreement with Mr. Georges EmmerSon Caza, of
Beijing, China, regarding his obtaining control of our company. Mr. Caza
proposes to acquire several Chinese companies as subsidiaries of our company.
The specifics of his proposal are not yet determined. Until we enter into a
formal agreement with Mr. Caza, we propose to carry out our plan of business as
first discussed above. We cannot predict to what extent we might incur further
operating losses through any business entity, which we may eventually acquire.
For the next fiscal year, we anticipate incurring a loss as a result of
legal and accounting expenses, filing periodic reports with the Securities and
Exchange Commission, and expenses associated with locating and evaluating
acquisition candidates. We anticipate that until a business combination is
completed with an acquisition candidate, it will not generate revenues other
than interest income, and may continue to operate at a loss after completing a
business combination, depending upon the performance of the acquired business.
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No Rights of Dissenting Shareholders
------------------------------------
We do not intend to provide our shareholders with complete disclosure
documentation including audited financial statements, concerning a possible
target company prior to acquisition, because the Oklahoma Business Corporation
Act vests authority in the Board of Directors to decide and approve matters
involving acquisitions within certain restrictions. Any transaction would be
structured as an acquisition, not a merger, with the Registrant being the parent
company and the acquiree being merged into a wholly owned subsidiary. Therefore,
a shareholder will have no right of dissent under Oklahoma law.
Administrative Offices
----------------------
We currently maintain a mailing address at 127 Northwest 62 Street,
Suite A, Oklahoma City, OK 73118, which is the office address of our chief
executive officer. Other than this mailing address, we do not currently maintain
any other office facilities, and do not anticipate the need for maintaining
office facilities at any time in the foreseeable future. We pay no rent or other
fees for the use of this mailing address.
Employees
---------
We currently have no employees. Management uses consultants, attorneys
and accountants as necessary, and does not anticipate a need to engage any
full-time employees so long as it is seeking and evaluating business
opportunities. The need for employees and their availability will be addressed
in connection with the decision whether or not to acquire or participate in
specific business opportunities. Although there is no current plan with respect
to its nature or amount, remuneration may be paid to or accrued for the benefit
of our officers prior to, or in conjunction with, the completion of a business
acquisition for services actually rendered. See "Executive Compensation" and
under "Certain Relationships and Related Transactions."
ITEM 1A. RISK FACTORS.
1. Conflicts of Interest. Certain conflicts of interest may exist
between the company and its officers and directors. They have other business
interests to which they devote their attention and may be expected to continue
to do so, although management time should be devoted to the business of the
company. As a result, conflicts of interest may arise that can be resolved only
through exercise of such judgment as is consistent with fiduciary duties to the
company. See "Management," and "Conflicts of Interest."
It is anticipated that our officers and directors may actively
negotiate or otherwise consent to the purchase of a portion of their common
stock as a condition to, or in connection with, a proposed merger or acquisition
transaction. In this process, our officers may consider their own personal
pecuniary benefit rather than the best interests of other company shareholders,
and the other company shareholders are not expected to be afforded the
opportunity to approve or consent to any particular stock buy-out transaction.
See "Conflicts of Interest."
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2. Need For Additional Financing. We have limited funds, and such funds
may not be adequate to take advantage of any available business opportunities.
Even if our funds prove to be sufficient to acquire an interest in, or complete
a transaction with, a business opportunity, we may not have enough capital to
exploit the opportunity. The ultimate success of the company may depend upon its
ability to raise additional capital. We have not investigated the availability,
source, or terms that might govern the acquisition of additional capital and
will not do so until it determines a need for additional financing. If
additional capital is needed, there is no assurance that funds will be available
from any source or, if available, that they can be obtained on terms acceptable
to us. If not available, our operations will be limited to those that can be
financed with its modest capital.
3. Regulation of Penny Stocks. Our securities, when available for
trading, will be subject to a Securities and Exchange Commission rule that
imposes special sales practice requirements upon broker-dealers who sell such
securities to persons other than established customers or accredited investors.
For purposes of the rule, the phrase "accredited investors" means, in general
terms, institutions with assets in excess of $5,000,000, or individuals having a
net worth in excess of $1,000,000 or having an annual income that exceeds
$200,000 (or that, when combined with a spouse's income, exceeds $300,000). For
transactions covered by the rule, the broker-dealer must make a special
suitability determination for the purchaser and receive the purchaser's written
agreement to the transaction prior to the sale. Consequently, the rule may
affect the ability of broker-dealers to sell the company's securities and also
may affect the ability of purchasers in this offering to sell their securities
in any market that might develop therefore.
In addition, the Securities and Exchange Commission has adopted a
number of rules to regulate "penny stocks." Such rules include Rules 3a51-1,
15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities
Exchange Act of 1934, as amended. Because our securities may constitute "penny
stocks" within the meaning of the rules, the rules would apply to our company
and to its securities. The rules may further affect the ability of owners of
shares to sell the securities of the company in any market that might develop
for them.
Shareholders should be aware that, according to Securities and Exchange
Commission, the market for penny stocks has suffered in recent years from
patterns of fraud and abuse. Such patterns include (i) control of the market for
the security by one or a few broker-dealers that are often related to the
promoter or issuer; (ii) manipulation of prices through prearranged matching of
purchases and sales and false and misleading press releases; (iii) "boiler room"
practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (iv) excessive and undisclosed
bid-ask differentials and markups by selling broker-dealers; and (v) the
wholesale dumping of the same securities by promoters and broker-dealers after
prices have been manipulated to a desired level, along with the resulting
inevitable collapse of those prices and with consequent investor losses. Our
management is aware of the abuses that have occurred historically in the penny
stock market. Although we do not expect to be in a position to dictate the
behavior of the market or of broker-dealers who participate in the market,
management will strive within the confines of practical limitations to prevent
the described patterns from being established with respect to the company's
securities.
4. No Assurance of Success or Profitability. There is no assurance that
we will acquire a favorable business opportunity. Even if we should become
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involved in a business opportunity, there is no assurance that it will generate
revenues or profits, or that the market price of our common stock will be
increased thereby.
5. Impracticability of Exhaustive Investigation. Our limited funds and
the lack of full-time management will likely make it impracticable to conduct a
complete and exhaustive investigation and analysis of a business opportunity
before we commit our capital or other resources thereto. Management decisions,
therefore, will likely be made without detailed feasibility studies, independent
analysis, market surveys and the like which, if we had more funds available to
us, would be desirable. We will be particularly dependent in making decisions
upon information provided by the promoter, owner, sponsor, or others associated
with the business opportunity seeking our participation. A significant portion
of our available funds may be expended for investigative expenses and other
expenses related to preliminary aspects of completing an acquisition
transaction, whether or not any business opportunity investigated is eventually
acquired.
6. Lack of Diversification. Because of the limited financial resources
that we have, it is unlikely that we will be able to diversify our acquisitions
or operations. Our probable inability to diversify our activities into more than
one area will subject us to economic fluctuations within a particular business
or industry and therefore increase the risks associated with our operations.
7. Reliance upon Financial Statements. We generally will require
audited financial statements from companies that we propose to acquire. Given
cases where audited financials are not available, we will have to rely upon
interim period unaudited information received from target companies' management
that has not been verified by outside auditors. The lack of the type of
independent verification which audited financial statements would provide
increases the risk that our company, in evaluating an acquisition with such a
target company, will not have the benefit of full and accurate information about
the financial condition and recent interim operating history of the target
company. This risk increases the prospect that the acquisition of such a company
might prove to be an unfavorable one for the Company or the holders of our
securities.
Moreover, we will be subject to the reporting provisions of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and thus will
be required to furnish certain information about significant acquisitions,
including audited financial statements for any business that it acquires.
Consequently, acquisition prospects that do not have, or are unable to provide
reasonable assurances that they will be able to obtain, the required audited
statements would not be considered by us to be appropriate for acquisition so
long as the reporting requirements of the Exchange Act are applicable. Should
our company, during the time it remains subject to the reporting provisions of
the Exchange Act, complete an acquisition of an entity for which audited
financial statements prove to be unobtainable, we would be exposed to
enforcement actions by the Securities and Exchange Commission (the "Commission")
and to corresponding administrative sanctions, including permanent injunctions
against the Company and its management. The legal and other costs of defending a
Commission enforcement action would have material, adverse consequences for our
company and its business. The imposition of administrative sanctions would
subject our company to further adverse consequences.
In addition, the lack of audited financial statements would prevent our
securities from becoming eligible for listing on Nasdaq, or on any existing
stock exchange. Moreover, the lack of such financial statements is likely to
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discourage broker-dealers from becoming or continuing to serve as market makers
in the securities of our company. Without audited financial statements, we would
almost certainly be unable to offer securities under a registration statement
pursuant to the Securities Act of 1933, and the ability of the Company to raise
capital would be significantly limited until such financial statements were to
become available.
8. Other Regulation. An acquisition made by our company may be of a
business that is subject to regulation or licensing by federal, state, or local
authorities. Compliance with such regulations and licensing can be expected to
be a time-consuming, expensive process and may limit other investment
opportunities of our company.
9. Indemnification of Officers and Directors. Oklahoma statutes provide
for the indemnification of its directors, officers, employees, and agents, under
certain circumstances, against attorney's fees and other expenses incurred by
them in any litigation to which they become a party arising from their
association with or activities on behalf of the company. The company will also
bear the expenses of such litigation for any of its directors, officers,
employees, or agents, upon such person's promise to repay the company therefor
if it is ultimately determined that any such person shall not have been entitled
to indemnification. This indemnification policy could result in substantial
expenditures by the company which it will be unable to recoup.
10. Director's Liability Limited. Oklahoma Statutes exclude personal
liability of its directors to the company and its stockholders for monetary
damages for breach of fiduciary duty except in certain specified circumstances.
Accordingly, the company will have a much more limited right of action against
its directors than otherwise would be the case. This provision does not affect
the liability of any director under federal or applicable state securities laws.
11. Dependence upon Outside Advisors. To supplement the business
experience of its officers and directors, the company may be required to employ
accountants, technical experts, appraisers, attorneys, or other consultants or
advisors. The selection of any such advisors will be made by the company's
president without any input from stockholders. Furthermore, it is anticipated
that such persons may be engaged on an "as needed" basis without a continuing
fiduciary or other obligation to the company. In the event the president of the
company considers it necessary to hire outside advisors, he may elect to hire
persons who are affiliates, if they are able to provide the required services.
12. Leveraged Transactions. There is a possibility that any acquisition
of a business opportunity by the company may be leveraged, i.e., the company may
finance the acquisition of the business opportunity by borrowing against the
assets of the business opportunity to be acquired, or against the projected
future revenues or profits of the business opportunity. This could increase the
company's exposure to larger losses. A business opportunity acquired through a
leveraged transaction is profitable only if it generates enough revenues to
cover the related debt and expenses. Failure to make payments on the debt
incurred to purchase the business opportunity could result in the loss of a
portion or all of the assets acquired. There is no assurance that any business
opportunity acquired through a leveraged transaction will generate sufficient
revenues to cover the related debt and expenses.
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13. Competition. The search for potentially profitable business
opportunities is intensely competitive. We expect to be at a disadvantage when
competing with many firms that have substantially greater financial and
management resources and capabilities than we do. These competitive conditions
will exist in any industry in which the company may become interested.
14. No Foreseeable Dividends. We have not paid dividends on our common
stock and do not anticipate paying such dividends in the foreseeable future.
15. Loss of Control by Present Management and Stockholders. We may
consider an acquisition in which we would issue as consideration for the
business opportunity to be acquired an amount of our authorized but unissued
common stock that would, upon issuance, represent the great majority of the
voting power and equity of the company. The result of such an acquisition would
be that the acquired company's stockholders and management would control the
resultant company, and our company's management could be replaced by persons
unknown at this time. Such a merger would result in a greatly reduced percentage
of ownership of the company by our current shareholders. In addition, our major
shareholders could sell control blocks of stock at a premium price to the
acquired company's stockholders.
16. Inactive Public Market Exists. There is a public market for our
common stock, but it is inactive and no assurance can be given that an active
market will develop or that a shareholder ever will be able to liquidate his
investment without considerable delay, if at all. If an active market should
develop, the price may be highly volatile. Factors such as those discussed in
this "Risk Factors" section may have a significant impact upon the market price
of the securities offered hereby. Owing to the low price of the securities, many
brokerage firms may not be willing to effect transactions in the securities.
Even if a purchaser finds a broker willing to effect a transaction in these
securities, the combination of brokerage commissions, state transfer taxes, if
any, and any other selling costs may exceed the selling price. Further, many
lending institutions will not permit the use of such securities as collateral
for any loans.
17. Rule 144 Sales. Of the 12,688,016 shares of our common stock
outstanding, none of the shares are "restricted securities" within the meaning
of Rule 144 under the Securities Act of 1933, other than the 9,426,039 shares
owned by our management - and even those can be sold pursuant to Rule 144 one
year after the company files "Form 10 information" with the Commission
immediately after the change of control occurs that is contemplated by the
agreement with Mr. Georges EmmerSon Caza. As restricted shares, these shares may
be resold only pursuant to an effective registration statement or under the
requirements of Rule 144 or other applicable exemptions from registration under
the Act and as required under applicable state securities laws. Rule 144
provides in essence that a person who has held restricted securities for six
months or one year, depending on his status as an affiliate of the company or
not, may, under certain conditions, sell every three months, in brokerage
transactions, a number of shares that does not exceed the greater of 1.0% of a
company's outstanding common stock or the average weekly trading volume during
the four calendar weeks prior to the sale. A sale under Rule 144 or under any
other exemption from the Act, if available, or pursuant to subsequent
registration of shares of common stock of present stockholders, may have a
depressive effect upon the price of the common stock in any market that may
develop.
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18. Blue Sky Restrictions. Many states have enacted statutes or rules
which restrict or prohibit the sale of securities of "blank check" companies to
residents so long as they remain without specific business companies. To the
extent any current shareholders or subsequent purchaser from a shareholder may
reside in a state which restricts or prohibits resale of shares in a "blank
check" company, warning is hereby given that the shares may be "restricted" from
resale as long as the company is a shell company.
In the event of a violation of state laws regarding resale of "blank
check" shares the company could be liable for civil and criminal penalties which
would be a substantial impairment to the Company.
ITEM 2. PROPERTIES.
We have no property other than cash. We do not currently maintain an
office or any other facilities. We currently maintain a mailing address at the
office of our president, R.C. Cunningham II. We pay no rent for the use of this
mailing address. We do not believe that we will need to maintain an office at
any time in the foreseeable future in order to carry out our plan of operations
described herein.
ITEM 3. LEGAL PROCEEDINGS.
We are not, and none of our property is, a party to any pending legal
proceedings, and no such proceedings are known to be contemplated.
No director, officer or affiliate of the company, and no owner of
record or beneficial owner of more than 5.0% of the securities of the company,
or any associate of any such director, officer or security holder is a party
adverse to the company or has a material interest adverse to the Company in
reference to any litigation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
In fiscal 2009 there were no matters submitted to a vote of security
holders through the solicitation of proxies or otherwise. Our last meeting of
shareholders was in 1996.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES.
Our common stock traded on the Pink Sheets until April 10, 2008 when it
moved to the OTC Bulletin Board where it trades under the stock symbol "SOON".
The high and low bid information for the stock during the years ended September
30, 2008 and 2009 is set forth below. The information was obtained from the OTC
BB and Pink Sheets and reflects inter-dealer prices, without retail mark-up,
mark-down or commission and may not represent actual transactions:
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Quarter High Low
---------------------------------------------------------
2008: 1st Qtr 0.080 0.026
2nd Qtr 0.035 0.030
3rd Qtr 0.080 0.000
4th Qtr 0.310 0.020
2009: 1st Qtr 0.230 0.040
2nd Qtr 0.120 0.040
3rd Qtr 0.100 0.040
4th Qtr 0.280 0.030
Holders.
--------
As of December 28, 2009, we had 569 shareholders of record and
12,688,016 shares issued and outstanding. This does not include the holders
whose shares are held in a depository trust in "street" name. As of September
30, 2009, 1,896,139 shares (or approximately 11.2 percent) of the issued and
outstanding stock were held by Depository Trust Company in "street name".
Dividends.
----------
We have not paid or declared any dividends upon our common stock since
our inception and, by reason of our present financial status and our
contemplated financial requirements, do not anticipate paying any dividends in
the foreseeable future. There are no restrictions that limit our ability to pay
dividends on the common stock or that are likely to do so in the future other
than the requirement that dividends be paid out of earnings.
Securities Authorized for Issuance Under Equity Compensation Plans.
-------------------------------------------------------------------
We have no compensation plans under which equity securities are
authorized for issuance.
Recent Sales of Unregistered Securities.
----------------------------------------
During the past three fiscal years, there have been no unregistered
sales of our common stock by the company.
Reports to Security Holders.
----------------------------
We file reports with the Securities and Exchange Commission. These
reports are annual 10-K, quarterly 10-Q and periodic 8-K reports. We will
furnish stockholders with annual reports containing financial statements audited
by independent certified public accountants and such other periodic reports as
we may deem appropriate or as required by law. The public may read and copy any
materials we file with the SEC at the Public Reference Room of the SEC at 100 F
Street, NE, Washington, D.C. 20002. The public may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
Sooner Holdings is an electronic filer, and the SEC maintains an Internet Web
site that contains reports, proxy and information statements and other
information regarding issuers that file electronically with the SEC. The address
of such site is http://www.sec.gov.
------------------
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The following discussion and analysis should be read in conjunction
with the financial statements and the accompanying notes thereto and is
qualified in its entirety by the foregoing and by more detailed financial
information appearing elsewhere. See "Financial Statements."
Plan of Operation for the Next Twelve Months
Our current business plan is to seek, investigate and, if warranted,
acquire one or more properties or businesses, and to pursue other related
activities intended to enhance shareholder value. The acquisition of a business
opportunity may be made by purchase, merger, exchange of stock, or otherwise,
and may encompass assets or a business entity such as a corporation, joint
venture or partnership. We intend to seek opportunities demonstrating the
potential of long-term growth as opposed to short-term earnings.
As reported in our Form 10-K FYE 09-30-08 and as filed with the
Commission on a Form 8-K on July 28, 2008, we had signed a change of control
contract with Mr. Glen McKay of Toronto, Canada which, if the agreement had
closed, would have resulted in the company's pursuit of a business plan
involving the purchase of the monorail system in Las Vegas, Nevada, building of
a high-speed railroad between the monorail and an area near Los Angeles,
California, and the development of real estate opportunities in the adjacent
areas.
The contract with Mr. McKay expired by its own terms without the change
of control having occurred.
We now have an oral agreement with Mr. Georges EmmerSon Caza, of
Beijing, China, regarding his obtaining control of our company. Mr. Caza
proposes to acquire several Chinese companies as subsidiaries of our company.
The specifics of his proposal are not yet determined. Until we enter into a
formal agreement with Mr. Caza, we propose to carry out our plan of business as
first discussed above. We cannot predict to what extent we might incur further
operating losses through any business entity, which we may eventually acquire.
For the next fiscal year, we anticipate incurring a loss as a result of
legal and accounting expenses, filing periodic reports with the Securities and
Exchange Commission, and expenses associated with locating and evaluating
acquisition candidates. We anticipate that until a business combination is
completed with an acquisition candidate, it will not generate revenues other
than interest income, and may continue to operate at a loss after completing a
business combination, depending upon the performance of the acquired business.
Off-Balance Sheet Arrangements
Our company has not entered into any transaction, agreement or other
contractual arrangement with an entity unconsolidated with us under which we
have
10
o an obligation under a guarantee contract,
o a retained or contingent interest in assets transferred to the
unconsolidated entity or similar arrangement that serves as
credit, liquidity or market risk support to such entity for such
assets,
o an obligation, including a contingent obligation, under a
contract that would be accounted for as a derivative instrument,
or
o an obligation, including a contingent obligation, arising out of
a variable interest in an unconsolidated entity that is held by,
and material to, us where such entity provides financing,
liquidity, market risk or credit risk support to, or engages in
leasing, hedging, or research and development services with, us.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements of the company appear as follows:
Page
----
Report of Independent Registered Public Accounting Firm, December 29, 2009 12
Balance Sheets September 30, 2009 and 2008 13
Statements of Operations for the Years ended
September 30, 2009 and 2008 14
Statement of Changes in Shareholders' Equity for the Years ended
September 30, 2009 and 2008 15
Statements of Cash Flows for the Years ended
September 30, 2009 and 2008 16
Notes to Financial Statements 17
11
SMITH, CARNEY & CO., p.c.
CERTIFIED PUBLIC ACCOUNTANTS
Joseph E. Brueggen 5100 N. Brookline, Suite 1000
Kenneth L. Carney Oklahoma City, OK 73112-3627
Kevin L. Fosbenner BUS: (405) 272-1040
Edward W. Granger FAX: (405) 235-6180
Rebecca A. Hembree 1-800-570-1040
Joseph W. Hornick
Kevin D. Howard 5 S. Commerce, Suite 33
Van R. Oliver Ardmore, OK 73401-3924
H. Kirby Smith BUS: (580) 226-1227
FAX: (580) 226-1229
__________________ 1-866-570-1040
www.smithcarney.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders
Sooner Holdings, Inc.:
We have audited the accompanying balance sheets of Sooner Holdings, Inc. as of
September 30, 2009 and 2008 and the related statements of operations, changes in
shareholders' equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Sooner Holdings, Inc. as of
September 30, 2009 and 2008 and the results of its operations and cash flows for
the years then ended, in conformity with accounting principles generally
accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note B to the
financial statements, the Company has suffered losses from operations in recent
years and continues to have a significant shareholders' deficit that raises
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note B. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/ Smith, Carney & Co., p.c.
Oklahoma City, Oklahoma
December 29, 2009
Member American Institute of Certified Public Accountants
Member SEC Practice Section
PCAOB Registered Firm
12
SOONER HOLDINGS, INC.
BALANCE SHEETS
ASSETS
September 30, September 30,
2008 2009
----------- -----------
Current Assets
Cash and cash equivalents $ 269 $ 7,536
----------- -----------
Total Current Assets 269 7,536
----------- -----------
Total Assets $ 269 $ 7,536
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable $ 37,686 $ 43,172
Loans from shareholder 60,428 90,367
----------- -----------
Total Current Liabilities 98,114 133,539
Stockholders' Equity (Deficit)
Preferred stock - undesignated; authorized, 10,000,000 shares; issued
and outstanding, none
Common stock, $.001 par value 100,000,000 shares authorized
12,688,016 shares issued and outstanding 12,688 12,688
Additional paid in capital 6,197,690 6,197,690
Retained earnings (deficit) (6,308,223) (6,336,381)
----------- -----------
Total Stockholders' Equity (Deficit) (97,845) (126,003)
----------- -----------
Total Liabilities and Stockholders' Equity (Deficit) $ 269 $ 7,536
=========== ===========
See accompanying notes to financial statements.
13
SOONER HOLDINGS, INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2009
------------ ------------
2008 2009
------------ ------------
Revenue $ -- $ --
Operating Expenses
General and administrative expense 32,880 22,324
------------ ------------
Total Operating Expenses 32,880 22,324
------------ ------------
Operating Loss (32,880) (22,324)
Other (Expenses) Income
Interest expense (4,305) (5,834)
------------ ------------
Total Other (Expense) Income (4,305) (5,834)
------------ ------------
Net Loss $ (37,185) $ (28,158)
============ ============
Net Loss per Share, Basic and Diluted $ (0.00) $ (0.00)
============ ============
Weighted average of number of shares outstanding 12,688,016 12,688,016
============ ============
See accompanying notes to financial statements.
14
SOONER HOLDINGS, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2009
Common stock Additional Total
------------------------- paid-In Accumulated Stockholders'
Shares Amount capital Deficit Equity (Deficit)
----------- ----------- ----------- ----------- -----------
Balance, September 30, 2007 12,688,016 $ 12,688 $ 6,197,690 $(6,271,038) $ (60,660)
Net Income (Loss) 0 -- -- (37,185) (37,185)
----------- ----------- ----------- ----------- -----------
Balance, September 30, 2008 12,688,016 12,688 6,197,690 (6,308,223) (97,845)
Net loss 0 -- -- (28,158) (28,158)
----------- ----------- ----------- ----------- -----------
Balance, September 30, 2009 12,688,016 $ 12,688 $ 6,197,690 $(6,336,381) $ (126,003)
=========== =========== =========== =========== ===========
See accompanying notes to financial statements.
15
SOONER HOLDINGS, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2009
-------- --------
2008 2009
-------- --------
Cash Flows From Operating Activities
Net loss $(37,185) $(28,158)
Adjustments to reconcile net loss to net cash provided by
operating activities
Increase (decrease) in
Accounts payable 11,773 5,486
-------- --------
Net Cash Flows Used In Operating Activities (25,412) (22,672)
Cash Flows from Financing Activities
Loans from shareholder 20,300 29,939
-------- --------
Net Cash Provided by Financing Activities 20,300 29,939
Increase (Decrease) in Cash (5,112) 7,267
Cash at Beginning of Year 5,381 269
-------- --------
Cash at End of Year $ 269 $ 7,536
======== ========
See accompanying notes to financial statements.
16
SOONER HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2008 and 2009
NOTE A - ORGANIZATION AND OPERATIONS
Sooner Holdings, Inc. ("Sooner" or the "Company"), an Oklahoma corporation,
formerly conducted business through three of its wholly owned subsidiaries.
Charlie O Business Park Incorporated ("Business Park") which was liquidated into
Sooner on October 1, 2005 was engaged in the ownership and rental of a business
park in Oklahoma City, Oklahoma. ND Acquisition Corp. ("NDAC") which was sold on
September 30, 2005 operated minimum security correctional facilities. Sooner
Communications, Inc. ("Telecommunications") was liquidated into Sooner Holdings
on October 1, 2005. It was engaged in providing enhanced services to the
telecommunications industry. Currently, Sooner is inactive except for the
administrative costs associated with being a publicly traded entity. Management
is seeking new business opportunities.
NOTE B - CONTINUATION AS A GOING CONCERN
The accompanying financial statements have been prepared assuming that Sooner
Holdings, Inc. will continue as a going concern. Sooner Holdings, Inc. has
suffered losses from operations in recent years and continues to have a
significant shareholders' deficit. Subsequent to September 30, 2004, and as of
the date of this report, Sooner Holdings, Inc., has ceased all of the operations
described in Note A to the financial statements and is currently seeking to
acquire new business opportunities. As of September 30, 2009, the Company had a
deficit net worth of $(126,003) and no operating activities.
The Company's current business plan is to seek, investigate and, if warranted,
acquire one or more properties or businesses, and to pursue other related
activities intended to enhance shareholder value. The acquisition of a business
opportunity may be made by purchase, merger, exchange of stock, or otherwise,
and may encompass assets or a business entity, such as a corporation, joint
venture or partnership. Management intends to seek opportunities demonstrating
the potential of long-term growth as opposed to short-term earnings. Management
cannot predict to what extent the Company might incur further operating losses
through any business entity which may eventually be acquired. The financial
statements do not include any adjustment relating to the classification of
liabilities that might result should the Company be unable to continue as a
going concern.
NOTE C - SUMMARY OF ACCOUNTING POLICIES
A summary of the significant accounting policies consistently applied in the
preparation of the accompanying consolidated financial statements follows.
Cash and Cash Equivalents
-------------------------
The Company considers money market accounts and all highly liquid debt
instruments purchased with a maturity of three months or less to be cash
equivalents.
17
SOONER HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2008 and 2009
Income Taxes
------------
The Company provides for deferred income taxes on carryforwards and
temporary differences between the bases of assets and liabilities for
financial statement and tax reporting purposes. Additionally, the Company
provides a valuation allowance on deferred tax assets if, based on the
weight of available evidence, it is more likely than not that some
portion or all of the deferred tax assets will not be realized.
Loss Per Common Share
---------------------
Basic loss per share has been computed on the basis of weighted average
common shares outstanding during each period. Diluted loss per share is
the same as basic loss per share as the Company has no outstanding
dilutive potential common shares.
Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures;
accordingly, actual results could differ from those estimates.
Concentrations of Credit Risk
-----------------------------
The Company in the past maintained cash balances at several financial
institutions. On September 30, 2009, the company had only one checking
account at one financial institution. Accounts at each institution in
non-interest bearing accounts are insured by the Federal Deposit
Insurance Corporation. The company's only checking account is
non-interest bearing and is fully insured with no limitations on account
balances. The Federal Deposit Insurance Corporation will provide the full
coverage with no limits until December 31, 2009.
NOTE D - STOCKHOLDERS' EQUITY (DEFICIT)
Preferred Stock
---------------
The Company's authorized capital includes 10,000,000 shares of preferred stock,
undesignated as to par value. The Board of Directors of the Company, in its sole
discretion, may establish par value, divide the shares of preferred stock into
series and fix and determine the dividend rate, designations, preferences,
privileges and ratify the powers, if any, and determine the restrictions and
qualifications of each series of preferred stock as established. No shares of
preferred stock have been issued by the Company as of September 30, 2009.
Employee Stock Option Plan
--------------------------
The Company has a stock option plan ("1995 Plan") for directors, officers, key
employees, and consultants covering 2,000,000 shares of Company common stock.
Options granted under the 1995 Plan may be either "incentive stock options", as
defined in Section 422A of the Internal Revenue Code, or "nonqualified stock
options", subject to Section 83 of the Internal Revenue Code, at the discretion
18
SOONER HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2008 and 2009
of the Board of Directors and as reflected in the terms of the written option
agreement. The option price shall not be less than 100% (110% if the option is
granted to a stockholder who at the time the option is granted owns stock
representing more than 10% of the total combined voting power of all classes of
stock of the Company) of the fair market value of the optioned common stock on
the date the options are granted. Options become exercisable based on the
discretion of the Board of Directors but must be exercised within ten years of
the date of grant. On September 30, 2009 and 2008 there were no options
outstanding under the plan.
NOTE E - INCOME TAXES
A valuation allowance for deferred tax assets is required when it is more likely
than not that some portion or all of the deferred tax assets will not be
realized. The ultimate realization of this deferred tax asset depends on the
Company's ability to generate sufficient taxable income in the future.
Management believes it is more likely than not that the deferred tax asset will
not be realized by future operating results. The only deferred income tax asset
the company had at September 30, 2009 and 2008 was the tax effect of the net
operating loss carryforward of approximately $695,000 and $779,000,
respectively, which was subject to a 100% valuation allowance at September 30,
2009 and 2008, respectively.
At September 30, 2009, the Company has net operating loss carryforwards for
Expiration Loss
Date Carryforwards
9/30/2010 $357,632
9/30/2012 29,124
9/30/2018 279,949
9/30/2020 152,499
9/30/2021 173,815
9/30/2022 121,352
9/30/2023 25,044
9/30/2024 287,561
9/30/2025 206,563
9/30/2027 83,226
9/30/2028 37,185
9/30/2029 28,158
--------------
$1,782,108
==============
NOTE F - RELATED PARTY TRANSACTIONS
Related Party Obligations
-------------------------
As of September 30, 2009 and 2008, the company had loans outstanding from
shareholders of $90,367 and $60,428, respectively. These loans are unsecured and
are due on demand with an annual interest rate of 8%. As of September 30, 2009
and 2008, interest expense of $5,834 and $4,305, respectively, has been accrued
on these notes and is included in accounts payable.
19
SOONER HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2008 and 2009
NOTE G - COMMITMENTS AND CONTINGENCIES
The Company is not aware of any administrative proceedings, commitments or
contingencies involving Sooner Holdings, Inc.
NOTE H - SUBSEQUENT EVENTS
Management has evaluated subsequent events through December 29, 2009, the date
which the financial statements were issued. Through this date, Management
believes that there have not been any events that materially affect the
financial statements for the year ended September 30, 2009.
20
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
In late July 2008 Sooner Holdings, Inc. ("Sooner") was notified by
Murrell, Hall, McIntosh & Co., PLLP of Oklahoma City, Oklahoma ("Murrell,
Hall"), the principal independent registered public accountants of Sooner, that
Murrell, Hall was merging with a larger accounting firm and that it would no
longer perform the audit for Sooner. Murrell, Hall had been engaged as Sooner's
principal independent registered public accountants since February 3, 2003.
The reports of Murrell, Hall on the financial statements of Sooner for
its fiscal years ended September 30, 2006 and 2007 contained no adverse opinion
or disclaimer of opinion, and, other than raising substantial doubt about
Sooner's ability to continue as a going concern, were not otherwise qualified or
modified as to uncertainty, audit scope, or accounting principles during the
period of its engagement to July 31, 2008, the date of resignation.
During the past two years or interim periods prior to July 31, 2008,
there were no disagreements between Sooner and Murrell, Hall whether or not
resolved, on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure which, if not resolved to
the satisfaction of Murrell, Hall would have caused them to make reference to
the subject matter of the disagreements in their reports on the financial
statements.
Sooner provided Murrell, Hall with a copy of the disclosures it made in
its Form 8-K and requested Murrell, Hall to furnish a letter addressed to the
Commission stating whether it agreed with the statements made in the Form 8-K
and, if not, stating the respects in which it did not agree. Such a letter was
filed as an exhibit to the Form 8-K on November 18, 2008.
On November 24, 2008, the board of directors of Sooner Holdings, Inc.
("Sooner") engaged Smith, Carney & Co., p.c. of Oklahoma City, Oklahoma as
Sooner's principal independent registered public accountants to audit its
financial statements. The board of directors did not consult the new accountant
regarding the application of accounting principles to a specific completed or
contemplated transaction, or the type of audit opinion that might be rendered on
the issuer's financial statements.
Smith, Carney & Co., p.c. replaces Murrell, Hall, McIntosh & Co., PLLP
of Oklahoma City, Oklahoma ("Murrell, Hall"), the previous principal independent
registered public accountants of Sooner.
The resignation of Murrell, Hall was reported in a Form 8-K filed on
November 18, 2008. The appointment of Smith, Carney & Co., p.c. was reported in
a Form 8-K filed on December 1, 2008.
21
ITEM 9A(T) CONTROLS AND PROCEDURES.
Evaluation of disclosure controls and procedures. Our principal
executive and financial officers have evaluated the effectiveness of our
disclosure controls and procedures as of the end of our fiscal year 2009
(September 30, 2009), and have concluded that they are not effective to ensure
that information required to be disclosed in the reports that we file pursuant
to Section 15(d) of the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the rules under the Exchange Act.
We based the material weakness noted below in our assessment of our internal
control over financial reporting.
A material weakness is a deficiency, or combination of deficiencies, in
internal control over financial reporting, such that there is a reasonable
possibility that a material misstatement of the Company's annual or interim
financial statements will not be prevented or detected on a timely basis. In its
assessment of the effectiveness of internal control over financial reporting as
of September 30, 2009, the Company determined that we had a material weakness,
as described below and therefore our internal controls over financial reporting
were not effective.
We noted we have a material weakness regarding proper review and
recording of transactions for the preparation of our financial statements. As of
September 30, 2009, there was a transaction recorded as an expense that should
have been recorded as a reduction to an accounts payable for an item paid on
behalf of a shareholder. We plan to remedy the material weakness with better
review of transactions and financial statement presentation on an ongoing basis.
There have been no changes in our internal control over financial
reporting during the fourth quarter of our most recently ended fiscal year 2009
that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
22
ITEM 9B. OTHER INFORMATION.
There is no information that was required to be disclosed on Form 8-K
during the fourth quarter of FY 2009 that was not reported.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Set forth below are the names, and terms of office of each of the
directors, executive officers and significant employees of Sooner Holdings, Inc.
at September 30, 2009 and a description of the business experience of each. R.C.
Cunningham III is the son of R.C. Cunningham II, the president and chairman.
-------------------------- ------------------------- -------------- ------------
Office Held Term of
Person Offices Since Office
-------------------------- ------------------------- -------------- ------------
R.C. Cunningham II Director 1989 2011
-------------------------- ------------------------- -------------- ------------
CEO and President 1988 2011
-------------------------- ------------------------- -------------- ------------
R.C. Cunningham III Director 1997 2011
-------------------------- ------------------------- -------------- ------------
Secretary 1997 2011
-------------------------- ------------------------- -------------- ------------
CFO 1998 2011
-------------------------- ------------------------- -------------- ------------
Vice President 2000 2011
-------------------------- ------------------------- -------------- ------------
Business Experience:
R.C. Cunningham II. Mr. Cunningham has been our chairman of the board
and president since June 1988. From 1965 to 1986, Mr. Cunningham was in the
construction business as CEO and owner of Rayco Construction Company. Mr.
Cunningham continues to serve as president of Midwest Property Management and
Service Co., Inc., a company involved in real estate property management.
R.C. Cunningham III. Mr. Cunningham has been the secretary and a
director of Sooner Holdings, Inc. since July 1997 and the treasurer since March
1998. From May 1988 to June 2000, Mr. Cunningham was continuously employed as a
mortgage banker with various lending institutions. In June of 2000 he joined
Sooner Holdings full time as vice president. Mr. Cunningham has a BA Degree in
real estate finance from the University of Oklahoma.
It is possible that, after the company successfully consummates a
merger or acquisition with an unaffiliated entity, that entity may desire to
employ or retain one or a number of members of the company's management for the
purposes of providing services to the surviving entity, or otherwise provide
23
other compensation to such persons. However, the company has adopted a policy
whereby the offer of any post-transaction remuneration to members of management
will not be a consideration in the company's decision to undertake any proposed
transaction. Each member of management has agreed to disclose to the company's
board of directors any discussions concerning possible compensation to be paid
to them by any entity, which proposes to undertake a transaction with the
company and further, to abstain from voting on such transaction. Therefore, as a
practical matter, if each member of the company's board of directors were
offered compensation in any form from any prospective merger or acquisition
candidate, the proposed transaction would not be approved by the company's board
of directors as a result of the inability of the board to affirmatively approve
such a transaction.
It is possible that persons associated with management may refer a
prospective merger or acquisition candidate to the company. In the event the
company consummates a transaction with any entity referred by associates of
management, it is possible that such an associate will be compensated for his
referral in the form of a finder's fee. It is anticipated that this fee will be
either in the form of restricted common stock issued by the company as part of
the terms of the proposed transaction, or will be in the form of cash
consideration. However, if such compensation is in the form of cash, such
payment will be tendered by the acquisition or merger candidate, because the
company has insufficient cash available. The amount of such finder's fee cannot
be determined as of the date of filing this report, but is expected to be
comparable to consideration normally paid in like transactions. No member of
management of the company will receive any finders' fee, either directly or
indirectly, as a result of their respective efforts to implement the company's
business plan outlined herein.
The company has adopted a policy that its affiliates and management
shall not be issued further common shares of the company, except in the event
discussed in the preceding paragraphs.
While all of the companies' officers, directors and insider
shareholders have been involved in transactions involving "shell" corporations
which are blank check or blind pool companies, none of them has been previously
involved in establishing a blank check or blind pool company offering to be used
in a shell transaction. A "blank check" company is a company that is formed
without a specified business as its purpose. A "blind pool" company is a company
that has raised money through a public or private offering for use to acquire an
unspecified, undesignated business or company. Our company was not formed either
as a "blank check" or a "blind pool" company. It was formed to be an operating
company and operated several businesses for several years until the State of
Oklahoma acquired all our real property in condemnation proceedings.
New SEC regulations, which took effect November 2005, imposed
additional burdens on shell companies that are parties to reverse mergers. Such
companies are now required to file with the SEC, within four business days of
executing a reverse merger contract, the audited and interim financial
statements of the company to be acquired and the other information about such
company that would be required to be in a Form 10 or 10-SB. Prior to these new
regulations, the filing of such financial information could be delayed until 60
24
days after the reverse merger is actually effected, and the other information
that would be in a Form 10 or 10-SB was not explicitly required in the Form 8-K
that is filed to report the transaction. These new filing requirements are
expected to inhibit or even prevent the accomplishment of most proposed reverse
mergers.
Conflicts of Interest
---------------------
The officers and directors of the company will not devote more than a
portion of their time to the affairs of the company. There will be occasions
when the time requirements of the company's business conflict with the demands
of their other business and investment activities. Such conflicts may require
that the company attempt to employ additional personnel. There is no assurance
that the services of such persons will be available or that they can be obtained
upon terms favorable to the company.
The officers and directors of the company may be directors or principal
shareholders of other companies and, therefore, could face conflicts of interest
with respect to potential acquisitions. In addition, officers and directors of
the company may in the future participate in business ventures, which could be
deemed to compete directly with the company. Additional conflicts of interest
and non-arms length transactions may also arise in the future in the event the
company's officers or directors are involved in the management of any firm with
which the company transacts business. The company's board of directors has
adopted a policy that the Company will not seek a merger with, or acquisition
of, any entity in which management serve as officers or directors, or in which
they or their family members own or hold a controlling ownership interest.
Although the board of directors could elect to change this policy, the board of
directors has no present intention to do so. In addition, if the company and
other companies with which the company's officers and directors are affiliated
both desire to take advantage of a potential business opportunity, then the
board of directors has agreed that said opportunity should be available to each
such company in the order in which such companies registered or became current
in the filing of annual reports under the '34 Act.
The company's officers and directors may actively negotiate or
otherwise consent to the purchase of a portion of their common stock as a
condition to, or in connection with, a proposed merger or acquisition
transaction. It is anticipated that a substantial premium over the initial cost
of such shares may be paid by the purchaser in conjunction with any sale of
shares by the company's officers and directors which is made as a condition to,
or in connection with, a proposed merger or acquisition transaction. The fact
that a substantial premium may be paid to the company's officers and directors
to acquire their shares creates a potential conflict of interest for them in
satisfying their fiduciary duties to the company and its other shareholders.
Even though such a sale could result in a substantial profit to them, they would
be legally required to make the decision based upon the best interests of the
company and the company's other shareholders, rather than their own personal
pecuniary benefit.
No executive officer, director, person nominated to become a director,
promoter or control person of our company has been involved in legal proceedings
during the last five years such as
25
o bankruptcy,
o criminal proceedings (excluding traffic violations and other minor
offenses), or
o proceedings permanently or temporarily enjoining, barring, suspending
or otherwise limiting his involvement in any type of business,
securities or banking activities.
o Nor has any such person been found by a court of competent
jurisdiction in a civil action, or the Securities and Exchange
Commission or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities law.
None of the directors holds any directorships in any company with a
class of securities registered under the Exchange Act or subject to the
reporting requirements of section 15(d) of such Act or any company registered as
an investment company under the Investment Company Act of 1940.
Involvement in certain legal proceedings. During the past five years,
none of the directors has been involved in any of the following events:
o A petition under the Federal bankruptcy law or any state insolvency
law was filed by or against, or a receiver, fiscal agent or similar
officer was appointed by a court for the business or property of such
person, or any partnership in which he was a general partner at or
within two years before the time of such filing, or any corporation or
business association of which he was an executive officer at or within
two years before the time of such filing;
o Such person was convicted in a criminal proceeding or is a named
subject of a pending criminal proceeding (excluding traffic violations
and other minor offenses);
o Such person was the subject of any order, judgment, or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining him from, or
otherwise limiting, the following activities:
o Acting as a futures commission merchant, introducing broker, commodity
trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated by the Commodity
Futures Trading Commission, or an associated person of any of the
foregoing, or as an investment adviser, underwriter, broker or dealer
in securities, or as an affiliated person, director or employee of any
investment company, bank, savings and loan association or insurance
company, or engaging in or continuing any conduct or practice in
connection with such activity;
o Engaging in any type of business practice; or
26
o Engaging in any activity in connection with the purchase or sale of
any security or commodity or in connection with any violation of
Federal or State securities laws or Federal commodities laws;
o Such person was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any Federal or State
authority barring, suspending or otherwise limiting for more than 60
days the right of such person to engage in any activity described in
paragraph (f)(3)(i) of this section, or to be associated with persons
engaged in any such activity; or
o Such person was found by a court of competent jurisdiction in a civil
action or by the Commission to have violated any Federal or State
securities law, and the judgment in such civil action or finding by
the Commission has not been subsequently reversed, suspended, or
vacated.
o Such person was found by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to have violated
any Federal commodities law, and the judgment in such civil action or
finding by the Commodity Future Trading Commission has not been
subsequently reversed, suspended or vacated.
Code of Ethics. We have adopted a Code of Ethics that applies to our
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions. A copy of the
Code of Ethics is filed as an exhibit to Form 10-QSB Quarterly Report for the
period ended December 31, 2002 (Exhibit 14 incorporated herein by reference). We
undertake to provide to any person without charge, upon request, a copy of such
code of ethics. Such a request may be made by writing to the company at its
address at 127 Northwest 62nd Street, Suite A, Oklahoma City, OK 73118.
Corporate Governance.
---------------------
Security holder recommendations of candidates for the board of
directors. Any shareholder may recommend candidates for the board of directors
by writing to the president of our company the name or names of candidates,
their home and business addresses and telephone numbers, their ages, and their
business experience during at least the last five years. The recommendation must
be received by the company by March 9 of any year or, alternatively, at least 60
days before any announced shareholder annual meeting.
Audit committee. We have no standing audit committee. Our directors
perform the functions of an audit committee. Our limited operations make
unnecessary a standing audit committee, particularly in view of the fact that we
have only three directors at present. None of our directors is an audit
committee financial expert, but the directors have access to consultants that
can provide such expertise when such is needed.
27
Compliance with Section 16(a) of the Securities Exchange Act.
-------------------------------------------------------------
Based solely upon a review of Forms 3 and 4 furnished to the company
under Rule 16a-3(e) of the Securities Exchange Act during its most recent fiscal
year and Forms 5 furnished to the company with respect to its most recent fiscal
year and any written representations received by the company from persons
required to file such forms, the following persons - either officers, directors
or beneficial owners of more than ten percent of any class of equity of the
company registered pursuant to Section 12 of the Securities Exchange Act -
failed to file on a timely basis reports required by Section 16(a) of the
Securities Exchange Act during the most recent fiscal year or prior fiscal
years:
No. of Failures
No. of Transactions to File a
Name No. of Late Reports Not Timely Reported Required Report
---- ------------------- ------------------- ---------------
None 0 0 0
ITEM 11. EXECUTIVE COMPENSATION.
The following information concerns the compensation of the named
executive officers for each of the last two completed fiscal years:
SUMMARY COMPENSATION TABLE
----------------------------- ------ -------- ------ --------- --------
Name and Principal Position Year Salary Bonus Common Total
Stock
Awards
----------------------------- ------ -------- ------ --------- --------
R.C. Cunningham, II, CEO 2009 0 0 0 0
----------------------------- ------ -------- ------ --------- --------
2008 0 0 0 0
----------------------------- ------ -------- ------ --------- --------
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following information concerns unexercised stock options, stock
that has not vested, and equity incentive plan awards for each named officer
outstanding at the end of the last fiscal year:
28
----------------- ----------------------------------------------------------- ----------------------------------------
Option Awards Stock Awards
----------------- ----------------------------------------------------------- ----------------------------------------
Name Number of Number of Equity Option Option Number Market Equity Equity
Securities Securities Incentive Exercise Expiration of Shares Value Incentive Incentive
Underlying Underlying Plan Price Date or Units of Plan Plan
Unexercised Unexercised Awards: ($) of Stock Shares Awards: Awards:
Options (#) Options (#) Number of That or Number Market
Exercisable Unexercisable Securities Have Not Units of or
Underlying Vested of Unearned Payout
Unexercised (#) Stock Shares, Value of
Unearned That Units or Unearned
Options (#) Have Other Shares,
Not Rights Units or
Vested That Other
($) Have Not Rights
Vested That
(#) Have Not
Vested
($)
----------------- ------------ ------------- ------------ -------- ---------- ---------- -------- ---------- ---------
R.C. Cunningham, 0 0 0 0 0 0 0 0 0
II, CEO
----------------- ------------ ------------- ------------ -------- ---------- ---------- -------- ---------- ---------
Compensation of Directors
-------------------------
The directors of Sooner Holdings, Inc. received the following
compensation in FY 2009 for their services as directors.
DIRECTOR COMPENSATION
----------------------- ---------- ---------- ---------- -------------- -------------- ------------ --------
Name Fees Stock Option Non-Equity Nonqualified All Other Total
Earned Awards Awards Incentive Deferred Compensa- ($)
or Paid ($) ($) Plan Compensation tion ($)
in Cash Compensa- Earnings ($)
($) tion ($)
----------------------- ---------- ---------- ---------- -------------- -------------- ------------ --------
R.C. Cunningham, II 0 0 0 0 0 0 0
----------------------- ---------- ---------- ---------- -------------- -------------- ------------ --------
R.C. Cunningham, III 0 0 0 0 0 0 0
----------------------- ---------- ---------- ---------- -------------- -------------- ------------ --------
Equity Compensation Plans.
--------------------------
We have no equity compensation plans.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
The following table shows information as of December 28, 2009 with
respect to each beneficial owner of more than five percent of our only voting
stock and to each of the officers and directors of our company and as a group:
29
No. of Shares % of Class
R.C. Cunningham II (1)(2)
1440 Glenbrook Drive
Oklahoma City, OK 73118 9,353,910 74.00
Marilyn C. Kenan, Trustee
Marilyn C. Kenan Trust
212 N.W. 18th Street
Oklahoma City, OK 73103 1,147,778 9.00
R.C. Cunningham III (2)
3134 Rockridge Place
Oklahoma City, OK 73120 72,129 *
All officers and directors as a group
(2 persons) 9,426,039 74.29
--------------------
* Less than 1%
Unless otherwise indicated, to our knowledge, each person or
group possesses sole voting and sole investment power with respect to
the shares shown opposite the name of such person or group. Shares not
outstanding, but deemed beneficially owned by virtue of the right of a
person or member of a group to acquire them within 60 days, are treated
as outstanding only when determining the amount and percent owned by
such person or group.
(1) The number of shares and percent are based on the current
number of shares of common stock outstanding of 12,688,016
shares less 3,000,000 shares returned to the company for
cancellation but not yet cancelled.
(2) An officer and director of Sooner Holdings, Inc.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.
We have adopted a policy that any transactions with directors, officers
or entities of which they are also officers or directors or in which they have a
financial interest, will only be on terms consistent with industry standards and
approved by a majority of the disinterested directors of the Board and based
upon a determination that these transactions are on terms no less favorable to
us than those which could be obtained by unaffiliated third parties. This policy
could be terminated in the future. In addition, interested directors may be
counted in determining the presence of a quorum at a meeting of the Board or a
committee thereof which approves such a transaction.
30
There have been no transactions during the last two years, or proposed
transactions, to which we were or are to be a party in which any of the
following persons had or is to have a direct or indirect material interest:
o the officers and directors;
o any nominees for election as a director;
o any beneficial owners of more than 5 percent of our voting securities;
o any member of the immediate family of any of the above persons.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Audit Fees. Our principal independent accountant billed us, for each of
the last two fiscal years, the following aggregate fees for its professional
services rendered for the audit of our annual financial statements and review of
financial statements included in our Form 10-Q reports or other services
normally provided in connection with statutory and regulatory filings or
engagements for those two fiscal years:
Fiscal Year ended September 30, 2009 $15,800
Fiscal Year ended September 30, 2008 $10,261
Audit-Related Fees. Our principal independent accountant billed us, for
each of the last two fiscal years, the following aggregate fees for assurance
and related services reasonably related to the performance of the audit or
review of our financial statements and not reported above under "Audit Fees":
Fiscal Year ended September 30, 2009 $ -0-
Fiscal Year ended September 30, 2008 $ -0-
Tax Fees. Our principal independent accountant billed us, for each of
the last two fiscal years, the following aggregate fees for professional
services rendered for tax compliance, tax advice and tax planning:
Fiscal Year ended September 30, 2009 $ -0-
Fiscal Year ended September 30, 2008 $ -0-
All Other Fees. Our principal independent accountant billed us, for
each of the last two fiscal years, the following aggregate fees for products and
services provided by it, other than the services reported in the above three
categories:
Fiscal Year ended September 30, 2009 $ -0-
Fiscal Year ended September 30, 2008 $ -0-
31
Pre-Approval of Audit and Non-Audit Services. The Audit Committee
charter requires that the committee, or the directors if there be no committee,
pre-approve all audit, review and attest services and non-audit services before
such services are engaged.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
The following exhibits are filed as part of this Form 10-K:
Page no.
Item No. Description (footnote)
-------- ----------- ----------
3.1 thru 3.3 Articles of Incorporation, By-Laws and Amendments thereto (1)
10 Agreement for Change of Control of Sooner Holdings, Inc. (4)
executed on July 23, 2008 and recited to be effective
on July 17, 2008
14 Code of Ethics for CEO and Senior Financial Officers (2)
16 Letter of November 13, 2008 of Murrell, Hall, McIntosh & (3)
Co., PLLP of Oklahoma City, Oklahoma, the principal
independent registered public accountants of agreeing
with the statements made in this Form 8-K by Sooner
Holdings, Inc. concerning Sooner's change of principal
independent accountants.
20.1 Audit Committee Charter (2)
20.2 Compensation Committee Charter (2)
20.3 Governance and Nominating Committee Charter (2)
20.4 Corporate Governance Principles (2)
31.1 Certification of Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
32.2 Certification of Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
Footnotes:
----------
(1) Incorporated by reference to our Form 10-KSB for the year ended December 31,
1995 (file no. 0-18344).
(2) Filed as an Exhibit to our Form 10-QSB 12-31-02 (file no. 0-18344).
32
(3) Previously filed by Sooner Holdings, Inc. on November 18, 2008, Commission
File No. 000-18344; incorporated herein by reference.
(4) Previously filed by Sooner Holdings, Inc. on July 28, 2008, Commission File
No. 000-18344; incorporated herein by reference.
33
SIGNATURES
Pursuant to the requirements of Section 15(d) 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: December 29, 2009 SOONER HOLDINGS, INC.
/s/ R.C. Cunningham II
By
---------------------------------
R.C. Cunningham II, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
/s/ R.C. Cunningham II
Date: December 29, 2009
------------------------------------------
R.C. Cunningham II, Chairman of the Board,
Chief Executive Officer, President
and Director
/s/ R.C. Cunningham III
Date: December 29, 2009
------------------------------------------
R.C. Cunningham III, Secretary, Chief
Financial Officer and Director
34
SOONER HOLDINGS, INC.
Commission File No. 0-18344
EXHIBIT INDEX
Form 10-K
For the Fiscal Year Ended 09-30-09
The following exhibits are filed, by incorporation by
reference, as part of this Form 10-K:
Page no.
Item No. Description (footnote)
-------- ----------- ----------
3.1 thru 3.3 Articles of Incorporation, By-Laws and Amendments thereto (1)
10 Agreement for Change of Control of Sooner Holdings, Inc. (4)
executed on July 23, 2008 and recited to be effective
on July 17, 2008
14 Code of Ethics for CEO and Senior Financial Officers (2)
16 Letter of November 13, 2008 of Murrell, Hall, McIntosh & (3)
Co., PLLP of Oklahoma City, Oklahoma, the principal
independent registered public accountants of agreeing
with the statements made in this Form 8-K by Sooner
Holdings, Inc. concerning Sooner's change of principal
independent accountants.
20.1 Audit Committee Charter (2)
20.2 Compensation Committee Charter (2)
20.3 Governance and Nominating Committee Charter (2)
20.4 Corporate Governance Principles (2)
31.1 Certification of Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
32.2 Certification of Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
1
Footnotes:
----------
(1) Incorporated by reference to our Form 10-KSB for the year ended December 31,
1995 (file no. 0-18344).
(2) Filed as an Exhibit to our Form 10-QSB 12-31-02 (file no. 0-18344).
(3) Previously filed by Sooner Holdings, Inc. on November 18, 2008, Commission
File No. 000-18344; incorporated herein by reference.
(4) Previously filed by Sooner Holdings, Inc. on July 28, 2008, Commission File
No. 000-18344; incorporated herein by reference.
2
