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Sooner Holdings Inc/OK · 10QSB · For 12/31/01

Filed On 2/14/02 · SEC File 0-18344 · Accession Number 1060830-2-24

  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 2/14/02  Sooner Holdings Inc/OK            10QSB      12/31/01    1:16                                     Gray & Northcutt Inc/FA

Quarterly Report -- Small Business · Form 10-QSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10QSB       Quarterly Report -- Small Business                    16     79K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) Changes in Securities Defaults Upon Senior Securities Exhibits and Reports on Form 8-K Financial Statements Legal Proceedings Management's Discussion and Analysis or Plan of Operation Other Information Submission of Matters to a Vote of Security Holders
1	1st Page
2	Item 1. Financial Statements
9	Item 2. Management's Discussion and Analysis or Plan of Operation
15	Item 1. Legal Proceedings
"	Item 2. Changes in Securities
"	Item 3. Defaults Upon Senior Securities
"	Item 4. Submission of Matters to a Vote of Security Holders
"	Item 5. Other Information
"	Item 6. Exhibits and Reports on Form 8-K

10QSB 1st Page of 16 TOC Top Previous Next Bottom Just 1st
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FORM 10-QSB 

U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

(Mark one)
 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2001

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to _________ 

Commission  File  Number:     0-18344                                           
-------             

 SOONER HOLDINGS, INC.
 ---------------------
 (Exact name of small business issuer as specified in its charter)

       Oklahoma                                             73-1275261
-------------------------------                              -------------------
(State or other jurisdiction of                                (IRS Employer    
 incorporation or organization)                              Identification No.)

 2534 W. I-40, Oklahoma City, OK 73108
----------------------------------------
(Address of principal executive offices)

Issuer's telephone number, including area code:                   (405) 236-8332
                                                                  --------------

     Check  whether  the  issuer  (1)  filed all reports required to be filed by
Section  13  or 15(d) of the Exchange Act during the past 12 months (or for such
shorter  period  that the registrant was required to file such reports), and (2)
has   been  subject  to  such   filing  requirements   for  the  past  90  days.
YES [X]   NO [ ]                                                                

 APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS 

     Check whether the registrant filed all documents and reports required to be
filed  by  Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities  under  a  plan  confirmed  by  court.   YES [ ]   NO [ ]            

APPLICABLE ONLY TO CORPORATE ISSUERS

     Indicate  the  number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 13,888,016 shares of common
stock  as  of  February  1,  2002.                                              

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 PART I. FINANCIAL INFORMATION

Item  1.  Financial  Statements                                                 

 SOONER HOLDINGS, INC.
Consolidated Balance Sheet
(unaudited) 
 December 31, 2001

                                                                [Download Table]

                                                                    December 31,
                                                                        2001    
                                                                    ------------
                                     ASSETS                                     

Current  assets:                                                                
                                                                                
  Cash and cash equivalents                                         $    27,691 
  Restricted Cash                                                             - 
  Accounts receivable - net                                             240,211 
  Other current assets                                                   92,533 
                                                                    ----------- 
        Total current assets                                            360,435 

Property and equipment, net                                           3,975,611 
Intangible assets, net of accumulated amortization of $892,233        1,249,655 
Other assets, net                                                       403,592 
                                                                    ----------- 

                                                                    $ 5,989,293 
                                                                    =========== 

                      LIABILITIES AND SHAREHOLDERS' DEFICIT                     

Current  liabilities:                                                           
  Accounts payable                                                  $   199,235 
  Accrued liabilities                                                   409,852 
  Current portion of notes payable and royalty payable                1,751,388 
  Deferred revenue                                                       24,900 
                                                                    ----------- 
        Total current liabilities                                     2,385,375 

Notes payable, less current portion and net of discount                         
  of $57,346                                                          5,040,327 

Royalty payable, less current portion of $ 22,993                        84,377 
                                                                    ----------- 
        Total Liabilities                                             7,510,079 
                                                                    ----------- 

Shareholders'  deficit:                                                         
  Preferred stock; undesignated, 10,000,000 shares  authorized,                 
    no  shares  issued  and  outstanding                                      - 
  Common stock; $.001 par value, 100,000,000 shares authorized,                 
    13,888,016  shares  issued  and  outstanding,                        13,888 
  Additional paid-in-capital                                          6,268,490 
  Accumulated deficit                                                (7,731,164)
  Related party receivables from stock purchases                        (72,000)
                                                                    ----------- 
        Total Shareholders' deficit                                  (1,520,786)
                                                                    ------------

                                                                    $ 5,989,293 
                                                                    =========== 

The accompanying notes are an integral part of these consolidated financial 
statements. 

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 SOONER HOLDINGS, INC.
 Consolidated Statements of Operations
(unaudited) 

                                                                [Download Table]

                                                    For the three months ended  
                                                           December 31,         
                                                     2001               2000    
                                                 -----------        ----------- 
Revenues:                                                                       
                                                                                
  Commercial Leasing                             $   110,151        $   104,748 
  Correctional Facility Services                     555,313            509,855 
                                                 -----------        ----------- 
        Total revenues                               665,464            614,603 
                                                 -----------        ----------- 
Operating  Expenses:                                                            
  Cost of Correctional Facility Services             322,932            198,948 
  Cost of Commercial Leasing                          27,572             25,110 
  General and administrative                         250,719            336,721 
  Depreciation and amortization                      113,175            109,576 
                                                 -----------        ----------- 
        Total operating expenses                     714,398            670,355 
                                                 -----------        ----------- 

Income from operations                               (48,934)           (55,752)

Interest expense                                    (169,707)          (155,017)
Other income (expense)                                 6,366              2,954 
                                                 -----------        ----------- 

Net (Loss) Income                                $  (212,275)       $  (207,815)
                                                 ===========        =========== 

Basic and diluted loss per common share          $     (0.02)       $     (0.01)
                                                 ===========        =========== 

Weighted average common shares outstanding        13,888,016         16,888,016 
                                                 ===========        =========== 

The accompanying notes are an integral part of these consolidated financial 
statements. 

 3

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 SOONER HOLDINGS, INC.
 Consolidated Statements of Cash Flows
(unaudited) 

                                                                [Download Table]

                                                    For the three months ended  
                                                           December 31,         
                                                     2001               2000    
                                                 -----------        ----------- 
Cash  flows  from  operating  activities:                                       
                                                                                
  Net loss                                       $  (212,275)       $  (207,815)
  Adjustments to reconcile net loss to net                                      
    cash provided by (used) in operating                                        
    activities:                                                                 
      Accretion of interest                                -             34,408 
      Depreciation and amortization                  113,175            109,576 
      Loss on disposal of property                       239                  - 
      Changes  in  assets  and  liabilities:                                    
         Accounts receivable                          33,079            (25,421)
         Other current assets and other assets       (47,262)           (25,229)
         Accounts payable                            102,628             24,245 
         Accrued liabilities                          52,308             55,551 
         Deferred revenue                              4,150              2,000 
                                                 -----------        ----------- 
    Net cash provided by (used in) operating                                    
      activities                                      46,042            (32,685)
                                                 -----------        ----------- 

Cash  flows  from  investing  activities:                                       
  Proceeds from sale of property                         500                  - 
  Increase (Decrease) in restricted cash               2,553              3,246 
  Purchases of property and equipment                (10,129)           (20,940)
                                                 -----------        ----------- 
    Net cash used in investing activities             (7,076)           (17,694)
                                                 -----------        ----------- 

Cash  flows  from  financing  activities:                                       
  Repayments of long term debt and royalty           (35,523)           (27,329)
  Net borrowings on line of credit                     9,600             17,534 
                                                 -----------        ----------- 
    Net cash used in financing activities            (25,923)            (9,795)
                                                 -----------        ----------- 

Net increase (decrease) in cash                       13,043            (60,174)
Cash at beginning of period                           14,648            175,827 
                                                 -----------        ----------- 

Cash at end of period                            $    27,691        $   115,653 
                                                 ===========        =========== 

Supplemental disclosure of cash flow information:                               
  Cash paid during the period for interest       $    99,171        $    94,513 
                                                 ===========        =========== 

The accompanying notes are an integral part of these consolidated financial 
statements. 

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 SOONER HOLDINGS, INC.
Notes to Consolidated Financial Statements
(Unaudited) 

 December 31, 2001

NOTE  1  -  ORGANIZATION  AND  SIGNIFICANT  ACCOUNTING  POLICIES                

Organization  and  operations                                                   
-----------------------------                                                   

     Sooner  Holdings, Inc., an Oklahoma corporation, operates primarily through
three  of  its  subsidiaries.  New  Directions Acquisition Corp. (NDAC) owns and
operates two minimum security correctional facilities in Oklahoma City, Oklahoma
and  Charlie  O  Business  Park  Incorporated  (Business Park) is engaged in the
ownership  and  rental  of  a  business  park in Oklahoma City, Oklahoma. Sooner
Communications,  Inc.  (Communications) supplies hardware and software solutions
to  independent  telecommunications  providers.                                 

Basis  of  presentation                                                         
-----------------------                                                         

     The  unaudited consolidated financial statements presented herein have been
prepared by us, without audit, pursuant to the rules and regulations for interim
financial  information  and  the instructions to Form 10-QSB and Regulation S-B.
Accordingly,  certain  information and footnote disclosures normally included in
financial  statements  prepared in accordance with generally accepted accounting
principals  have been omitted. These unaudited consolidated financial statements
should  be  read  in conjunction with the financial statements and notes thereto
included in our Annual Report on Form 10-KSB for the fiscal year ended September
30,  2001  (the "2001 Form 10-KSB"). In the opinion of management, the unaudited
consolidated  financial statements reflect all adjustments (consisting of normal
recurring  accruals only) which are necessary to present fairly our consolidated
financial position, results of operations, and cash flows. Operating results for
interim  periods  are  not  necessarily  indicative  of the results which may be
expected  for  the  entire  year.                                               

Management  plans                                                               
-----------------                                                               

     For  the  fiscal  year ending September 30, 2001, the independent auditor's
report  included  an  explanatory paragraph calling attention to a going concern
issue.  The  accompanying  consolidated  financial statements have been prepared
contemplating  our  continuation as a going concern.  We have suffered recurring
losses  from  operations,  have a shareholders' deficit of $1,520,786 and have a
working  capital  deficiency  of  $2,024,940  at  December 31, 2001.  In view of
these  matters,  realization  of a major portion of our assets is dependent upon
our  ability  to  meet  our financing requirements and the success of our future
operations.  We  believe  that  our  plans to revise our operating and financial
requirements,  as  described  more fully in the 2001 Form 10-KSB, provide us the
opportunity  to continue as a going concern.  However, there can be no assurance
that  these  plans  will  be  successful.                                       

Principles  of  consolidation                                                   
-----------------------------                                                   

     The  accompanying  consolidated  financial statements have been prepared on
the  basis  of generally accepted accounting principles and include the accounts
of  Sooner  Holdings, Inc. and all majority owned subsidiaries.  All significant
intercompany  transactions  have  been  eliminated.                             

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New  Accounting  Pronouncement                                                  
------------------------------                                                  

     On  July 20, 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") 141, Business Combinations,
and  SFAS  142,  Goodwill  and Intangible Assets.  SFAS 141 is effective for all
business  combinations completed after June 30, 2001.  SFAS 142 is effective for
fiscal  years  beginning after December 15, 2001; however, certain provisions of
this  Statement  apply  to goodwill and other intangible assets acquired between
July  1,  2001  and  the  effective date of SFAS 142.  Major provisions of these
Statements  and  their  effective  dates  for  the  Company  are  as  follows:  

-    all   business  combinations  initiated  after  June  30, 2001 must use the
     purchase method of accounting. The pooling of interest method of accounting
     is prohibited except  for  transactions  initiated  before  July  1,  2001.
-    intangible  assets  acquired  in  a  business combination  must be recorded
     separately  from  good-will  if they arise  from contractual or other legal
     rights  or  are  separable  from  the  acquired  entity  and  can  be sold,
     transferred, licensed,  rented  or  exchanged,  either  individually  or as
part of a related contract,  asset  or  liability.                    
-    goodwill,  as  well  as  intangible assets  with indefinite lives, acquired
     after June 30, 2001, will not be amortized.  Effective October 1, 2001, all
     previously  recognized goodwill and intangible assets with indefinite lives
will no  longer  be  subject  to  amortization.                       
-    effective  October 1, 2001,  goodwill and intangible assets with indefinite
     lives will  be tested  for impairment  annually  and  whenever there  is an
impairment indicator.                                                 
-    all  acquired goodwill  must be assigned to reporting units for purposes of
impairment  testing  and  segment  reporting.                         

     Although  it  is  still  reviewing  the  provisions  of  these  Statements,
management's  preliminary  assessment  is  that these Statements will not have a
material  impact  on  the Company's financial position or results of operations.

Reclassifications                                                               
-----------------                                                               

     Certain  reclassifications have been made to the fiscal year 2001 financial
statements  to  conform  to  the  2002  presentation.                           

NOTE  2  -  Property  and  Equipment                                            

     Property  and  equipment  as  of  December  31,  2001  is  comprised of the
following:                                                                      

                                                                [Download Table]

                                                                             
Land                                                              $ 1,513,400
Buildings and improvements                                          3,065,798
Machinery and equipment                                               212,983
Vehicles                                                               80,968
                                                                  -----------
                                                                    4,873,149
Less accumulated depreciation                                         897,538
                                                                  -----------

  Property and equipment, net                                     $ 3,975,611
                                                                  ===========

NOTE  3  -  OTHER  ASSETS                                                       

    Other  assets  at  December  31,  2001  is  comprised  of  the  following:

                                                                [Download Table]

                                                                             
Loan commitment fee, less amortization of $10,485                 $   104,592
Certificates of deposit                                               299,000
                                                                  -----------
  Other assets, net                                               $   403,592
                                                                  ===========

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NOTE  4  -  NOTES  PAYABLE                                                      

    Notes  payable  as  of  December  31,  2001  consists  of  the  following:

                                                                [Download Table]

Installment note payable, interest at 8.8%, due                                
                                                                               
  August 1, 2009; collateralized by first mortgage on real estate   $ 2,463,701

Notes  payable to related parties, interest at                                 
  10% per annum, due after December 31, 2002.                                  
  Subordinate to first mortgage on correctional facility.             1,039,944

Revolving  line  of  credit  from  Bank, interest                              
  at prime plus 3.25%, currently 7.5%,  matures.                               
  May  5,  2005, collateralized by accounts receivable.                  14,668

Note  payable to bank, interest at 8.5%, principal                             
  and interest due November 28, 2002;  collateralized                          
  by  first  mortgage  on  real  estate.                                737,017

Note  payable to bank, interest payable monthly at                             
  prime plus 1% (effective rate of  5.25%  at                                  
  December 31, 2001), due August 12, 2002;                                     
  collateralized by second mortgage  on  real  estate.                  417,394

Installment  note  payable  to  corporation,                                   
  interest  at  8%; due May 8, 2016; collateralized  by                        
  first  mortgage  on  land  and  building.                             983,356

Balloon  promissory  note  payable  to  related  party                         
  (see Note 6), 10% stated interest  per  annum.                               
  Due  after  September  30,  2003.                                     629,200

Note  payable  to  bank,  interest  at  New  York                              
  prime plus 2%, currently 6.5%, collateralized  by a                          
  first mortgage on land and facility owned by us.                             
  Due April 20,  2002.                                                  483,442
                                                                    -----------
                                                                      6,768,722
Less current portion                                                  1,728,395
                                                                    -----------
    Notes payable                                                   $ 5,040,327
                                                                    ===========

NOTE  5  -  ROYALTY  PAYABLE                                                    

     As  a part of a business acquisition, the Company assumed a royalty payable
to  an  individual.  The  agreement  required monthly payments of the greater of
$6,000  or  6%  of  the  total  gross monthly income of NDAC through April 2017.
Future  minimum  payments under this agreement were $1,200,000 and a discount of
$934,260  was  imputed  at  the  date  of  purchase.                            

     Effective September 24, 2001, the Company modified this agreement by making
a  cash  payment  of  $375,000 and issuing a 7%, $100,000, uncollateralized note
payable.  No  gain  or  loss was recognized on the modification and the carrying
value  of  the  note  was  established  at  approximately  $115,000.            

     As  of December 31, 2001, the balance due is $ 107,370, of which $22,993 is
classified  as  the  current  portion.                                          

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NOTE  6  -  RELATED PARTIES                                                     

     Our  related parties are more fully described in the 2001 Form 10-KSB.  The
following  table  reflects amounts owed to related parties at December 31, 2001:

                                                                [Download Table]

                                                      Notes           Accrued  
                                                     Payable        Liabilities
                                                   ----------       -----------
                                                                               
President and Chairman                             $  739,944        $  207,104
Other Significant Stockholders                        300,000            65,013
New Direction Centers of America, LLC                 629,200            15,730
                                                   ----------        ----------

     Total related party liabilities               $1,669,144        $  287,847
                                                   ==========        ==========

     In  addition,  the  president and chairman has personally guaranteed all of
our  notes  payable.                                                            

NOTE  7  -  SEGMENT  INFORMATION                                                

     We  operate   in  the   following  three   segments:  commercial   leasing,
correctional facility operation, and communications.  Information concerning our
business  segments  is  as  follows as of and for the quarter ended December 31:

                                                                [Download Table]

                                                  December 31,     December 31,
                                                      2001             2000    
                                                  ------------     ------------
Revenues                                                                       
                                                                               
  Commercial leasing                              $   110,151      $   104,748 
  Correctional facility                               555,313          509,855 
                                                  -----------      ----------- 
      Total                                       $   665,464      $   614,603 
                                                  ===========      =========== 

Segment operations profit (loss)                                               
  Commercial leasing                              $    (1,597)     $     3,906 
  Correctional facility                              (128,604)         (12,239)
  Communications                                      (25,758)        (115,270)
  Corporate                                           (56,616)         (84,212)
                                                 ------------      ----------- 
      Total                                      $   (212,575)     $  (207,815)
                                                 ============      =========== 

Identifiable  assets                                                           
  Commercial leasing                             $  2,621,094      $ 2,591,731 
  Correctional facility                             3,107,617        2,400,206 
  Communications                                      245,934          452,763 
  Corporate                                            14,648           40,359 
                                                 ------------      ----------- 
      Total                                      $  5,989,293      $ 5,485,059 
                                                 ============      =========== 

Depreciation  and  amortization                                                
  Commercial leasing                             $     20,158      $    18,613 
  Correctional facility                                69,355           62,421 
  Communications                                       23,447           28,327 
  Corporate                                               215              215 
                                                 ------------      ----------- 
      Total                                      $    113,175      $   109,576 
                                                 ============      =========== 

Capital  expenditures                                                          
  Commercial leasing                             $          -      $    12,721 
  Correctional facility                                10,128            1,709 
  Communications                                            -            6,510 
  Corporate                                                 -                - 
                                                 ------------      ----------- 
      Total                                      $     10,128      $    20,940 
                                                 ============      =========== 

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Interest  expense                                                              
  Commercial leasing                             $     67,524      $    57,254 
  Correctional facility                                86,682           82,828 
  Corporate                                            15,501           14,935 
                                                 ------------      ----------- 
      Total                                      $    169,707      $   155,017 
                                                 ============      =========== 

     Identifiable  assets  are those assets used in our operations in each area.
Corporate  income includes general and administrative costs and corporate assets
consist  primarily  of  cash  and  other  current  assets.                      

Note  8  -  COMMITMENTS  AND  CONTINGENCIES                                     

On  June  4,  2001, Talbot Investment Company was awarded a judgment against the
Company  of  approximately  $57,000  for  payment  of   real  estate  and  lease
commissions  from Business Park.  The award has been appealed by the Company and
management,  upon  advice by counsel, believes it is likely the judgment will be
reversed;  as  such,  a  provision  for  the  award has not been recorded in the
accompanying  financial  statements.                                            

The  Company  is involved in certain other administrative proceedings arising in
the  normal course of business.  In the opinion of management, such matters will
be  resolved  without  material effect on the Company's results of operations or
financial  condition.                                                           

Item  2.  Management's  Discussion  and  Analysis  or  Plan  of  Operation      

Introduction                                                                    

     The  following  discussion should be read in conjunction with our financial
statements  and notes thereto included elsewhere in this Form 10-QSB report.  In
addition, the discussion of our expected Plan of Operation, included in the 2001
Form  10-KSB,  is  incorporated  herein in its entirety as the discussion of the
Plan  of  Operation  as  required  by  Item  303(a)  of  Regulation  S-B.       

Plan  of  Operation                                                             

     Effective  June  1,  1998, NDAC completed the acquisition of the assets and
certain  liabilities  of  NDCA,  LLC  related  to  the  operation of a community
correction  business.   NDAC  runs a community correction center, commonly known
as  a  halfway house, that currently has approximately 207 beds available but is
licensed  to provide up to 300 beds.  NDAC also operates a community corrections
unit  which  has a design capacity of 150 beds.  NDAC operates its halfway house
operation  under  a  contract with the Oklahoma Department of Corrections, which
provides  clients  to  NDAC.  The community sentencing facility receives clients
from  the  area  county  courts.                                                

     Effective   April  24,  2000,   we   formed   Sooner  Communications,  Inc.
(Communications),  a  wholly  owned subsidiary.  Subsequent to the formation, we
acquired  the  rights to CADEUM, which will provide a unified messaging solution
to  integrated  communication  providers.                                       

The  Community  Correction  Business                                            

          NDAC  entered  the correctional business in June 1998 by acquiring the
assets  and  certain liabilities of New Direction Centers of America, LLC.  NDAC
owns   and   operates   two   correctional   facilities.    One  is   a  220-bed
minimum-security  correctional facility (Northgate), which houses 174 inmates in
Oklahoma  City,  Oklahoma,  as  of  December 31, 2001.  A non-secure residential
facility,  known  as a halfway house, provides residential correctional services
for  offenders in need of less supervision and monitoring than are provided in a

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secure  environment.  Offenders  in minimum-security correctional facilities are
typically  allowed  to  leave the facility to work in the immediate community or
participate  in  community  based  educational  and vocational training programs
during  daytime  hours.  Generally, persons in community correctional facilities
are  serving  the  last  six  months  of their sentence.  It has one significant
contract  with  the Oklahoma Department of Corrections.  Compensation is paid to
us  based  on  a  per-person,  per-day  basis.  Revenues  from this one contract
accounted  for 98 percent of our correctional revenue for the three months ended
December  31,  2001.                                                            

     NDAC's  facility  has received accreditation from the American Correctional
Association  (the  ACA),  the  governing body for accreditation.  The ACA has 25
mandatory  standards  and  263  non-mandatory  standards regarding staff working
conditions  and correctional facility living conditions.  A community correction
facility  that  is  ACA  accredited  can take private clients as well as Federal
clients.                                                                        

     As  of  May  8,  2001,   we  acquired  property  (Eastgate)  consisting  of
approximately  14  acres of land and a 40,000 square foot building to expand our
correctional business.  The purchase price was $1,002,000, of which $800,000 was
allocated  to  the  building   and  $202,000  was  allocated  to  the  land  and
correctional  zoning.  The  aggregate capacity of this facility is 150 beds.  We
have  completed  repairs  necessary to house up to 60 inmates as of December 31,
2001,  and  had  13  inmates  in  residence  as  of  December  31, 2001.  We are
continuing  the  rehabilitation  of  the  property.                             

     In  addition  to providing the fundamental residential services relating to
the  security  of  facilities  and  the  detention and care of inmates, NDAC has
developed  a broad range of in-facility rehabilitative and educational programs.
These  programs  include  substance  abuse  treatment and counseling, vocational
training,  life  skills training, and behavioral modification counseling.  These
services  are  offered  in  both  facilities.  We  believe  that our strategy of
offering  a  wide  variety  of programs and services will increase our marketing
opportunities.                                                                  

The  Real  Estate  Business                                                     

     Charlie  O Business Park operates a multi-unit rental property for business
and  industrial  tenants located in Oklahoma City, Oklahoma.  Charlie O Business
Park  became  an operating subsidiary upon its formation in November 1987 and is
100%  owned  by  us.                                                            

The  Communications  Business                                                   

     On  May  2,  2000  the  Sooner  Communications subsidiary purchased all the
rights  to,  a  computer  based  platform  called   Cadeum.   Cadeum  will  host
computer-based  telephony  products  that  are  being developed specifically for
telecommunication  providers.  Upon  completion  Sooner  plans  to  market these
products  on  a  wholesale  level  to  telecommunication  carriers.  Sooner  has
completed  beta  testing  the  answering  service section of Cadeum with a large
Texas  based  regional  telecommunication  provider.  Marketing of the answering
service  has begun.  We expect revenues to begin in the second fiscal quarter of
2002.                                                                           

      The  remainder  of  product testing is continuing on the balance of a full
feature  call  answering  system that will be used to assist in attracting small
and medium businesses to the provider's local product offering. We will continue
to  run  beta  testing  on  this  product  over  the  next  several  months.    

     An  interface has been written to allow a module of the software to operate
with  mass marketing telephone sales.  This product is in operations.  We expect
to  report  revenue  in  the  second  fiscal  quarter  of  2002.                

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     Negotiations  are  under  way  for the Sooner Communications division sales
staff to start offering traditional dedicated long distance services on a retail
basis.  We  fully expect that an agreement will be consummated with at least one
or   more   Oklahoma  telecommunication   companies   that   will  allow  Sooner
Communications  to  offer  their  product  lines on a cost reduced retail basis.

Business  Strategy                                                              

     Our  business  strategy  is  multi-faceted.  Each facet is discussed below.

Community  Corrections  Business                                      

     Our  business  strategy  is  to become a leading developer and a manager of
quality  privatized  community  correction facilities, initially in Oklahoma and
then  expanding  interstate.  Management  intends  on seeking a larger community
corrections business by expanding into other zoned facilities, either internally
or  through  acquisitions.    We  intend  on   obtaining  and   maintaining  ACA
accreditation  for  all  of  our  facilities.                                   

     We  will  operate  each facility under our management.  We will also either
directly  or  through  subcontractors, provide health care and food service.  In
the  future,  the  facilities  may  offer special rehabilitation and educational
programs,  such  as  academic  or  vocational  education,  job  and  life skills
training,  counseling  and  work  and  recreational  programs.                  

Communications  Business                                              

     The  strategy   of  Sooner  Communications   is   to   market   Cadeum   to
telecommunication  providers  who will then market it to their existing customer
base  as  well  as  new  customers.                                             

     The  voice  mail  portion  of the Cadeum product has been tested within the
regional  network  of  a  20-year-old,  regional,  integrated telecommunications
service  provider.  Certain  issues  have arisen which have required redesign of
the interface between the telephone switching system and our system.  We believe
we  have isolated the causes and have designed a resolution to those issues.  We
expect  to  have the interface installed and revenue from the voice mail portion
to  begin  in  the  late second calendar quarter of 2002.  Once we have revenues
from  the  voice  mail  system,  we  will  continue  development  of the unified
messaging  system  as  a  whole.                                                

     An  interface has been written to allow a module of the software to operate
with  mass  marketing  telephone  sales.  This  product  is  in  installed  and 
operational.  We  expect to report revenue in the second or third fiscal quarter
of  2002.                                                                       

     Once operational, we believe our Cadeum product will be eagerly accepted by
telecommunications  providers.                                                  

     We  expect the unified messaging segment of the telecommunications industry
as a whole to grow from approximately $272 million in 1999 to over $12.5 billion
by 2004.  The deregulation of the telecommunications industry has spawned a host
of   competitors  vying   for  the  public's  telephone  service.    A  regional
telecommunications  provider needs to distinguish itself from the competition by
offering  enhanced  services.  We  believe  that  our  Cadeum  product, with its
integration  of  telephony  products,  will  provide  this  distinction.        

Real  Estate  Business                                                

     Charlie  O  Business  Park will continue to operate as a real estate lessor
and property manager. As of December 31, 2001, the Park leased to 24 non-related

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lessees.  Charlie  O  Business Park's property includes five separate buildings,
covering  approximately 126,500 square feet, located at the intersection of I-40
and  Agnew  Street  in   Oklahoma  City,  Oklahoma.   Sooner  Holdings  and  its
Communications  subsidiary  currently  operate out of approximately 2,900 square
feet  in  the  business  park.  Charlie  O  Business  Park  competes  with other
commercial  lessors  in the Oklahoma City market.  Its occupancy, excluding that
leased  to  Sooner  Holdings  and  Sooner  Communications, has averaged over 95%
during  both  2001  and  2000.                                                  

Liquidity  and  Capital  Resources  -  December 31, 2001 (unaudited) compared to
December  31,  2000  (unaudited).                                               

     We  have  had  severe  liquidity  problems for the last several years.  Our
liquidity  is reflected in the table below, which shows comparative deficiencies
in  working  capital.                                                           

                                                                [Download Table]

                                                             December 31,       
                                                          2001          2000    
                                                      -----------   ------------
                                                                                
Deficiency  in  working  capital                      $(2,024,940)  $(1,967,243)
                                                      ============  ============

     Although  our  working  capital  is negative, we have been able to meet our
obligations  as  a  result of the financial support received from certain of our
related  parties.  Our  current  working capital, which has been provided in the
form  of  notes  payable, has been primarily supplied by either our chairman and
president, or by Aztore' Holdings, Inc. ("Aztore' "), a significant shareholder.

     The  extreme  negative working capital is a result of the contractual terms
of  certain  notes  payable.  We  would show substantially less negative working
capital  if  not  for  the  following  items:                                   

          1.  One  note payable  to a bank with a current balance of $417,394 is
     due August 12, 2002. This note is expected to be extended  on terms similar
     to the existing terms.  Because of its due  date, it is classified as short
term in full.                                                         

          2.  The mortgage  payable  on the correctional facility is intended by
     all parties  to  be a long-term obligation.  However, by its terms, it is a
     one-year  renewable  note  payable  monthly.   The most current due date is
     April 20, 2002.  The amount in  these statements is $483,442.  This note is
paid current and is not  in  default.                                 

          3.  A note payable to a bank with a current balance of $737,017 is due
     November 28, 2002.   This note is  expected to be extended on terms similar
     to the existing  terms.  Because of its  due  date,  it  is  classified  as
short term in full.                                                   

          4.  Certain  accrued   liabilities,  primarily   interest,  to related
     parties  are  classified  as  current  in  these statements,  but  are  not
     expected  to  be  repaid  until after  2003.  These liabilities  amount  to
$287,847.                                                             

     Exclusive  of  funds  required  for  debt repayment, we believe that we can
borrow any additional funds from our related parties to maintain our operations,
although  there  can  be  no  assurance  that  such funds will be available when
needed.  In  the  event  that  we cannot refinance, or obtain forbearance on our
current  liabilities  or  on our long-term liabilities as they come due, we will
undoubtedly face further severe liquidity problems which may lead to litigation,

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the  inability  to transact business, and/or foreclosure actions being initiated
against  a  majority  of  our  assets.                                          

     The  operations  of  both  the  real  estate  business  and  the  community
corrections  business  generated  positive cash flows from operations during the
quarter  ended  December  31,  2001.  The  amounts  were  $19,557  and  $43,377,
respectively.  We expect the communications business to begin generating revenue
in  the  late  second  or  third fiscal quarter of this year.  We also intend to
continue  the  rehabilitation of the correctional facility in order to bring the
inmate occupancy up to 300 beds.  In the event that cash flow is insufficient to
satisfy  our  needs, we believe that we can borrow any additional funds from our
related  parties  to  maintain  our  operations.                                

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Results  of  Operations  -  The  quarter ended December 31, 2001 compared to the
quarter  ended  December  31,  2000                                             

The  following  table  illustrates  our  revenue  mix:                

                                                                [Download Table]

                                                   Quarter ended      
                                                    December 31,      
                                                 2001          2000   
                                               ---------     ---------
                                                                      
NDAC revenue                                   $ 555,313     $ 509,855
Business Park revenue                            110,151       104,748
                                               ---------     ---------
      Total revenue                            $ 665,464     $ 614,603
                                               =========     =========

     Correctional  Facility  revenues  increased by $45,458, or 8.9%, during the
first  fiscal quarter of 2002 as compared to the same period in 2001.  Community
sentencing  revenues  were  $87,153,  which  were  not present in the comparable
period  of  the prior year.  Due to billing adjustments on prior invoices at the
Oklahoma  Department  of  Corrections, revenues from the halfway house operation
were reduced by $41,695  during  the  quarter.  We  do not expect this to recur.

     Business  Park  revenues  increased $5,403, or 5.2% during the first fiscal
quarter  of  2002  as  compared  to  the  same period in 2001.  This increase is
attributable  to  the  renting late  in the  first fiscal quarter of 2000 of the
space  vacated  by  one  major tenant in July of 2000.  At December 31, 2001 the
Business  Park  was  over 95% occupied.  We believe its long-term prospects will
continue  to  improve with longer leases and higher rates.  Losses of tenants in
the  future could affect future operations and financial position because of the
cost  of  new  leasehold  improvements  and  lower  revenue due to any prolonged
vacancy.                                                                        

     Total  operating expenses for the three months ended December 31, 2001 were
$714,398  as compared to total operating expenses for the comparable 2000 period
of $670,355.  Expenses at our communications subsidiary decreased by $88,867, or
77.5%,  primarily  due to reduced operations while we assess and reconfigure our
Cadeum  operation.  For  the  three  months  ended  December  31, 2001, the NDAC
subsidiary  accounted  for  $589,488, or 82.5%, of our total operating costs, as
compared  to  $442,087  or  66%  of the total operating costs for the comparable
prior  period.  Increased  security,  counseling,  and  other  operating  costs 
resulted  from  the  start  up  of  our  community  sentencing  operation.  The 
amortization  of  the  NDAC  intangible  assets  represents $48,689 of the total
depreciation  and  amortization  expense  for  the  current  period.            

     Interest  expense increased by $14,690, or 9.5%, for the three months ended
December 31, 2001 as compared to the comparable period in 2000, primarily due to
the  acquisition  of  the  community  sentencing  property  in  May  or  2001.  

     We recorded a net loss in the first fiscal quarter of 2001 of approximately
$212,275  or  approximately  $.02  per  share,  compared  to  a  net loss in the
comparable  period  of  the  prior  year  of $207,815, or approximately $.01 per
share.                                                                          

Capital  Expenditures  and  Commitments                                         

     During  the  first quarter ending December 31, 2001, we spent approximately
$10,000  on  capital  expenditures,  primarily for improvements at the community
sentencing  property.                                                           

     We  expect  to spend an additional $150,000 for capital expenditures at our
Correctional  Facility  operation during the remainder of fiscal 2002 to improve
the  community  sentencing  property.                                           

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Factors  that  May  Affect  Future  Results                                     

     A  number  of  uncertainties  exist  that  may  affect our future operating
results.  These  include  the uncertain general economic conditions, our ability
to refinance our notes payable on satisfactory terms, and our ability to acquire
sufficient  funding  to  sustain  our  operations and develop new businesses.  A
majority  of  these  issues directly or indirectly relate to our ability to sell
additional equity or obtain additional debt at reasonable prices or rates, if at
all.                                                                            

Forward-Looking  Statements                                                     

     Certain  statements and information contained in this Report concerning our
future, proposed, and anticipated activities, certain trends with respect to our
revenue,  operating results, capital resources, and liquidity or with respect to
the  markets  in  which we compete and other statements contained in this Report
regarding  matters that are not historical facts are forward-looking statements,
as  such  term is defined in the Securities Act.  Forward-looking statements, by
their  very nature include risks and uncertainties, many of which are beyond our
control.  Accordingly, actual results may differ, perhaps materially, from those
expressed  in  or  implied  by  such  forward-looking  statements.              

PART II. OTHER INFORMATION

Item  1.  Legal  Proceedings                                                    

     We  are not aware of any litigation either pending, asserted, unasserted or
threatened  to which we or any of our subsidiaries is a party or of which any of
their  property  is  the  subject.                                              

    Our  Business  Park  operation  occasionally  has  disputes  with  tenants
regarding  its  lease agreements.  In our opinion, such matters will be resolved
without  material  effect  on  our results of operations or financial condition.

Item  2.  Changes  in  Securities                                               

None                                                                  

Item  3.  Defaults  Upon  Senior  Securities                                    

None                                                                  

Item  4.  Submission  of  Matters  to  a  Vote  of  Security  Holders           

None                                                                  

Item  5.  Other  Information                                                    

None                                                                  

Item  6.  Exhibits  and  Reports  on  Form  8-K                                 

Exhibits                                                              

None                                                                  

Form  8-K                                                             

None                                                                  

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SIGNATURES

     Pursuant  to  the  requirements of the Securities and Exchange Act of 1934,
the  registrant  has  duly  caused this report to be signed on its behalf by the
undersigned  thereunto  duly  authorized.                                       

Dated:  February 12, 2002                  SOONER HOLDINGS, INC.                
                              (Registrant)
                                          By:/s/R. C. Cunningham II, President
                                                ------------------------------
                                            (Chairman  of  the  Board)

                                By:/s/M.  T.  Buxton,  III
                                                ------------------------------
                                             (Chief  Financial  Officer)

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Dates Referenced Herein and Documents Incorporated By Reference

		Referenced-On Page
This 10QSB Filing	Date	First	Last	Other Filings

	6/1/98	9
	4/24/00	9
	5/2/00	10
	12/31/00	12	14	10QSB
	5/8/01	10
	6/4/01	9
	6/30/01	6		NT 10-Q, 10QSB
	7/1/01	6
	7/20/01	6
	9/24/01	7
	9/30/01	5		10KSB
	10/1/01	6
	12/15/01	6
For The Period Ended	12/31/01	1	14	10KSB
	2/1/02	1
	2/12/02	16
Filed On / Filed As Of	2/14/02
	4/20/02	7	12
	8/12/02	7	12
	11/28/02	7	12
	12/31/02	7		NT 10-Q
	9/30/03	7
	5/5/05	7
	8/1/09	7
	5/8/16	7

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Sooner Holdings Inc/OK · 10QSB · For 12/31/01

Filed On 2/14/02 · SEC File 0-18344 · Accession Number 1060830-2-24

Quarterly Report -- Small Business · Form 10-QSBFiling Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated By Reference

Quarterly Report -- Small Business · Form 10-QSB
Filing Table of Contents