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Sooner Holdings Inc/OK · 10QSB · For 6/30/01

Confirming Copy · Filed On 8/20/01 · SEC File 0-18344 · Accession Number 1060830-1-500089

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

 8/20/01  Sooner Holdings Inc/OK            10QSB©      6/30/01    1:12                                     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                    12     77K

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
7	Item 2. Management's Discussion and Analysis or Plan of Operation
11	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 12 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 June 30, 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: 16,888,016 shares of common
stock  as  of  August  1,  2001.                                                

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 PART I. FINANCIAL INFORMATION

Item  1.  Financial  Statements                                                 

 SOONER HOLDINGS, INC.
Consolidated Balance Sheet
(unaudited) 
 June 30, 2001
ASSETS

                                                                [Download Table]

                                                                   June 30, 2001
                                                                   -------------
Current  assets:                                                                
                                                                                
  Cash and cash equivalents                                         $   118,294 
  Restricted Cash                                                         1,682 
  Accounts receivable - net                                             221,725 
  Other current assets                                                   82,772 
                                                                    ----------- 
      Total current assets                                              424,473 

Property and equipment, net                                           4,037,298 
Intangible assets, net of accumulated amortization of $692,898        1,457,582 
Other assets, net                                                       333,615 
                                                                    ----------- 

                                                                    $ 6,252,968 
                                                                    =========== 

                      LIABILITIES AND SHAREHOLDERS' DEFICIT                     

Current  liabilities:                                                           
  Current notes payable                                             $    68,563 
  Accounts payable                                                       87,121 
  Accrued liabilities                                                   465,417 
  Current portion of notes payable and royalty payable                  835,554 
  Deferred revenue                                                       25,935 
                                                                    ----------- 
      Total current liabilities                                       1,482,590 

Notes payable, less current portion                                   5,510,788 

Royalty payable, less current portion and                                       
  net of discount of $730,157                                           421,842 
                                                                    ----------- 

      Total Liabilities                                               7,415,220 

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,                 
     16,888,016 shares issued and outstanding                            16,888 

  Additional paid-in-capital                                          6,445,489 
  Accumulated deficit                                                (7,372,629)
  Related party receivables from stock purchases                       (252,000)
                                                                    ----------- 
                                                                    $ 6,252,968 
                                                                    ----------- 

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             For the nine        
                                   months ended             months ended        
                                     June 30,                  June 30,         
                                2001         2000         2001         2000     
                             -----------  -----------  -----------  ----------- 
Revenues:                                                                       
                                                                                
  Rental revenues            $   110,443  $   101,703  $   329,584  $   314,363 
  Service revenues               571,382      428,091    1,647,332    1,135,572 
                             -----------  -----------  -----------  ----------- 
      Total revenues             681,825      529,794    1,976,916    1,449,935 
                             -----------  -----------  -----------  ----------- 

Operating  Expenses:                                                            
  Cost of Services               260,918      217,265      677,334      563,035 
  General and administrative     442,403      242,534    1,133,673      592,315 
  Depreciation and                                                              
    amortization                 130,065       79,552      351,048      232,933 
                             -----------  -----------  -----------  ----------- 
      Total operating                                                           
        expenses                 833,386      539,351    2,162,055    1,388,283 
                             -----------  -----------  -----------  ----------- 

Income (loss) from operations   (151,561)      (9,557)    (185,139)      61,652 

Interest expense                (165,012)    (168,492)    (469,332)    (500,347)
Other  income  (expense)                                                        
  Interest income                  6,602        3,472       13,104        7,942 
  Gain on settlement of debt      15,004            -       15,004              
  Other income                       764           77        1,274           77 
  Loss on disposal                                                              
    of subsidiary                      -            -            -      (16,817)
  Write off of deferred loan                                                    
    costs on refinancing               -            -            -      (18,046)
                             -----------  -----------  -----------  ----------- 
  Loss before income taxes                                                      
    and extraordinary item      (294,203)    (174,500)    (625,089)    (465,539)

Income tax benefit - deferred          -            -            -       70,000 
                             -----------  -----------  -----------  ----------- 
  Loss before                                                                   
    extraordinary item          (294,203)    (174,500)    (625,089)    (395,539)
                             -----------  -----------  -----------  ----------- 

Extraordinary gain in                                                           
  extinguishments of debt,                                                      
  net of income taxes                                                           
  of $70,000                           -            -            -      101,010 
                             -----------  -----------  -----------  ----------- 

Net Loss                     $  (294,203) $  (174,500) $  (625,089) $  (294,529)
                             ===========  ===========  ===========  =========== 

Basic and diluted loss                                                          
  per common share           $     (0.02) $     (0.01) $     (0.04) $     (0.03)
                             ===========  ===========  ===========  =========== 

Weighted average common                                                         
  shares outstanding          16,888,016   14,205,782   16,888,016   10,490,815 
                             ===========  ===========  ===========  =========== 

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

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

                                                                [Download Table]

                                                     For the nine months ended  
                                                             June 30,           
                                                       2001            2000     
                                                   ------------    -------------
                                                                                
Cash  flows  from  operating  activities:                                       
  Net loss                                         $   (625,089)   $   (294,529)
  Adjustments to reconcile net income (loss) to                                 
    net cash used in operating activities:                                      
      Accretion of interest                              91,754          79,035 
      Depreciation and amortization                     351,048         232,933 
      Compensation on issue of stock                          -          93,000 
      Extraordinary gain on extinguishments of debt           -        (171,010)
      Changes  in  assets  and  liabilities:                                    
        Accounts receivable                             (64,688)         11,208 
        Other current assets and other assets            80,136        (111,031)
        Accounts payable                                (15,961)        (14,353)
        Accrued liabilities                             164,463        (106,732)
        Deferred revenue                                  1,600         (15,147)
                                                   ------------    ------------ 
      Net cash used in operating activities             (16,737)       (296,626)
                                                   ------------    ------------ 

Cash  flows  from  investing  activities:                                       
  Increase (Decrease) in restricted cash                  9,816         (10,045)
  Purchases of property and equipment                (1,085,281)       (154,740)
                                                   ------------    ------------ 
      Net cash used in investing activities          (1,075,465)       (164,785)
                                                   ------------    ------------ 

Cash  flows  from  financing  activities:                                       
  Proceeds from issuance of long term debt            1,000,000               - 
  Repayments of long term debt and royalty payable     (765,911)       (562,585)
  Borrowings on notes payable                           737,017         955,111 
  Net borrowings on line of credit                       63,563         110,000 
                                                   ------------    ------------ 
      Net cash provided by (used in)                                            
        financing activities                          1,034,669         502,526 
                                                   ------------    ------------ 

Net increase (decrease) in cash                         (57,533)         41,115 
Cash at beginning of period                             175,827         243,248 
                                                   ------------    ------------ 

Cash at end of period                              $    118,294    $    284,363 
                                                   ============    ============ 

Supplemental disclosure of cash flow information:                               
  Cash paid during the period for interest         $    455,950    $    471,343 
                                                   ============    ============ 

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) 

 For the three and nine months ended June 30, 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 a minimum security correctional facility in Oklahoma City, Oklahoma and
Charlie O Business Park Incorporated (Business Park) is engaged in the ownership
and  rental  of  a  business  park  in  Oklahoma  City,  Oklahoma.  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,  2000 (the "2000 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 changes in cash flow.  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, 2000, 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 $1,162,252 and have a
working  capital  deficiency  of  $1,058,117 at June 30, 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 2000 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.                             

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

     Certain  reclassifications have been made to the fiscal year 2000 financial
statements  to  conform  to  the  2001  presentation.                           

NOTE  2  -  Property  and  Equipment                                            

     Property  and  equipment as of June 30, 2001 is comprised of the following:

                                                                [Download Table]

                                                                             
Land                                                              $ 1,513,400
Buildings and improvements                                          3,040,545
Machinery and equipment                                               207,395
Vehicles                                                               80,968
                                                                  -----------

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                                                                [Download Table]

                                                                               
                                                                      4,842,308
  Less accumulated depreciation                                         805,010
                                                                    -----------

  Property and equipment, net                                       $ 4,037,298
                                                                    ===========

NOTE  3  -  OTHER  ASSETS                                                      

     Other assets at June 30, 2001 is comprised of the following:              

  Loan commitment fee, less amortization of $8,462                  $   106,615
  Certificates of deposit                                               227,000
                                                                    -----------
  Other assets, net                                                 $   333,615
                                                                    ===========

NOTE  4  -  NOTES  PAYABLE                                                     

     Notes payable as of June 30, 2001 consists of the following:              

Installment note payable, interest at 8.8%, due                                
  August 1, 2009; collateralized by first mortgage                             
  on real estate                                                    $ 2,471,817

Notes payable to president and CEO, interest at 10%,                           
  due after June 30, 2002.  Subordinate to first mortgage                      
  on  correctional  facility.                                           704,944

Notes payable to stockholders, interest at 10%, due                            
  concurrently with the $629,200 balloon promissory note                       
  discussed below.  Not  collateralized.                                300,000

Revolving line of credit from Bank, interest at prime                          
  plus 3.25%, currently 11.5%, matures May 5, 2005,                            
  collateralized by accounts receivable.                                 68,563

Note  payable to related party (see  Note 6), 10%                              
  stated interest per annum, principal  and interest                           
  due June 1, 2004; collateralized by a second mortgage on                     
  land and facility owned by us, subordinated to bank mortgages.        629,200

Note payable to unrelated party, original principle                            
  $1,000,000, interest at 8.0%, payable in 180 monthly                         
  installments of $9,557 through May, 2016.                                    
  Collateralized by land and facilities.                                997,110

Note payable to bank, interest at 8.5%, maturity at                            
  August  31,  2001.  Collateralized by second mortgage                        
  on  land  and  facilities  owned  by  us.                             737,017

Note payable to bank, interest at New York prime plus 2%,                      
  currently 11.5%, collateralized by a firs  mortgage on                       
  land  and  facility  owned by us and certificates of deposit                 
  totaling $227,000.  Due April 20, 2002.                               506,254
                                                                    -----------

                                                                      6,414,905
Less classified as current notes payable                                 68,563
Less current portion                                                    835,554
                                                                    -----------
      Notes payable                                                 $ 5,510,788
                                                                    ===========

NOTE  5  -  ROYALTY  PAYABLE                                                    

     As  part  of  a  business  acquisition,  we assumed a royalty payable to an
individual.  The  agreement  calls for monthly payments of the greater of $6,000

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or  6% of the total gross monthly income of NDAC. The agreement expires on April
30,  2017.  Future  minimum  payments  under this agreement total $1,152,000.  A
discount  of  $730,157  was  imputed  by management at June 30, 2001 using a 15%
interest  rate.  These  financial  statements contain an accrual as of  June 30,
2001  for  excess  royalty  due  of  $80,429.                                   

NOTE  6  -  related  parties                                                    

     Our  related parties are more fully described in the 2000 Form 10-KSB.  The
following  table  reflects  amounts  owed  to  related parties at June 30, 2001:

                                                                [Download Table]

                                             Notes             Accrued  
                                            Payable          Liabilities
                                          -----------        -----------
                                                                        
President and Chairman                    $   704,944        $  171,204 
Other Significant Stockholders                300,000            50,013 
New Direction Centers of America, LLC         629,200             4,033 
                                          -----------        ---------- 

      Total related party liabilities     $ 1,634,144        $  225,250 
                                          ===========        ========== 

     In  addition, the president and chairman has personally guaranteed $545,621
of  our  notes  payable.                                                        

NOTE  7  -  COMMITMENTS  AND  CONTINGENCIES                                     

     In  February  1998,  a  lawsuit  was filed by a former affiliate against us
related  to  the  purchase of New Direction Centers of America, LLC (NDCA, LLC).
On  January  18,  2000,  a  settlement was reached.  The terms of the settlement
include  a  payment  of  $76,000  by  NDAC, which was fully paid during the nine
months  ended  June  30,  2001.                                                 

     We  are involved in certain other administrative proceedings arising in the
normal  course  of  business.  In  the  opinion  of  management,  such  matters,
including  the lawsuit described above, will be resolved without material effect
on  our  results  of  operations  or  financial  condition.                     

NOTE  8  -  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 three and nine months ended
June  30,  2001:                                                                

                                                                [Download Table]

                                                           Nine        Nine     
                                  Quarter     Quarter     Months      Months    
                                   Ended       Ended       Ended       Ended    
                                  June 30,    June 30,    June 30,    June 30,  
                                    2001        2000        2001        2000    
                                 ----------  ----------  ----------  ---------- 
                                                                                
Revenues                                                                        
    Commercial leasing           $  110,443  $  101,703  $  329,584  $  314,363 
    Correctional facility           571,382     428,091   1,647,332   1,135,572 
                                 ---------------------------------------------- 

    Total                        $  681,825  $  529,794  $1,976,916  $1,449,935 
                                 ============================================== 

Segment operations profit (loss)                                                
    Commercial leasing           $    6,816  $    4,052  $   28,473  $   32,238 
    Correctional facility          (180,645)    (25,668)   (196,887)   (179,218)
    Communications                  (95,286)    (85,635)   (317,071)    (83,635)
    Corporate                       (25,088)    (67,249)   (139,604)    (63,914)
                                 ---------------------------------------------- 
    Total                        $ (294,203) $ (174,500) $ (625,089) $ (294,529)
                                 ---------------------------------------------- 

Identifiable  assets                                                            
    Commercial leasing           $2,586,634  $2,596,665  $2,586,634  $2,596,665 
    Correctional facility         3,278,069   2,495,365   3,278,069   2,495,365 

 8

                                                                [Download Table]

                                                                               
    Communications                  375,945     551,394     375,945     551,394
    Corporate                        12,320     511,750      12,320     511,750
                                 ----------------------------------------------
    Total                        $6,252,968  $6,155,174  $6,252,968  $6,155,174
                                 ==============================================

Depreciation  and  amortization                                                
    Commercial leasing           $   21,355  $   19,119  $   59,962  $   58,968
    Correctional facility            80,168      60,433     205,460     173,965
    Communications                   28,327           -      84,981           -
    Corporate                           215           -         645           -
                                 ----------------------------------------------
    Total                        $  130,065  $   79,552  $  351,048  $  232,933
                                 ==============================================

Capital expenditures                                                           
    Commercial leasing           $    2,579  $   15,842  $   34,737  $   29,462
    Correctional facility         1,031,244      29,940   1,044,034      34,208
    Communications                        -      91,020       6,510      91,020
    Corporate                             -          50           -          50
                                 ----------------------------------------------
    Total                        $1,033,823  $  136,852  $1,085,281  $  154,740
                                 ==============================================

Interest  expense                                                              
    Commercial leasing           $   56,959  $   53,264  $  168,819  $  167,852
    Correctional facility            93,117     102,073     255,139     276,987
    Corporate                        14,936      13,155      45,374      55,508
                                 ----------------------------------------------
    Total                        $  165,012  $  168,492  $  469,332  $  500,347
                                 ==============================================

     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.                      

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 2000
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 operates under a contract with the
Oklahoma  Department  of  Corrections,  which  provides  clients  to  NDAC.     

 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                                            

     The  facility  operated  by  NDAC  is a non-secure residential facility for
adult  male and female offenders transitioning from institutional to independent
living.  Offenders  are  eligible  for  these  programs  based  upon the type of
offense  committed  and  behavior  while   incarcerated  in  prison.   Offenders
generally spend the last six months of their sentence in a community corrections

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program.  The  goal  and  mission of NDAC's community corrections business is to
reduce  the  likelihood  of  an  inmate  committing  an offense after release by
assisting in the reunification process with family and the community.  Offenders
must  be  employed,  participate in substance abuse programs, submit to frequent
random drug testing, and pay a predetermined percentage of their earnings to the
government to offset the cost of the program.  We supervise these activities and
also provide life skills training, case management, home confinement supervision
and  family  reunification  programs  at  our  facilities.                      

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

     As  of  May  8,  2001,  we acquired property 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. We
have completed repairs necessary to house a limited number of inmates as of June
30,  2001, and had 3 inmates in residence as of June 30, 2001. We are continuing
the  rehabilitation  of  the  property.                                         

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 fourth fiscal quarter of
2001.                                                                           

      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  business  to  their 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  fourth  fiscal  quarter  of  2001.                

     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 consumated 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 first phase of installation is to integrate

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Cadeum  -  which  hosts  Class  5  enhanced  features  -  into a legacy, Class 4
switching  environment.  A  portion of the  Cadeum product is being marketed now
within  the  network  of  a 20-year-old, regional, integrated telecommunications
service  provider.   The  balance  of  the  unified messaging system is still in
testing.                                                                        

     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 June 30, 2001, the Park leased to 24 non-related
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 2,200 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 90%
during  both  2001  and  2000.                                                  

Liquidity  and  Capital  Resources  -  June  30, 2001 compared to June 30, 2000.

     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]

                                                   June 30,           
                                             2001             2000    
                                             ----             ----    
                                                                      
Deficiency in working capital           $ (1,058,117)    $ (1,460,779)
                                        ============     ============ 

     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").  As of December 31, 1999,
Aztore  agreed to restructure a majority of its liabilities as part of the NDAC,
LLC  acquisition.                                                               

     The  decrease  in working capital deficiency resulted from the pay off of a
portion  of the New Direction Centers of America, LLC note payable together with
a  deferral to long term of the unpaid balance of $629,200 stockholders. The pay
off  was  accomplished  through a short-term loan from a bank of $737,017, which
included  a loan origination fee of $50,000. Working capital for the comparative
period  included the entire note due to New Direction Centers of America, LLC as
current.                                                                        

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

     In  June 1999, we refinanced the debt on CO Park.  The debt was replaced by
a  single  note  in  the amount of $2,500,000 payable to a bank with interest at
8.8%  that  matures  in  June  2009.                                            

     During  the first week of June 2001, a put option expired on 500,000 shares
of  redeemable  common  stock. This expiration resulted in a reclassification of
$500  to  common  stock  and  $467,999  to  additional  paid  in  capital.      

     The  operations  of  both  the  real  estate  business  and  the  community
corrections  business  generated  positive cash flows from operations during the
three  and  nine  months  ended  June 30, 2001.  The amounts were, respectively,
$25,207  and  $66,615 for the real estate business, and $47,676 and $161,223 for
the  community  corrections  business.  We expect the communications business to
begin  generating  revenue  in  the fourth fiscal quarter of this year.  We also
intend  to  continue the rehabilitation of the original correctional facility in
order  to  bring  the  inmate  occupancy  up  to  300  beds   and   to  continue
rehabilitation  of  the  new  facility  to eventually house 200 inmates.  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 three and nine months ended June 30, 2001 compared
to  the  same  periods  ended  June  30,  2000                                  

The  following  table  illustrates  our  revenue  mix:                

                                                                [Download Table]

                               Three months end        Nine months ended    
                                     June 30,               June 30,        
                                 2001       2000        2001         2000   
                              ---------  ---------  -----------  -----------
                                                                            
NDAC revenue                  $ 571,382  $ 428,091  $ 1,647,332  $ 1,135,572
Business Park revenue           110,443    101,703      329,584      314,363
Other revenue                         -          -            -            -
                              ---------  ---------  -----------  -----------

      Total revenue           $ 681,825  $ 529,794  $ 1,976,916  $ 1,449,935
                              =========  =========  ===========  ===========

     Correctional Facility revenues for the three and nine months ended June 30,
2001  increased  by  $143,291  (33.5%)  and  $511,760  (45.1%), respectively. as
compared  to  the  same  periods  in  fiscal  year 2000.  During the Spring 2000
legislative  session,   the  Governor  signed  S.B.  1241,  which  requires  all
non-violent  offenders  due  for  release to serve at least 90 days in a halfway
house  facility  such as is operated by us.  Our increase in revenue is directly
related  to  increased  occupancy  created  by  the  legislation.               

     Business  Park  revenues  increased $8,740 (8.6%) and $15,221 (4.8%) during
the  three  and nine months ended June 30, 2001, as compared to the same periods
in  fiscal  year 2000.  These increases are attributable to the leasing of space
vacated  by  one  major tenant in July of 2000 and the ongoing program of longer
leases  and  an  increase  average  rental rates for space.  The majority of the
vacant  space  was  again leased as of September 30, 2000.  At June 30, 2001 the
Business  Park  was  over 98% occupied.  We believe its long-term prospects will
improve  with  longer  leases and higher rates.  Losses of tenants in the future
could affect future operations and financial position because of the cost of new
leasehold  improvements  and  lower  revenue  due  to  any  prolonged  vacancy. 

     Total  operating expenses for the three and nine months ended June 30, 2001
were  $833,386  and  $2,162,055,   respectively,  compared  to  total  operating
expenses  for the comparable fiscal 2000 periods of $539,351 and $1,388,283. The
increase  in  the  2001  expenses  was  due  primarily  to the operations of our
Communications  subsidiary, which spent $95,283 and $317,070 (11.4% and 14.7% of
total operating costs) and had no revenue; to the write off of a receivable from
New  Direction  Centers  of  America,  LLC  in  connection with the pay off of a
portion of its note; and the accrual of $41,668 of estimated excess royalty due.
For the three and nine months ended June 30, 2001, the NDAC subsidiary accounted
for  $677,445  (81.3%)  and  $1,608,322  (74.4%)  of  the total operating costs,
respectively. Increased security, counseling, and other operating costs resulted
from  the  almost  40% increase in average inmate population in the current year
over  the  previous  year.  The  amortization  of  the  NDAC  intangible  assets
represents  $65,486  and  $162,864  of  the  total depreciation and amortization
expense  for  the  three  and  nine  months  ended  June  30,  2001.            

     Interest expense decreased by $3,480 (2.1%) and 31,015 (6.2%) for the three
and nine months ended June 30, 2001, respectively, as compared to the comparable
periods  in  fiscal  2000, primarily due to the refinancing of the related party
notes  in  the  fourth  calendar  quarter  of  1999.                            

     We  recorded  net loss for the three and nine months ended June 30, 2001 of
approximately  $294,203 and $625,089 or approximately $0.02 and $0.04 per share,
respectively, compared to net losses in the comparable periods of the prior year
of  $174,500  and  $294,529,  or   approximately  $0.01  and  $0.03  per  share,
respectively.  The  increases  in losses are represented by four  items.  First,
the startup of our communications subsidiary and administrative expenses related
to  the  development of the business during fiscal 2001 which was not present in
the comparable periods of fiscal 2000.  Second, the prior year nine month period
showed  an  extraordinary  gain  from  restructuring of related party debts of $
171,010  in  the  first  fiscal quarter.  Third, the write off of the receivable
discussed  above  in  the  amount of $101,615. Fourth, the accrual of $41,668 of
additional  royalty  expense  in  the  third  quarter.                          

Capital  Expenditures  and  Commitments                                         

     During  the  three  and  nine   months  ending  June  30,  2001,  we  spent
approximately  $31,823  and  $83,281  (exclusive  of the $1,002,000 spent on the
facility  acquisition  in  the  current   quarter),   respectively,  on  capital
expenditures,  primarily  for  improvements at NDAC primary facility and $22,800
for  a  roof  at  the  new  correctional  facility.                             

     We  expect  to spend an additional $150,000 for capital expenditures at our
new  Correctional Facility operation during the remainder of fiscal 2001 to meet
the  increased  demand  for  bed  space resulting from the legislation discussed
above.                                                                          

Factors  that  May  Affect  Future  Results                                     

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     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,  except  as  follows:                        

     In February 1998, a lawsuit was filed by one of the owners of New Direction
Centers  of America, L.L.C. against us relating to the purchase of the community
correctional  business.  On  January  18,  2000,  a settlement was reached which
includes  a  payment  of $76,000. Part of the terms of the settlement included a
lump  sum  payment  of  $20,000  and  an installment note for $56,000 payable at
$5,000  per  month  at  10%.  This debt was liquidated during the second quarter
2001.                                                                           

     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:  August 17, 2001                         SOONER HOLDINGS, INC.           
                                      (Registrant)
                         By:/s/R.C. Cunningham II,
                                           -------------------------------------
                                   R.C. Cunningham II, President
                                (Chairman  of  the  Board)

                      By:/s/M.T. Buxton, III
                                           -------------------------------------
                      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	7
	12/31/99	9		10KSB, NT 10-K
	1/18/00	7	11
	4/24/00	7
	5/2/00	8
	6/30/00	9	10	10QSB, NT 10-Q, NT 10-Q/A
	9/30/00	5	10	10KSB
	5/8/01	8
For The Period Ended	6/30/01	1	10	NT 10-Q
	8/1/01	1
	8/17/01	12
Filed On / Filed As Of	8/20/01
	8/31/01	6
	4/20/02	6
	6/30/02	6		10QSB, NT 10-Q
	6/1/04	6
	5/5/05	6
	8/1/09	6
	4/30/17	7

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Filing Submission - Alternative Formats (Word / Rich Text, HTML, Plain Text, SGML, XML, et al.)

Sooner Holdings Inc/OK · 10QSB · For 6/30/01

Confirming Copy · Filed On 8/20/01 · SEC File 0-18344 · Accession Number 1060830-1-500089

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
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