SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

                             -----------------------
                                   FORM 10-KSB
                             -----------------------


ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the fiscal year ended     December 31, 1998
                                       ------------------

                          Commission File No. 0-18344
                                              -------

                              SOONER HOLDINGS, INC.
                              ---------------------
                 (Name of small business issuer in its charter)

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

2680 W. I-40  Oklahoma City, Oklahoma                                      73108
-------------------------------------                                      -----
(Address of principal executive offices)                              (Zip Code)

Issuer's telephone number:                                        (405) 236-8332
                                                                  --------------

Securities registered under Section 12(b) of the Exchange Act:              None
                                                                            ----

Securities registered under Section 12(g)
of the Exchange Act:                                        Common stock, no par
                                                            --------------------

         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 [ ]    No [X]


         Check if there is no  disclosure  of  delinquent  filers in response to
Item 405 of  Regulation  S-B contained in this form,  and no disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form l0-KSB. [ ]

         Revenues for the year ending December 31, 1998 were $1,039,444.

         The aggregate  market value of the voting stock held by  non-affiliates
of the Company on March 15,  2000 was  approximately  $320,000.  As of March 15,
2000 the Company had 8,471,350 shares of common stock issued and outstanding.

         Transitional Small Business Issuer Disclosure Format  Yes [ ]  No [X]


         This document consists of 14 pages. The exhibit index is on page 13.



                                       1
<PAGE>


                              SOONER HOLDINGS, INC.
                                   Form 10-KSB

                   for the fiscal year ended December 31, 1998

                                Table of Contents

PART I                                                                     Page

Item 1.             Description of Business                                  3

Item 2.             Description of Property                                  5

Item 3.             Legal Proceedings                                        5

Item 4.             Submission of Matters to a Vote of
                    Security Holders                                         5

Part II

Item 5.             Market for Common Equity and Related
                    Stockholder Matters                                      5

Item 6.             Management's Discussion and Analysis
                    or Plan of Operation                                     6

Item 7.             Financial Statements                                     8

Item 8.             Changes in and Disagreements with
                    Accountants on Accounting and Financial
                    Disclosures                                              9
Part III

Item 9.             Directors, Executive Officers, Promoters
                    and Control Persons; Compliance with
                    Section 16(a) of the Exchange Act                        9

Item 10.            Executive Compensation                                  10

Item 11.            Security Ownership of Certain Beneficial
                    Owners and Management                                   11

Item 12.            Certain Relationships and Related
                    Transactions                                            12

Part IV

Item 13.            Exhibits and Reports on Form 8-K                        13

                    Signatures                                              14


                                       2
<PAGE>


                                     PART I

                         ITEM 1. Description of Business

Summary and Development of the Company

         Sooner Holdings, Inc., an Oklahoma corporation (hereinafter referred to
as the  "Company")  was  formed  in 1986 to  enter  the  in-home  soda  fountain
business.  Subsequently,  the Company  evolved into a  multi-subsidiary  holding
company in diverse businesses. From 1993 when the Company was restructured until
June  1998 the  Company  was  seeking  acquisitions.  In June  1998 the  Company
acquired,  through its subsidiary New Directions  Acquisition  Corp., the assets
and certain liabilities of New Direction Centers of America,  L.L.C. and entered
the minimum security correctional business.

         The  Company   currently   operates   primarily   through  two  of  its
subsidiaries,  New Directions  Acquisition Corp. ("NDAC") and Charlie O Business
Park Incorporated ("CO Park").  These  subsidiaries and a brief summary of their
businesses follows:

NDAC
----

         NDAC owns and operates a minimum  security  correctional  facility (the
"Correctional  Business") for women located in Oklahoma City, Oklahoma. NDAC was
formed in 1997 as a wholly owned  subsidiary of the Company and began operations
upon its  acquisition in June 1998 of the assets and certain  liabilities of New
Direction  Centers of  America,  L.L.C.  ("NDLLC"),  an  Oklahoma-based  private
correctional business.

CO Park
-------

         CO Park operates a multi-unit rental property (the "Business Park") for
business and  industrial  tenants  located in Oklahoma City,  Oklahoma.  CO Park
became an  operating  subsidiary  upon its  formation  in March 1991 and is 100%
owned by the Company.

         The Company also owns 100% of SD Properties,  Inc. ("SDPI") and 100% of
Charlie O Beverages,  Inc. ("CO  Beverages").  During fiscal 1997 and early 1998
the Company  discontinued the two substantially  inactive businesses operated by
these two subsidiaries.

Business Description

The Correctional Business
-------------------------

         NDAC entered the minimum-security correctional business in June 1998 by
acquiring the assets and certain  liabilities of NDLLC. NDAC owns and operates a
minimum-security  correctional  facility,  which currently houses 140 inmates in
Oklahoma City, Oklahoma. 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 secure environment.  Offenders
in minimum-security  correctional  facilities are typically allowed to leave the
facility to work in the  immediate  community  and/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.

         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.  NDAC
believes  that its  strategy of offering a wide variety of programs and services
will increase its marketing opportunities.

         As of March 15, 2000, NDAC operates one  correctional  facility with an
aggregate design capacity of 180 beds.


The Real Estate Business
------------------------

         CO Park operates as a real estate lessor and property manager and as of
March 15, 2000 leases to 23 non-related  lessees.  CO 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.  The
Company and its CO Beverages  subsidiary  currently operate out of approximately
9,000 square feet in this business park. CO Park competes with other  commercial
lessors in the Oklahoma City market. Its occupancy, excluding that leased to the
Company and its subsidiaries, has averaged over 80% during both 1998 and 1997.

                                       3
<PAGE>

The Discontinued Businesses
---------------------------

         SDPI,  until April 1997,  held an interest in a  beneficial  trust that
owned real estate lots in an Arizona  subdivision.  SDPI's net book value in the
beneficial trust was negative due to offsetting liabilities related to the trust
and the underlying lots. In April 1997, SDPI sold the interest in the beneficial
trust to a related party for $1.00 and the assumption of all liabilities plus an
agreement to share future profits, if any, with the Company. During 1995 to 1997
SDPI commenced a business that markets and services construction contracts. This
business did not develop after the initial contracts and was terminated in early
1998.

         CO Beverages operates the original in-home soda fountain business.  The
Company has been trying to sell CO Beverages as a going concern or liquidate the
assets  of this  business.  Therefore,  the  remaining  assets  of CO  Beverages
consisting of inventory and equipment have been written down to their  estimated
realizable  value. The Company hopes to sell CO Beverages as a going concern and
therefore,  realize  additional value for the extensive tooling and other assets
related to CO Beverages business.  These latter assets were written off in their
entirety during 1996.


General

         Seasonality. Due to its sale or planned sale of assets or entities, the
Company will not be subject to significant seasonality.

         Government  Regulation.  The Company's Correctional Business is subject
to federal,  state and local  regulations which are administered by a variety of
regulatory  authorities.  Generally,  providers of  correctional  services  must
comply  with a variety  of  applicable  federal,  state  and local  regulations,
including  education,  healthcare and safety regulations.  Management  contracts
frequently include extensive reporting requirements.  In addition, many federal,
state  and  local  governments  are  required  to  follow  competitive   bidding
procedures  before awarding a contract.  Certain  jurisdictions may also require
the successful  bidder to award  subcontracts  on a competitive bid basis and to
subcontract  to varying  degrees with  businesses  owed by women or  minorities.
Correctional contracts are generally renewed on a year to year basis.

         NDAC's failure to comply with any applicable laws, rules or regulations
or the loss of any required  license could have a material adverse effect on the
Company's financial condition, results of operations and liquidity. Further, the
current  and future  operations  of the  Company  may be  subject to  additional
regulations  as a result of new  statutes  and  regulations  and  changes in the
manner in which existing  statutes and  regulations are or may be interpreted or
applied. Any such additional regulations could have a material adverse effect on
the Company's financial condition, results of operations and li quidity.

         Warranties.  Due to its  planned  sale of assets in CO  Beverages,  the
Company  will not be subject  to  significant  warranty  exposure.  The  Company
maintains product liability insurance coverage.

         Marketing.  NDAC  views  governmental  agencies  responsible  for state
correctional facilities in the United States as its primary potential customers.

         Employees.  As of March 15,  2000,  the Company has only one  full-time
employee,  Mr. R.C.  Cunningham II, the Company's  President and Chairman of the
Board  ("Cunningham"),  and no part-time  employees.  The other  officers of the
Company do not spend full time on the Company's or its subsidiaries'  businesses
and are not compensated directly for their services.

         NDAC has 29 full-time and 6 part-time employees at March 15, 2000. NDAC
employs management,  administrative,  clerical, security,  educational services,
and general  maintenance  personnel.  NDAC through  subcontractors also provides
health care and food service.  All jurisdictions  require correction officers to
complete a specified amount of training prior to employment.

         When the need exists, the Company and/or its subsidiaries use temporary
employees or subcontractors to perform administrative services.

         Competition. The Correctional Business is highly competitive,  with few
barriers to entry. To the Company's  knowledge,  there are at least 17 companies
engaged in the management and operation of privatized correctional and detention
facilities.  NDAC's  competitors  include local companies with significant local
relationships  and  knowledge of local  conditions,  as well as  companies  that
manage and operate facilities in many states and abroad with financial resources
substantially greater than NDAC's.

         NDAC will have to compete on the basis of the cost,  quality  and range
of services offered,  its experience in managing  facilities,  the reputation of
its personnel,  and its ability to design, finance and construct new facilities.
NDAC also  attempts to achieve a  competitive  advantage  by seeking  additional
contracts  from  governmental  agencies  with which it has existing  contractual
relationships  and by  identifying  and marketing  its services to  correctional
agencies that have no previous experience with privatization services.

                                       4

<PAGE>

                         ITEM 2. Description of Property

         NDAC's  correctional  facility  consists  of three  buildings  totaling
approximately 44,000 square feet on 2.745 acres of real estate. This property is
located at 3115 N. Lincoln  Boulevard in Oklahoma City,  Oklahoma.  The facility
has a 180-bed capacity,  and as of March 15, 2000, the facility is 70% occupied.
This property is subject to a first mortgage.

         CO Park's industrial  business park property consists of five buildings
totaling  approximately  126,900 square feet on five acres of real estate.  This
property is located at the  Company's  address at the  intersection  of I-40 and
Agnew Street in Oklahoma City, Oklahoma. The Company and its subsidiaries occupy
approximately  9,000  square feet and the  remainder of the  industrial  park is
leased to 19  unrelated  lessees.  The lessees  generally  use the  property for
retail,  manufacturing  and light  industrial  operations.  CO Park's leases are
generally  for three to five years.  As of March 15, 2000,  excluding the square
footage leased to the Company and its affiliates,  the facility is 92% occupied.
This property is subject to a first mortgage.

         SDPI has no remaining real property, directly or indirectly,  after the
sale of the trust interest in April 1997. CO Beverages has no real property.


                            ITEM 3. Legal Proceedings

         There are no  pending or  threatened  legal  proceedings,  to which the
Company or any of its  subsidiaries is a party or of which any of their property
is the subject, except as follows:

         On  February 7, 1998 a lawsuit  was filed by David  Talbot,  one of the
owners of NDLLC,  against NDAC related to the purchase of the assets and certain
liabilities of NDLLC.  On January 18, 2000, a settlement was reached.  The terms
of the settlement include a payment of $76,000 by NDAC to Talbot.

         NDAC's  management of minimum  security  correctional  facilities  will
expose it to  potential  third-party  claims or  litigation  by inmates or other
persons for personal injury or other damages,  including  damages arising from a
disturbance  or  riot  at  a  Company-managed   facility.  In  addition,  NDAC's
management  contracts  generally require it to indemnify the governmental agency
against  any  damages  to  which  the  governmental  agency  may be  subject  in
connection with such claims or litigation.

         The Company's  Business Park operation  occasionally  has disputes with
tenants  regarding  its lease  agreements.  In the opinion of  management,  such
matters will be resolved  without  material  effect on the Company's  results of
operations or financial condition.

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

         In fiscal 1998,  there were no matters  submitted to a vote of security
holders  through the  solicitation  of proxies or otherwise.  The Company's last
meeting of shareholders was in 1996.

                                     PART II

                      ITEM 5. Market for Common Equity and

                           Related Stockholder Matters

Market information

         The Company's  common stock trades on the OTC Bulletin  Board under the
symbol "SOONE". The following table sets forth the range of the high and low bid
price for the  shares  of the  Company's  common  stock as  reported  by the OTC
Bulletin Board.

                                                                Low         High

Fiscal 1998:
   First quarter .................................             .250         .875
   Second quarter ................................             .375         .375
   Third quarter .................................             .375         .375
   Fourth quarter ................................             .031         .062

Fiscal 1999:
   First quarter .................................             .031         .062
   Second quarter ................................             .031         .062
   Third quarter .................................             .062         .062
   Fourth quarter ................................             .062         .080

Fiscal 2000:
   First quarter  (to March 15, 2000) ............             .062         .080

                                       5
<PAGE>

Shareholders

         As of March 15, 2000, the Company had 531 shareholders of record.  This
does not include  the holders  whose  shares are held in a  depository  trust in
"street" name. As of March 15, 2000,  1,108,827 shares (or approximately 13%) of
the  issued  and  outstanding  stock was held by  Depository  Trust  Company  in
"street" name.


Dividend information

         The  Company  has not paid or declared  any  dividends  upon its common
stock since its inception and, by reason of its present financial status and its
contemplated financial requirements, does not anticipate paying any dividends in
the foreseeable future.


                  ITEM 6. Management's Discussion and Analysis
                              or Plan of Operation

Background and Introduction

         Sooner Holdings, Inc., an Oklahoma corporation (hereinafter referred to
as the  "Company")  was  formed  in 1986 to  enter  the  in-home  soda  fountain
business.  Subsequently,  the Company  evolved into a  multi-subsidiary  holding
company in diverse businesses (see Item 1. "Description of Business" for further
discussion).  During  1996 and  early  1997 the  Company  narrowed  its focus to
Oklahoma real estate while seeking new business opportunities.  In June 1998 the
Company  acquired,  through its  subsidiary  New  Directions  Acquisition  Corp.
("NDAC"),  the  assets  and  certain  liabilities  of New  Direction  Centers of
America, L.L.C. and entered the minimum security correctional business.

Liquidity  and Capital  Resources - December  31, 1998  compared to December 31,
1997

         The  Company has had severe  liquidity  problems  for the last  several
years.  The  Company's  liquidity is  reflected in the table below,  which shows
comparative deficiencies in working capital at December 31:

                                                   1998                   1997
                                                   ----                   ----

Deficiency in working capital                  $(344,852)             $(863,925)
                                                ========                =======


         Although the  Company's  working  capital is negative,  the Company has
been able to meet its obligations as a result of the financial  support received
from certain of the Company's  related  parties.  The Company's  current working
capital,  which has been provided in the form of short and long-term  debt,  has
been  primarily  supplied  either  by Mr. R. C.  Cunningham  II,  the  Company's
Chairman of the Board and President ("Cunningham"), or by Aztore Holdings, Inc.,
a Phoenix,  Arizona-based  investment company  ("Aztore").  Aztore holds various
notes and  liabilities  against  the  Company  and has  agreed to  forebear  and
restructure a majority of these liabilities as part of the acquisition by NDAC.

         Exclusive of funds required for debt  repayment,  the Company  believes
that it can borrow any additional funds from its related parties to maintain its
operations, although there can be no assurance that such funds will be available
when  needed.  In the  event  that  the  Company  cannot  refinance,  or  obtain
forbearance on its current  liabilities or on its long-term  liabilities as they
come due, the Company 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 the Company's assets.

         In December 1998, the Company  borrowed  $35,000 from First  Enterprise
Bank  under a note  bearing  interest  at prime plus 3% per annum due on May 20,
1999. Proceeds of the borrowing were used to cure the default on the real estate
taxes payable on the Business Park. Accordingly, the Oklahoma Industrial Finance
Authority  ("OIFA") loan, which was in default due to the delinquent real estate
taxes, is now no longer in default and is recorded as notes payable.

         In June 1999, the Company  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.

Results of  Operations - The year ended  December 31, 1998  compared to the year
ended December 31, 1997

                                       6
<PAGE>
         The  following  table  illustrates  the  Company's  revenue mix.  Other
revenues  represent  revenues from the  discontinued  businesses (see discussion
under Item 1. "Description of Business"):

                                           1998                      1997
                                          Amount    %               Amount  %
                                          ------    -               ------  -

   CO Park revenues                    $   291,329  28           $ 325,328  75
   NDAC revenues                           743,957  72               -0-
   Other revenues                            4,158   *             107,121  25
                                        ----------                --------
                Total revenues         $ 1,039,444               $ 432,449
                                        ==========                ========

*less than 1%

         Total revenues increased by $606,995 or 140% in fiscal 1998. All of the
Company's revenue increase was related to the Company's NDAC subsidiary. In June
1998  the  Company,  acquired  through  NDAC  a  minimum  security  correctional
facility.  For the seven months from June 1998 to December 1998 the Correctional
Business generated $743,957 of total revenues.

         Business Park revenues  decreased $33,999 or 10% due to the loss of one
tenant in November 1997 that  accounted  for 21% of total  revenues for Business
Park.  However,  the lost  revenues  from the one tenant was offset by  revenues
generated  from the  renegotiated  leases  during 1997 from one year to three to
five year leases at an average increase of $.39 per square foot. At December 31,
1998,  the Business  Park was 80% occupied and the Company had a signed lease on
an additional  19,000 square feet or 15% of the total square footage.  Losses of
tenants in the future could affect  future  operations  and  financial  position
because of the cost of new leasehold  improvements and lower revenues due to any
prolonged  vacancy.  There  is no  assurance  the  Company  will  return  to its
historically high occupancy rate.

          Other  revenues  in  fiscal  1997  came  from  SDPI's  recognition  of
approximately $100,000 of deferred revenue related to the expiration of warranty
service  provided by SDPI for one year from  completion  of its 1996  contracts.
SDPI, a marketing  representative  for  construction  contractors,  ceased doing
business in early 1998.

         Total  operating  expenses  for the year ended  December  31, 1998 were
$1,035,374  as  compared to total  expenses  for the  comparable  1997 period of
$243,433.  This represents an increase of $791,941 in total  operating  expenses
for fiscal 1998 of which the NDAC  subsidiary  accounted  for $748,072 or 93% of
the increase.  The  amortization  of the NDAC  intangible  asset  resulted in an
increase in depreciation and  amortization  expense in 1998 of $113,000 over the
1997 period. In addition, general and administrative (G&A) expenses,  consisting
primarily  of  professional  and  management  fees,  also  increased  due to the
acquisition of the Correctional Business in June 1998.

         Other  income  in  1997  primarily   represents  the  sale  of  certain
securities  held by the  Company in  payment  of $39,000 in fees to Aztore.  The
Company's basis in these shares was nominal.

Going Concern and Management Plans

         The Company  has  suffered  recurring  losses  from  operations,  has a
shareholders'  deficit of  $558,867,  and has a working  capital  deficiency  of
$344,852.  These factors raise  substantial doubt about the Company's ability to
continue as a going  concern.  Realization  of a major  portion of the Company's
assets  is  dependent   upon  the  Company's   ability  to  meet  its  financing
requirements and the success of its future operations.

         The Company acquired a minimum security  correctional  facility in June
1998 and has implemented  plans to improve its liquidity and performance.  These
measures, among other items, include refinancing of long-term debt and reduction
of  operating  and  administrative  expenses.  Management  seeks to  expand  its
correctional  service  operations and believes that this segment will ultimately
result in future growth and profitability of the Company.

         In 1997,  Business Park initiated a program of bringing its lease rates
up to the  prevailing  market  rates.  As part of this  activity,  it  generally
extended  its lease  terms from one year to three to five years.  Business  Park
closed  eleven  of these new  leases  (32% of the total  square  footage)  at an
average  increase  of $.39  per  square  foot.  New  leases  were  increased  to
approximately  $3.22 per square foot to reflect  demand in the market as well as
improvements  included in the leases.  Business Park is actively seeking to rent
its vacant space at these higher rates.

         Management believes that these plans will be effective in improving the
Company's  profitability  and  working  capital  position  and will  provide the
Company the opportunity to continue as a going concern. However, there can be no
assurance that these plans will be successful.

                                       7
<PAGE>

Capital Expenditures and Commitments

         During  the  year  ended   December   31,  1998,   the  Company   spent
approximately  $180,000 on capital  expenditures  primarily related to leasehold
improvements  primarily at its  correctional  facility  operations.  The Company
expects to spend approximately $200,000 for capital expenditures,  primarily for
leasehold  improvements,  on its Business Park operations in the next 12 months.
In addition,  the Company  believes it needs  additional  capital to develop and
expand  into new  businesses.  Although  the amount of such  additional  capital
required is uncertain,  it is no doubt beyond that which would be expected to be
generated  from its  current  operations.  There  can be no  assurance  that the
Company will be able to obtain any such additional capital on satisfactory terms
if  at  all.  In  such  case,  the  Company's  expansion  will  be  limited  and
Cunningham's  and Aztore's  interest in  continuing to lend money to the Company
would  likely  cease.  This  lack  of  support  could  lead  to  foreclosure  or
bankruptcy.

 Factors That May Affect Future Results

         A number of  uncertainties  exist that may affect the Company's  future
operating results. These include the uncertain general economic conditions,  the
ongoing  support  of Aztore  and  Cunningham,  the  ability  of the  Company  to
refinance its short and long-term  liabilities on  satisfactory  terms,  and the
Company's  ability to acquire  sufficient  funding to sustain its operations and
develop new businesses. A majority of these issues directly or indirectly relate
to the Company's  ability to sell additional equity or obtain additional debt at
reasonable prices or rates, if at all. The Company and all its subsidiaries have
had unsuccessful  operating  histories and have been consistently  unprofitable.
The Company's competition would almost uniformly have more resources and capital
in general than the  Company.  If the Company  expands,  it will have to attract
satisfactory  operating personnel.  If the Company or any subsidiary experiences
any  substantial  reversal,  including  but not  limited to the areas  discussed
above, such entity may have to seek formal court protection from creditors.

Forward-Looking Statements

         Certain  statements and information  contained in this Report under the
headings "Description of Business" and "Management's  Discussion and Analysis or
Plan of Operation" concerning future,  proposed,  and anticipated  activities of
the Company,  certain  trends with respect to the Company's  revenue,  operating
results,  capital  resources,  and  liquidity  or with respect to the markets in
which  the  Company  competes  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 the
Company's control.  Accordingly,  actual results may differ, perhaps materially,
from those expressed in or implied by such forward-looking statements.


                          ITEM 7. Financial Statements

         The following financial  statements listed in the table below have been
prepared in accordance with the requirements of Item 310(a) of Regulation SB.

                                                                         Page
                                                                         ----

Report of Independent Certified Public Accountants                        F-1

Consolidated Balance Sheet at December 31, 1998                           F-2

Consolidated Statements of Operations for the fiscal
 years ended December 31, 1998 and December 31, 1997                      F-3

Consolidated  Statements  of  Shareholders'  Deficit
 for the fiscal years ended December 31, 1998 and
 December 31, 1997                                                        F-4

Consolidated  Statements  of Cash Flows for the
 fiscal  years ended  December  31, 1998 and
 December 31, 1997                                                        F-5

Notes to Consolidated Financial Statements                                F-6

                                       8
<PAGE>


               Report of Independent Certified Public Accountants

Board of Directors
Sooner Holdings, Inc.

We have audited the accompanying  consolidated balance sheet of Sooner Holdings,
Inc. and  Subsidiaries,  as of December 31, 1998,  and the related  consolidated
statements of  operations,  stockholders'  deficit,  and cash flows for the year
then ended.  These financial  statements are the responsibility of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the consolidated  financial position of Sooner Holdings,
Inc. and Subsidiaries,  as of December 31, 1998, and the consolidated results of
their  operations and their  consolidated  cash flows for the year then ended in
conformity with generally accepted accounting principles.

As  shown  in the  financial  statements,  the  Company  incurred  a net loss of
$465,278  during the year ended  December  31,  1998 and,  as of that date,  the
Company's  current  liabilities  exceeded its current assets by $344,852 and its
total liabilities  exceeded its total assets by $558,867.  These factors,  among
others, as discussed in Note A to the consolidated  financial statements,  raise
substantial  doubt about the Company's  ability to continue as a going  concern.
Management's  plans in regard to these matters are also described in Note A. The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.

GRANT THORNTON LLP


Oklahoma City, Oklahoma

December 18,  1999  (except for the first  paragraph  of Note L, as to which the
    date is January 18, 2000)

                                      F-1

<PAGE>


                              Sooner Holdings, Inc.

                           CONSOLIDATED BALANCE SHEET

                                December 31, 1998

                                     ASSETS

CURRENT ASSETS
  Cash and cash equivalents ....................................    $    76,792
  Accounts receivable, net of allowance of $2,362 ..............        137,139
  Other current assets .........................................         41,244
                                                                     ----------

              Total current assets .............................        255,175

PROPERTY AND EQUIPMENT, net ....................................      2,828,342

INTANGIBLE ASSETS, net of accumulated
  amortization of $113,607 .....................................      1,639,186

OTHER ASSETS ...................................................        254,941
                                                                     ----------

                                                                    $ 4,977,644
                                                                     ==========

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
  Accounts payable .............................................    $   142,821
  Accrued liabilities ..........................................        364,340
  Deferred revenue .............................................         33,882
  Current portion of notes and royalty payable .................         58,984
                                                                     ----------

              Total current liabilities ........................        600,027

NOTES PAYABLE, less current portion and
  net of discount of $425,667 ..................................      4,470,379

ROYALTY PAYABLE, less current portion and
  net of discount of $888,130 ..................................        432,915

OTHER LIABILITIES ..............................................         33,190

COMMITMENTS AND CONTINGENCIES ..................................           --

STOCKHOLDERS' DEFICIT
  Preferred stock - undesignated; authorized,
    10,000,000 shares;issued and outstanding, none .............           --
  Common stock - $.001 par value; authorized,
    100,000,000 shares;issued and outstanding,
    8,471,350 shares ...........................................          8,471
  Additional paid-in capital ...................................      5,532,907
  Accumulated deficit ..........................................     (6,100,245)
                                                                     ----------
                                                                       (558,867)
                                                                     ----------

                                                                    $ 4,977,644
                                                                     ==========

           The accompanying  notes are an integral part of this statement.

                                      F-2
<PAGE>

                              Sooner Holdings, Inc.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                             Year ended December 31,


                                                       1998             1997
                                                    ----------       ----------

Revenues

  Rental revenues ............................     $   291,329      $   432,449
  Service revenues ...........................         748,115             --
                                                    ----------       ----------

             Total revenues ..................       1,039,444          432,449

Expenses

  Cost of services ...........................         517,292            1,460
  General and administrative .................         318,757          181,945
  Depreciation and amortization ..............         199,325           60,028
                                                    ----------       ----------

             Total operating expenses ........       1,035,374          243,433
                                                    ----------       ----------

             Income from operations ..........           4,070          189,016

Other (income) expense .......................          57,972          (43,800)
Interest expense .............................         411,376          224,734
                                                    ----------       ----------
                                                       469,348          180,934
                                                    ----------       ----------

             NET (LOSS) INCOME ...............     $  (465,278)     $     8,082
                                                    ==========       ==========

Basic and diluted loss per common share

    Basic ....................................     $      (.06)     $      --
                                                    ==========       ==========

    Diluted ..................................     $      (.06)     $      --
                                                    ==========       ==========

    Weighted average common
      shares outstanding .....................       8,054,333        7,471,350
                                                    ==========       ==========

        The accompanying notes are an integral part of these statements.

                                      F-3
<PAGE>
<TABLE>
<CAPTION>

                              Sooner Holdings, Inc.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
                     Years ended December 31, 1998 and 1997


                                         Commmon stock          Additional      Common                         Total
                                     ------------------------     paid-in     stock to be    Accumulated    stockholders'
                                      Shares         Amount       capitol       issued         deficit        deficit
                                     ----------    ----------    ----------    ----------     ----------     ----------
<S>                                   <C>         <C>           <C>           <C>            <C>            <C>
Balance at January 1, 1997 ......     6,412,528   $     6,413   $ 5,456,612   $    42,353    $(5,643,049)   $  (137,671)

Net income ......................          --            --            --            --            8,082          8,082

Issuance of common stock ........     1,058,822         1,058        41,295       (42,353)          --             --
                                     ----------    ----------    ----------    ----------     ----------     ----------

Balance at December 31, 1997 ....     7,471,350         7,471     5,497,907          --       (5,634,967)      (129,589)

Net loss ........................          --            --            --            --         (465,278)      (465,278)

Issuance of common stock (note K)     1,000,000         1,000        35,000          --             --           36,000
                                     ----------    ----------    ----------    ----------     ----------     ----------

Balance at December 31, 1998 ....     8,471,350   $     8,471   $ 5,532,907   $      --      $(6,100,245)   $  (558,867)
                                     ==========    ==========    ==========    ==========     ==========     ==========
<FN>
         The accompanying notes are an integral part of this statement.
</FN>
</TABLE>

                                      F-4
<PAGE>
<TABLE>
<CAPTION>
                              Sooner Holdings, Inc.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             Year ended December 31,

                                                                            1998           1997
                                                                         ----------     ----------
<S>                                                                     <C>            <C>
Increase in Cash

Cash flows from operating activities
  Net (loss) income .................................................   $  (465,278)   $     8,082
  Adjustments to reconcile net (loss) income to net cash (used in)
    provided by operating activities
       Depreciation and amortization ................................       199,325         60,028
       Allowance for doubtful accounts ..............................          --            2,362
       Changes in assets and liabilities
         Accounts receivable ........................................       (50,526)        (1,293)
         Other current assets .......................................       (34,998)          (211)
         Accounts payable ...........................................       (78,618)        (4,035)
         Accrued liabilities and other liabilities ..................       341,512         84,567
         Deferred revenue ...........................................        31,049        (96,997)
                                                                         ----------     ----------

           Net cash (used in) provided by operating activities ......       (57,534)        52,503

Cash flows used in investing activities
  Purchase of property and equipment ................................      (179,172)        (8,875)

Cash flows from financing activities
  Borrowings on notes payable .......................................       817,783         13,500
  Repayments of notes payable .......................................      (466,767)       (55,295)
  Royalty payments ..................................................       (42,000)          --
                                                                         ----------     ----------

           Net cash provided by (used in) financing activities ......       309,016        (41,795)
                                                                         ----------     ----------

           NET INCREASE IN CASH .....................................        72,310          1,833

Cash at beginning of year ...........................................         4,482          2,649
                                                                         ----------     ----------

Cash at end of year .................................................   $    76,792    $     4,482
                                                                         ==========     ==========

Cash paid for interest ..............................................   $   272,814    $   182,885
                                                                         ==========     ==========


Supplemental Disclosure of Noncash Investing and Financing Activities

Sale of land for assumption of real estate liabilities and road trust
   improvements .....................................................   $      --      $     4,800
                                                                         ==========     ==========

Conversion of accrued liabilities to notes payable ..................   $    71,344    $    54,179
                                                                         ==========     ==========

Exchange of investments for reduction in notes payable ..............   $      --      $    39,000
                                                                         ==========     ==========

During the year ended December 31, 1998,  the Company  purchased a
  business with the following liabilities assumed:

    Assets acquired .................................................   $ 2,517,082
    Stock issued ....................................................        36,000
                                                                         ----------

                  Liabilities assumed ...............................   $ 2,481,082
                                                                         ==========
<FN>
        The accompanying notes are an integral part of these statements.
</FN>
</TABLE>

                                      F-5
<PAGE>

                              Sooner Holdings, Inc.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 1998 and 1997


NOTE A - ORGANIZATION AND OPERATIONS

    Sooner Holdings, Inc. ("Sooner" or the "Company"),  an Oklahoma corporation,
    through its  subsidiaries,  conducts  business  in two  primary  industries.
    Charlie O Business  Park  Incorporated  ("Business  Park") is engaged in the
    ownership  and rental of a business  park in Oklahoma  City,  Oklahoma.  New
    Directions  Acquisition  Corp.  ("NDAC") is a newly formed subsidiary of the
    Company  (see  Note  K)  which  operates  a  minimum  security  correctional
    facility. During the current year, management discontinued the operations of
    SD Properties, Inc. ("SDPI") and Charlie O Beverages, Inc. ("Beverage"), the
    effect of which was not material to consolidated operations. SDPI acted as a
    marketing  representative  for construction  contractors to develop business
    opportunities  for those  contractors for a fee, which sometimes  included a
    warranty coverage for mechanical contracting services.  Beverage was engaged
    in the  distribution  of an in-home soda fountain  appliance  which prepared
    carbonated beverages.

    The  accompanying  consolidated  financial  statements  have  been  prepared
    assuming that the Company will continue as a going concern.  The Company has
    suffered  recurring losses from operations,  has a stockholders'  deficit of
    $558,867,  and has a working  capital  deficiency of $344,852 as of December
    31, 1998. These factors raise  substantial doubt about the Company's ability
    to  continue  as a going  concern.  Management's  plans with regard to these
    matters are described below. The  consolidated  financial  statements do not
    include any adjustments relating to the recoverability and classification of
    asset carrying amounts or the amount and  classification of liabilities that
    might result should the Company be unable to continue as a going concern.

    Management Plans
    ----------------

    Realization of a major portion of the Company's assets is dependent upon the
    Company's ability to meet its financing  requirements and the success of its
    future  operations.  The Company  acquired a minimum  security  correctional
    facility  effective  June 1, 1998 and has  implemented  plans to improve its
    liquidity  and  performance.  These  measures,  among other  items,  include
    refinancing of long-term debt and reduction of operating and  administrative
    expenses. Management seeks to expand its correctional service operations and
    believes  that this  segment  will  ultimately  result in future  growth and
    profitability  of the Company;  however,  there is no  assurance  that these
    objectives can be achieved.

NOTE B - SUMMARY OF ACCOUNTING POLICIES

    A summary of the significant accounting policies consistently applied in the
    preparation of the accompanying consolidated financial statements follows.

    1.     Principles of Consolidation
           ---------------------------

    The  consolidated  financial  statements  include  the  accounts  of  Sooner
    Holdings, Inc. and its wholly owned subsidiaries.  All material intercompany
    accounts and transactions have been eliminated in consolidation.

    2.     Revenue Recognition
           -------------------

    The Company records rental revenue on a straight-line basis over the term of
    the underlying leases.

    Correctional  service  revenues are  recognized  as services  are  provided.
    Revenues  are earned  based upon the number of  offenders  per day times the
    contract rate.

    In  instances  where the Company  provides  warranty  services,  the Company
    records revenue on these contracts under the full deferral  method,  whereby
    all revenues are deferred and recognized on a  straight-line  basis over the
    contract term. Costs  associated with performance  under these contracts are
    charged to expense as incurred.

    3.     Cash and Cash Equivalents
           -------------------------

    The Company  considers  money  market  accounts  and all highly  liquid debt
    instruments  purchased  with a maturity  of three  months or less to be cash
    equivalents.

                                      F-6
<PAGE>
    4.     Accounts Receivable
           -------------------

    The Company considers accounts  receivable from service revenues of $133,286
    to be fully collectible;  accordingly, no allowance for doubtful accounts is
    required.  If  amounts  become  uncollectible,   they  will  be  charged  to
    operations  when  that  determination  is made.  An  allowance  of $2,362 is
    provided for other accounts receivable.

    5.     Property and Equipment
           ----------------------

    Property and equipment is stated at cost. Depreciation is provided using the
    straight-line method over the estimated useful lives of five to forty years.
    Maintenance, repairs, and renewals, which do not materially add to the value
    of an asset or  appreciably  prolong  its life,  are  charged  to expense as
    incurred.

    The Company  reviews  long-lived  assets for impairment  whenever  events or
    changes in circumstances  indicate that the carrying amounts of an asset may
    not be recoverable.  In the opinion of management, no such events or changes
    in circumstances have occurred.

    6.     Intangible Assets
           -----------------

    Intangible  assets  consist  of  contract  rights  which  resulted  from the
    business  acquisition  (see Note K). These rights are being amortized by the
    straight-line  method  over nine  years.  Amortization  expense for the year
    ended December 31, 1998 was $113,607 ($0 for 1997).

    7.     Other Assets
           ------------

    Other assets consist of unamortized  loan commitment fees and investments in
    certificates of deposit ("CDs"),  carried at cost, which approximates market
    value. The loan commitment fees are amortized using the straight-line method
    over  the  life of the  loan,  which  does not  differ  materially  from the
    effective interest method. The investment in CDs is pledged as collateral on
    the mortgage payable and is unavailable for current operations.

    8.     Discount on Notes and Royalty Payable
           -------------------------------------

    Discounts  on  notes  and  royalty  payables  resulting  from  the  business
    acquisition  (see  Note K) are being  amortized  by the  effective  interest
    method over the term of the underlying obligation.

    9.     Income Taxes
           ------------

    The  Company  provides  for  deferred  income  taxes  on  carryforwards  and
    temporary  differences  between  the bases of  assets  and  liabilities  for
    financial  statement and tax reporting purposes.  Additionally,  the Company
    provides a  valuation  allowance  on  deferred  tax assets if,  based on the
    weight of available  evidence,  it is more likely than not that some portion
    or all of the deferred tax assets will not be realized.

    10.    Fair Value of Financial Instruments
           -----------------------------------

    The Company  estimates the fair value of its monetary assets and liabilities
    based upon existing  interest  rates related to such assets and  liabilities
    compared to current rates of interest for instruments  with a similar nature
    and degree of risk. All of the Company's financial  instruments are held for
    purposes other than trading. The Company believes that the carrying value of
    all of its monetary  assets and  liabilities  approximates  fair value as of
    December 31, 1998.

    11.    Loss Per Common Share
           ---------------------

         Basic loss per share has been computed on the basis of weighted average
         common shares outstanding during each period. Diluted loss per share is
         the same as basic  loss per  share as the  Company  has no  outstanding
         dilutive potential common shares.

    12.    Use of Estimates
           ----------------

    The  preparation  of  financial  statements  in  conformity  with  generally
    accepted  accounting  principles  requires  management to make estimates and
    assumptions   that  affect  certain   reported   amounts  and   disclosures;
    accordingly, actual results could differ from those estimates.


                                      F-7
<PAGE>

    13.    Reclassifications
           -----------------

    Certain reclassifications have been made to the 1997 financial statements to
    conform to the 1998 presentation.


NOTE C - PROPERTY AND EQUIPMENT

    Property  and  equipment  as of  December  31,  1998  is  comprised  of  the
    following:

                                                      Useful life

      Land ...................................             --         $1,311,400
      Buildings and improvements .............            12-40        1,897,988
      Machinery and equipment ................             5-12           95,192
      Vehicles ...............................               5            42,531
                                                                       ---------
                                                                       3,347,111
    Less accumulated depreciation ............                           518,769
                                                                       ---------

                                                                      $2,828,342
                                                                       =========

    Depreciation  expense  totaled  $84,289  and  $58,528  for the  years  ended
    December 31, 1998 and 1997, respectively.

NOTE D - OTHER ASSETS

    Other assets as of December 31, 1998 are comprised of the following:

      Loan commitment fee ................................              $ 27,941
      Certificates of deposit ............................               227,000
                                                                         -------

                                                                        $254,941
                                                                         =======

    Amortization  expense  totaled  $1,500 for the years ended December 31, 1998
    and 1997.

NOTE E - NOTES PAYABLE

    Notes payable as of December 31, 1998 consist of the following:

       Installment note payable to bank,  interest at bank's
       prime  (7.75%)  plus  3%  per  annum,  principal  due
       September  20,  2000,  guaranteed  by a  stockholder,
       officer, and director; collateralized by real estate;
       paid off during  1999 as part of debt  refinancing             $  922,556

       Notes payable to related  parties,  interest  ranging
       from 10% to 15% per annum,  payable  on demand  after
       January  1,  2000  (see  Note  I);   uncollateralized           1,074,042

       Oklahoma  Industrial Finance Authority ("OIFA") loan,
       variable interest and payments due monthly,  maturing
       August 1, 2004,  with  interest  at 3% per annum over
       OIFA's  cost of  capital,  not to fall  below  10% or
       exceed 14% (cost of capital was 10% on  December  31,
       1998),  guaranteed  by a  stockholder,  officer,  and
       director;   collateralized   by   real   estate   and
       equipment;  paid  off  during  1999  as  part of debt
       refinancing                                                       399,176

       Installment note payable to bank,  interest at bank's
       prime  (7.75%)  plus 3% per annum,  due May 20, 1999,
       guaranteed by a stockholder,  officer,  and director;
       collateralized  by real estate;  paid off during 1999
       as part of debt refinancing                                       264,343

       Note payable to individuals, no stated interest rate,
       due on demand;  collateralized  by real estate;  paid
       off during 1999 as part of debt refinancing                       139,090

       Note payable to bank,  payments of interest  only due
       monthly,  interest at bank's prime  (7.75%) plus .5%,
       guaranteed by a stockholder,  officer,  and director,
       due  September  1, 1999;  uncollateralized;  paid off
       during 1999 as part of debt refinancing                            98,800

                                      F-8
<PAGE>

       Note payable to bank,  payments of interest  only due
       quarterly,   interest   at  bank's   prime   (7.75%),
       guaranteed by a stockholder,  officer,  and director,
       due  September  1, 1999;  uncollateralized;  paid off
       during 1999 as part of debt refinancing                            40,233

       Note payable to bank, payable in monthly installments
       of $500, interest at bank's prime (7.75%) plus 1% per
       annum,   due  June  24,   1999;   collateralized   by
       inventory;  paid  off  during  1999  as  part of debt
       refinancing                                                         7,294

       Balloon promissory note payable to related party (see
       Note I), 10% stated interest per annum, 15% effective
       interest  rate,  principal  and  interest due June 1,
       2001; collateralized by a second mortgage on land and
       facility  owned by the  Company,  net of  discount of
       $425,667                                                          905,333

       Note payable to bank, interest at New York prime plus
       2%,  due April 20,  1999;  collateralized  by a first
       mortgage on land and  facility  owned by the Company;
       refinanced  during 1999,  new maturity April 20, 2000             584,170

       Other notes payable to banks,  interest rates ranging
       from 9.5% to 9.75%,  principal  and  interest  due in
       January 1999; collateralized by vehicle                            54,029

       Revolving  line of credit  with  Bank  One,  interest
       payable  monthly at 3.25%  over  bank's  prime  rate,
       principal payable May 2005;  uncollateralized                      35,342
                                                                       ---------
                                                                       4,524,408
         Less current portion                                             54,029
                                                                       ---------

                                                                      $4,470,379
                                                                       =========

       The Company is in violation of certain of its  covenants  under
       its debt  agreement  to  OIFA.  This  violation  is an event of
       default as defined in the loan agreement with OIFA,  which made
       the debt  callable  at the  option of OIFA.  During  1999,  the
       Company  refinanced  the loan to OIFA and  several of the above
       notes payable that were due to mature during 1999.  These notes
       were replaced by a single note payable to a bank (8.8% interest
       rate) that  matures in June 2009.  Accordingly,  these  amounts
       have been classified as noncurrent.

    Aggregate  future  maturities  of debt at December  31,  1998,  after giving
    consideration to the 1999 refinancing, are as follows:

           Year ending December 31
             1999                                           $   54,029
             2000                                            2,595,442
             2001                                            1,347,471
             2002                                               18,002
             2003                                               55,017
             Thereafter                                        880,114
                                                             ---------
                                                             4,950,075

             Less amount representing discount on debt         425,667
                                                             ---------

                                                            $4,524,408
                                                             =========

NOTE F - ROYALTY PAYABLE

    As a part of the business  acquisition  (see Note K), the Company  assumed a
    royalty payable to an individual.  The agreement calls for monthly  payments
    of the  greater of $6,000 or 6% of the total gross  monthly  income of NDAC.
    This agreement expires on April 30, 2017. Future minimum payments under this
    agreement total  $1,326,000.  A discount of $934,260 was imputed at the date
    of purchase by management  using a 15% interest rate.  Interest  expense for
    the year ended December 31, 1998 was $28,130.

                                      F-9
<PAGE>

    Aggregate  future  principal  maturities of royalty  payable at December 31,
    1998 are as follows:

           Year ending December 31
             1999                                 $    4,955
             2000                                      5,752
             2001                                      6,677
             2002                                      7,750
             2003                                      8,996
             Thereafter                              403,740
                                                     -------
                                                     437,870
             Less current portion                      4,955
                                                    --------
                                                   $ 432,915
                                                    ========


NOTE G - STOCKHOLDERS' DEFICIT

    Preferred Stock
    ---------------

         The  Company's   authorized  capital  includes   10,000,000  shares  of
         preferred  stock,  undesignated as to par value. The Board of Directors
         of the Company, in its sole discretion, may establish par value, divide
         the shares of preferred  stock into series,  and fix and  determine the
         dividend rate, designations,  preferences,  privileges,  and ratify the
         powers,  if any, and determine the restrictions and  qualifications  of
         each series of preferred stock as  established.  No shares of preferred
         stock have been issued by the Company as of December 31, 1998.

    Employee Stock Option Plan
    --------------------------

    The Company has a stock option plan ("1995 Plan") for  directors,  officers,
    key employees,  and consultants  covering 2,000,000 shares of Company common
    stock.  Options granted under the 1995 Plan may be either  "incentive  stock
    options",  as defined in  Section  422A of the  Internal  Revenue  Code,  or
    "nonqualified stock options",  subject to Section 83 of the Internal Revenue
    Code,  at the  discretion  of the Board of Directors and as reflected in the
    terms of the written  option  agreement.  The option price shall not be less
    than 100% (110% if the option is  granted to a  stockholder  who at the time
    the option is granted  owns  stock  representing  more than 10% of the total
    combined  voting  power of all classes of stock of the  Company) of the fair
    market  value of the  optioned  common  stock on the  date the  options  are
    granted.  Options become exercisable based on the discretion of the Board of
    Directors  but must be exercised  within ten years of the date of grant.  No
    options have been granted under the 1995 Plan as of December 31, 1998.

NOTE H - INCOME TAXES

    Due to net losses, no provision for income taxes was necessary for the years
    ended December 31, 1998 or 1997.

    The Company's  effective income tax rate differed from the federal statutory
    rate of 34% as follows:

                                                      1998              1997
                                                   -----------       ----------

       Income taxes at federal statutory rate      $  (158,194)     $     2,748
       Change in valuation allowance                   200,011              -
       Nondeductible expenses                              970              30
       State income taxes at statutory rate            (26,055)             453
       Other                                           (16,732)          (3,231)
                                                    ----------       ----------

                      Total tax expense            $      -         $      -
                                                    ==========       ==========

                                      F-10
<PAGE>

    Components of deferred taxes are as follows at December 31, 1998:

       Assets

         Property and equipment                   $    59,482
         Inventories                                   37,626
         Intangible assets                            160,126
         Tax loss carryforward                      1,661,588
         Valuation allowance                       (1,813,775)
                                                   ----------
                                                      105,047

       Liabilities
         Royalty payable and accrued liabilities     (105,047)
                                                   ----------

                   Total                          $    -
                                                   ==========

    The valuation  allowance  increased $200,011 for the year ended December 31,
    1998.

    A valuation  allowance  for deferred tax assets is required  when it is more
    likely than not that some portion or all of the deferred tax assets will not
    be realized.  The ultimate realization of this deferred tax asset depends on
    the Company's ability to generate  sufficient  taxable income in the future.
    Management  believes it is more likely than not that the  deferred tax asset
    will not be realized by future operating results.

    At December 31, 1998, the Company has net operating loss  carryforwards  for
    tax purposes of approximately  $4,403,236 which will expire between 2003 and
    2018.

NOTE I - RELATED PARTY TRANSACTIONS

         Aztore Holdings, Inc. and Affiliates
         ------------------------------------

         The Company has an advisory  agreement with Aztore  Holdings,  Inc. and
         affiliates  ("Aztore")  wherein Aztore acts as the Company's  financial
         advisor.  Aztore  receives  an annual fee equal to 5% of the  Company's
         gross revenues,  as defined in the advisory  agreement.  This agreement
         was  terminated  on January 1, 1999.  Total fees of $52,267 and $21,763
         have been  recorded  pursuant  to this  agreement  for the years  ended
         December 31, 1998 and 1997, respectively. Aztore owns approximately 12%
         of the Company's common stock.

    In August 1997,  Aztore accepted  certain  securities held by the Company in
    payment of $39,000 in fees. The Company's  basis in these shares was nominal
    and the gain for such transaction was recognized as other income.

    In April 1997,  SDPI  consummated a lot sale agreement and sold its interest
    in a land  trust to  Aztore  for $1 and the  assumption  of all  liabilities
    related to the land (road improvement and real estate tax liabilities).  The
    Company  receives  10% of net  cash  flows,  as  defined  in  the  lot  sale
    agreement, from any future lot sales.

    Talbot Investment Co.
    ---------------------

    Talbot  Investment  Co.  ("Talbot")  is  an  Oklahoma  City,  Oklahoma-based
    commercial real estate brokerage firm. David B. Talbot, Jr. is the principal
    agent for Talbot. Talbot was the secretary and a director of the Company and
    Business Park until July 1997.  Talbot  handled all the property  management
    services for Business Park and received normal and customary commissions and
    fees for providing these  services.  Expenses of $27,103 related to services
    provided  by Talbot  have been  recorded  in the  accompanying  consolidated
    financial  statements  for the year ended  December 31,  1997.  This service
    arrangement  terminated at the end of 1997. Talbot owns  approximately 3% of
    the Company's common stock.

         Employment Contract
         -------------------

         The Company has an incentive  compensation agreement with its president
         and  chairman.  Under the  agreement,  he earns a cash fee of 5% of the
         Company's  gross  revenues,   payable  on  a  quarterly  basis.   Total
         compensation of $52,267 and $21,763 have been recorded pursuant to this
         agreement for the years ended December 31, 1998 and 1997, respectively,
         in the accompanying  consolidated financial statements.  This agreement
         was terminated on January 1, 1999.

                                      F-11
<PAGE>

New Directions Centers of America LLC
-------------------------------------

    As a part of the  business  acquisition  (see Note K), the Company  issued a
    note payable to New  Directions  Centers of America LLC  ("NDLLC")  which is
    owned partially (24%) by the Company's president and chairman.

    Management Agreement
    --------------------

    The management of the operation of its acquired facility is subcontracted to
    C&R Investments LLC ("CRI").  The owner of CRI owns  approximately 3% of the
    Company's  common stock.  Fees paid to CRI under this  management  agreement
    totaled $35,000 for the year ended December 31, 1998.

         Related Party Obligations
         -------------------------

         The  following  table  reflects  amounts owed to related  parties as of
         December 31, 1998:

                                                                Accounts payable
                                                Notes payable,     and accrued
                                                     net          liabilities

         President and chairman              $   730,042          $  46,862
         Aztore                                  314,217            110,719
         CRI                                      29,783                -
         NDLLC                                   905,333             58,333
         Talbot                                      -               83,452
                                              ----------           --------

            Total related party
              liabilities                    $ 1,979,375          $299,366
                                              ==========           =======

    In addition, the president and chairman has personally guaranteed $1,725,108
    of the Company's notes payable (see Note E).

NOTE J - LEASES

         The Company's  subsidiary,  Business Park, leases  commercial  business
         sites  to  several  different  entities.   Minimum  future  rentals  on
         noncancelable leases are as follows at December 31, 1998:

                 1999                               $   408,588
                 2000                                   381,480
                 2001                                   363,480
                 2002                                   232,560
                 2003                                   138,000
                                                      ---------

                                                     $1,524,108
                                                      =========

NOTE K - BUSINESS COMBINATIONS

    The  Company  acquired  all of  the  assets  and  assumed  certain  specific
    liabilities  of NDLLC  and  Horizon  Lodges  of  America,  Inc.  ("Horizon")
    effective  June 1,  1998.  NDLLC and  Horizon  owned and  operated a minimum
    security  correctional  facility  for women.  The  acquisition  included the
    issuance of 1,000,000 shares of Company common stock, the issuance of a note
    payable, and assumption of certain liabilities.

    This business  combination  has been accounted for using the purchase method
    of accounting and the accompanying consolidated financial statements include
    the operations of this business subsequent to the date of acquisition.

    A summary of the purchase price at June 1, 1998 is as follows:

      Issuance of 1,000,000 share of common
        stock valued at $.036 per share                      $     36,000
      Issuance of balloon note payable (see Note E),
        net of discount of $456,000                               875,000
      Assumption of notes payable and other liabilities         1,154,342
      Assumption of royalty payable, net of
        discount of $934,260                                      451,740
                                                                ---------

                  Total purchase price                         $2,517,082
                                                                =========

                                      F-12
<PAGE>
    This purchase  price was allocated to the tangible and intangible net assets
    based on their  fair  values.  Approximately  $1,750,000  was  allocated  to
    contract rights acquired;  approximately  $450,000 was allocated to facility
    land,  building,  and  equipment;  approximately  $227,000 was  allocated to
    certificates of deposit;  and the remaining amount of approximately  $90,000
    was allocated to accounts  receivable and other assets.  The contract rights
    relate to an annually  renewable  contract  with the Oklahoma  Department of
    Corrections.  This  intangible  asset is being  amortized  over a  nine-year
    Period which is management's estimate of the expected life of the contract.

    The  following  summarized  pro  forma  unaudited  information  assumes  the
    acquisition had occurred on January 1, 1997:

                                                    Year ended December 31,
                                                 ---------------------------
                                                    1998              1997
                                                 ---------         ---------

       Revenues                                 $1,286,572        $1,363,445
                                                 =========         =========

       Net loss                                 $ (649,102)       $ (475,255)
                                                 =========         =========

       Loss per common share                    $     (.08)       $     (.06)
                                                 =========         =========

    The above  amounts  are based upon  certain  assumptions  which the  Company
    believes are reasonable.  The pro forma results do not necessarily represent
    results  which would have  occurred if the  business  combination  had taken
    place at the date and on the basis assumed above.

NOTE L - COMMITMENTS AND CONTINGENCIES

    During 1998,  a lawsuit was filed by Talbot (see Note I) against the Company
         related to the  purchase of NDLLC and  Horizon.  On January 18, 2000, a
         tentative settlement was reached. The terms of the settlement include a
         payment  of  $76,000  by  the   Company  to  Talbot   during   2000  as
         consideration for dropping all claims against the Company.  This amount
         is included in accrued liabilities at December 31, 1998.

    The  Company is 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 the  Company's  results of  operations  or
         financial condition.

NOTE M - SEGMENT INFORMATION

    The Company operates in the following two segments:  commercial  leasing and
    correctional  facility  operation.  During the year ended December 31, 1997,
    the Company  also had two  additional  segments:  an in-home  soda  fountain
    distribution  division  (Beverage)  and a division that acted as a marketing
    representative for construction  contractors (SDPI).  During 1998, these two
    divisions no longer meet the  criteria to be defined as a separate  segment.
    Information  concerning  the Company's  business  segments as of and for the
    years ended December 31 is as follows:

                                              1998           1997
                                           -----------    -----------

           Revenues
             Commercial leasing ........   $   291,329    $   325,328
             Correctional facility .....       748,115           --
             Beverage ..................          --            2,124
             SDPI ......................          --          104,997
                                            ----------     ----------

                        Total ..........   $ 1,039,444    $   432,449
                                            ==========     ==========

           Net (loss) income

             Commercial leasing ........   $   (26,398)   $     7,865
             Correctional facility .....      (240,810)          --
             Beverage ..................          --          (23,775)
             SDPI ......................          --           98,746
             Corporate .................      (198,070)       (74,754)
                                            ----------     ----------

                        Total ..........   $  (465,278)   $     8,082
                                            ==========     ==========
                                      F-13
<PAGE>

           Identifiable assets

             Commercial leasing ........   $ 2,309,596    $ 2,282,726
             Correctional facility .....     2,662,992           --
             Beverage ..................          --           39,629
             SDPI ......................          --              597
             Corporate .................       448,845           --
             Eliminations ..............      (443,789)          --
                                            ----------     ----------

                        Total ..........   $ 4,977,644    $ 2,322,952
                                            ==========     ==========

           Depreciation and amortization

             Commercial leasing ........   $    48,454    $    43,361
             Correctional facility .....       134,204           --
             Beverage ..................        16,667         16,667
             SDPI ......................          --             --
             Corporate .................          --             --
                                            ----------     ----------

                        Total ..........   $   199,325    $    60,028
                                            ==========     ==========

           Capital expenditures

             Commercial leasing ........   $   112,427    $     8,875
             Correctional facility .....        66,745           --
             Beverage ..................          --             --
             SDPI ......................          --             --
             Corporate .................          --             --
                                            ----------     ----------

                        Total ..........   $   179,172    $     8,875
                                            ==========     ==========

           Interest expense

             Commercial leasing ........   $   187,103    $   177,195
             Correctional facility .....       176,683           --
             Beverage ..................            51           --
             SDPI ......................          --             --
             Corporate .................        47,539         47,539
                                            ----------     ----------

                        Total ..........   $   411,376    $   224,734
                                            ==========     ==========

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

NOTE N - SIGNIFICANT CUSTOMERS

    Business Park generates  revenue from tenants,  all of which occupy space in
    the same commercial complex in Oklahoma City,  Oklahoma.  As of December 31,
    1998, there were fifteen tenants. Rental revenue recorded from one tenant in
    Business Park  represented  16% of the Company's total revenues for the year
    ended December 31, 1997.

    The  Company  contracts  with  various  governmental   agencies  to  provide
    correctional  services.  The contracts  generally specify for the Company to
    provide correctional  services,  including complete residential services. As
    of December  31, 1998,  the Company had one  significant  contract  with the
    Oklahoma  Department  of  Corrections.  Compensation  paid to the Company is
    based on a per-person,  per-day basis. Revenues generated from this contract
    during  1998  comprised  72% of total  Company  revenues.  This  contract is
    renewable annually.

                                      F-14
<PAGE>
ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
                             FINANCIAL DISCLOSURES

          None.

                                    PART III
                ITEM 9. Directors, Executive Officers, Promoters
                      and Control Persons; Compliance with
                        Section 16(a) of the Exchange Act

Directors of Sooner Holdings, Inc.

         The current directors of the Company and their principal occupation are
listed  below.  R.C.  Cunningham  III is the  son of  R.C.  Cunningham  II,  the
president and chairman.  The following has been  furnished to the Company by the
respective  nominees for director.  The ownership amount and percent  represents
shares of the Company's  common stock  beneficially  owned by each of them as of
March 15, 2000:

                                                               Ownership (1)
                                                               -------------
                               Director  Principal          Amount     Percent
        Name            Age     Since    occupation
        ----            ---     -----    ----------         ------     -------

 R. C. Cunningham II    73     6/1/89   Chairman and
                                        President,
                                        Sooner
                                        Holdings, Inc.     4,717,413    55.69%

 Ron Alexander, Sr.     58              Vice President,
                                        New Directions
                                        Acquisition Corp.

 R.C. Cunningham III    35    7/3/97    Mortgage broker      72,129       *

*     less than 1%

(1)  The amount and percent of  ownership is based on the total shares of common
     stock outstanding of 8,471,350 shares as of March 15, 2000.

Directors of the Subsidiaries
                                  Principal                             Director
         Name           Age       occupation          Subsidiary         Since
         ----           ---       ----------          ----------         -----

 R. C. Cunningham II     73       Chairman and
                                  President, Sooner
                                  Holdings, Inc.       CO Park          6/1/89
                                                       SDPI            12/31/97
                                                       CO Beverages     6/1/89
                                                       NDAC             9/4/97

 R. C. Cunningham III    35       Mortgage broker,
                                  American Mortgage
                                  Bankers, Inc.        CO Park          7/3/97
                                                       SDPI            12/31/97
                                                       CO Beverages    12/31/97
                                                       NDAC             9/4/97

Resumes of Directors

         R. C. Cunningham II. Mr.  Cunningham has been the Chairman of the Board
and  President  of the Company  since June 1988 and of two of its  subsidiaries:
Charlie O Beverages,  Inc. and Charlie O Business Park Incorporated  since their
respective  inceptions.  Mr.  Cunningham has also been the Vice President of the
Company's subsidiary, SD Properties,  Inc. ("SDPI"), since February 1996 and the
President  since December,  1997.  From 1965 to 1986, Mr.  Cunningham was in the
construction  business  as CEO and  owner of  Rayco  Construction  Company.  Mr.
Cunningham  continues to serve as President of Midwest  Property  Management and
Service Co., Inc., a company involved in real estate property management.

         R. C.  Cunningham  III. Mr.  Cunningham  has been the  Secretary  and a
director of the Company since July 1997 and the Treasurer  since March 1998. Mr.
Cunningham  has also been the  Secretary of two of its  subsidiaries:  Charlie O
Beverages, Inc. and Charlie O Business Park Incorporated since July 1997 and the
Secretary and Treasurer of SDPI since December 1997 and of NDAC since  September
1997. From May 1988 to present, Mr. Cunningham has been continuously employed in
the mortgage  business as a loan officer with various  mortgage  companies.  Mr.
Cunningham has a BA Degree from the University of Oklahoma.

         Ronnie M.  Alexander,  57, became a director of the Company in 1999 and
has been President and Director of Operations of NDAC since 1996. His employment
background  includes various sales positions,  commercial real estate broker,and
retail management positions. Mr. Alexander holds a degree from the University of
Oklahoma.

                                       9
<PAGE>
Executive Officers, Promoters and Control Persons

         The current  executive  officers  of the Company as of March 15,  2000,
and/or its  subsidiaries  and their  positions  held in the  Company  and/or its
subsidiaries are listed in the table below. Officers are appointed by the Board.
R. C.  Cunningham  III is the son of R. C.  Cunningham  II,  the  president  and
chairman of the Company.

         Name            Age             Title                    Officer since
        ----            ---             -----                    -------------

R. C. Cunningham II     73     CEO and President,
                                Sooner Holdings, Inc.                6/1/88 *
                               CEO and President,
                                Charlie O Beverages, Inc.           6/16/89 *
                               CEO and President,
                                Charlie O Business
                                Park Incorporated                   3/15/91 *
                               President, SD Properties, Inc.        2/1/96
                                CEO and President, New
                                Directions Acquisition Corp.         9/4/97 *

Ron Alexander, Sr.      58     Vice President, New
                                Directions Acquisition Corp.         6/1/98

 R. C. Cunningham III    35     Secretary, Sooner Holdings, Inc.     7/3/97
                                Treasurer, Sooner Holdings, Inc.    3/31/98
                               Secretary and Treasurer,
                                Charlie O Beverages, Inc.            7/3/97
                               Secretary and Treasurer,
                                Charlie O Business
                                Park Incorporated                    7/3/97
                               Secretary and Treasurer,
                                SD Properties, Inc.                12/31/97
                               Secretary and Treasurer, New
                                Directions Acquisition Corp.         9/4/97 *

--------------------------
*        Date of inception of the respective companies.

Compliance with Section 16(a) of the Exchange Act

         Section 16(a) of the Exchange Act requires the  Company's  officers and
directors,  and  persons  who own  more  than 10% of a  registered  class of the
Company's equity securities, to file certain reports regarding ownership of, and
transactions  in, the  Company's  securities  with the  Securities  and Exchange
Commission (the "SEC").  Such officers,  directors and 10% stockholders are also
required by SEC rules to furnish the  Company  with copies of all Section  16(a)
forms that they file.

         Based solely on a review of the copies of such forms received by it, or
written  representations  from certain reporting  persons,  the Company believes
that during  fiscal 1998 all the reporting  persons  complied with Section 16(a)
filing requirements.


                         ITEM 10. Executive Compensation

         The  following  table  sets  forth  all cash  compensation  paid by the
Company to each of the executive  officers of the Company whose  aggregate  cash
compensation  exceeds  $60,000  and to all  executive  officers  as a group  for
services rendered during the fiscal year ended December 31, 1998:

       Name               Primary capacity in which served*     Compensation (1)
       ----               ---------------------------------     ----------------

R. C. Cunningham II (2)   Chairman of the Board and
                           President; Sooner Holdings, Inc.        $    -0-

R. C. Cunningham III      Secretary; Sooner Holdings, Inc.         $    -0-

Ron Alexander, Sr.        Vice President, New Directions
                           Acquisition Corp.                       $    -0-

All Executive Officers as a Group (3 persons)                      $    -0-

*        The executive  officers may serve in other  capacities with the Company
         and/or its subsidiaries (see Item 9. Executive Officers,  Promoters and
         Control Persons)

(1)      None  of  the   executive   officers  of  the  Company   received  cash
         compensation in excess of $60,000.  All cash is currently being used to
         permit  the  Company  to  operate  as a going  concern.  The  Board  is
         authorized  to reimburse  officers and  directors  for actual  expenses
         incurred  and set  compensation  for officers as funds for such purpose
         become available.

                                       10
<PAGE>
(2)      In  December  1993,  Mr.  Cunningham   entered  into  a  new  Incentive
         Compensation  Agreement,  which provides remuneration to Mr. Cunningham
         based  only  on  the  Company's  revenue  performance.  Mr.  Cunningham
         receives no base  compensation and will receive a cash incentive fee of
         5% of the Company's gross  revenues,  payable on a quarterly basis (see
         further  discussion under  "Relationship  with R. C. Cunningham"  under
         Item 12. Certain Relationships and Related Transactions).

Stock Option Plan

         Executive officers, employees and non-employee directors of the Company
and its subsidiaries may be awarded additional compensation pursuant to the 1995
Stock Option Plan (the "Plan").  Pursuant to the Plan,  2,000,000  shares of the
Company's common stock are reserved for issuance. Options granted under the Plan
are to be at amounts  that are equal to or greater than the fair market value of
the  Company's  common  stock at date of grant.  Each  outstanding  option has a
maximum  term of ten  years  and,  unless  otherwise  provided,  is  exercisable
immediately  upon  issuance.  As of March 15,  2000,  no options were granted or
outstanding.

 Bonuses and Deferred Compensation

         No cash  bonuses  were paid by the  Company  to any  executive  officer
during the year ended  December 31, 1998.  The Company did not have any deferred
compensation  plan or  arrangement  pursuant  to which  benefits,  remuneration,
value, or compensation was or is to be granted,  awarded, entered, set aside, or
accrued for the benefit of any  executive  officer of the Company as of December
31, 1998.

Compensation  Pursuant  to Plans  Including  Pension,  Stock  Option,  and Stock
Appreciation Rights Plans

         As of March 15, 2000,  other than the Company's 1995 Stock Option Plan,
the Company does not have any stock  appreciation  rights  plans,  phantom stock
plans, or any other incentive or  compensation  plan or arrangement  pursuant to
which benefits,  remuneration,  value, or compensation  was or is to be granted,
awarded, entered, set aside, or accrued for the benefit of any executive officer
of the Company.

Termination of Employment and Change of Control Arrangement

         During the year ended  December  31,  1998,  no officer,  director,  or
principal  shareholder  of the  Company  either  received  or is to receive  any
remuneration as a result of either the  termination of such person's  employment
whether by resignation,  retirement, or otherwise; or a change of control of the
Company or a change in such individual's  responsibilities following a change in
control of the Company.

                     ITEM 11. Security Ownership of Certain
                        Beneficial Owners and Management

         The table below sets forth certain information regarding the beneficial
ownership  of the  common  stock of the  Company  as of March  15,  2000 by each
shareholder who is known by the Company to be the beneficial  owner of more than
5% of the Company's  voting  securities,  by each director and by each executive
officer and by all directors and officers as a group.


                                               Number of
              Name and Address of               common           Percent
               Beneficial Owners               shares (1)        of Class
               -----------------               ---------         --------

           R. C. Cunningham II (5)
           2680 W. Interstate 40
           Oklahoma City, OK  73108            4,717,413          55.69%

           Sheldon L. Miller  (2)
           3000 Town Center, Ste. 1700
           Southfield, MI  48075                 502,718           5.93%

           Michael S. Williams (3) (6)
           3710 E. Kent Drive
           Phoenix, AZ  85044                  1,006,256          11.88%

           Lanny R. Lang (4)
           3536 E. Saltsage Drive
           Phoenix, AZ  85044                    729,183           8.61%

           R. C. Cunningham III (5)
           6408 Boulevard View
           Alexandria, VA  22307                  72,129            *

                                       11
<PAGE>
           Ron Alexander, Sr. (7)(8)
           2901 McGee Street
           Norman, OK  73072                     242,000           2.86%

           All officers and directors as
             a group (4 persons)               5,553,798          70.43%

*        less than 1%

         Unless otherwise indicated, to the Company's knowledge,  each person or
group possesses sole voting and sole investment power with respect to the shares
shown  opposite the name of such person or group.  Shares not  outstanding,  but
deemed  beneficially  owned by  virtue  of the  right of a person or member of a
group to acquire  them  within 60 days,  are  treated as  outstanding  only when
determining the amount and percent owned by such person or group.

(1)      The number of shares and  percent  are based on the  current  number of
         shares of common stock outstanding of 8,471,350 shares.

(2)      Mr. Miller owns  approximately  30% of Aztore,  which he received under
         that company's  bankruptcy plan, but has waived dispositive  control of
         shares owned by Aztore and, therefore, such shares are not included.

(3)      Includes  384,809  shares  owned by  Aztore of which  Mr.  Williams  is
         President  and CEO (see further  discussion  under  "Relationship  with
         Aztore Holdings, Inc." under Item 12. Certain Relationships and Related
         Transactions).

(4)      Includes  15,661  shares  of  common  stock  owned  by  Lang  Financial
         Services,  Inc.  of which Mr.  Lang is the  President  and sole  owner.
         Includes  384,809 shares owned by Aztore of which Mr. Lang is Secretary
         and Treasurer (see further  discussion under  "Relationship with Aztore
         Holdings,  Inc."  under  Item 12.  Certain  Relationships  and  Related
         Transactions).

(5)      An officer and director of the Company.

(6)      A director of the Company.

(7)      An officer of a subsidiary.

(8)      Includes  242,000  shares of common stock owned by C&R  Investments  of
         which Mr. Alexander is the President and sole owner.


             ITEM 12. Certain Relationships and Related Transactions

         The Company has adopted a policy that any transactions  with directors,
officers or entities of which they are also  officers or  directors  or in which
they have a financial  interest,  will only be on terms consistent with industry
standards and approved by a majority of the disinterested directors of the Board
and based  upon a  determination  that these  transactions  are on terms no less
favorable  to the Company  than those  which  could be obtained by  unaffiliated
third  parties.  This policy  could be  terminated  in the future.  In addition,
interested directors may be counted in determining the presence of a quorum at a
meeting of the Board or a committee thereof which approves such a transaction.

         The  following  are  transactions  considered  by  the  Company  to  be
significant of disclosure  pursuant to Regulation 228.404 of Regulation S-B. Any
references to Notes refer to the Notes to the Consolidated  Financial Statements
included in Item 7 of this Form 10-KSB (the "1998 10-KSB").

Relationship with Aztore Holdings, Inc. (formerly ShareData Inc.)

         In December 1993,  the Company  acquired SDPI in exchange for shares of
common  stock.  ShareData  was the  majority  shareholder  of SDPI and  received
887,753  shares or  approximately  17% of the  Company  after  the  transaction.
ShareData  emerged  from  Chapter  11  Bankruptcy  on  December  5, 1995 and was
required to distribute the common stock it owns of the Company to its creditors.
All shares were distributed accordingly except for 85,987 shares which could not
be  delivered to  ShareData's  creditors  and became the property of  ShareData.
Aztore became the successor to ShareData.  The Company has an Advisory Agreement
with Aztore to act as the Company's financial advisor. Aztore receives an annual
fee equal to 5% of the  Company's  gross  revenues,  as defined in the  Advisory
Agreement.

         In December  1996,  Aztore  accepted  358,822 shares of common stock in
settlement of a $14,000 note payable plus accrued interest, or $.04 per share.

         During 1997,  Aztore agreed to accept 260,000 shares of common stock of
AuctionTelevision  Network,  Inc. ("ATVN") owned by the Company as consideration
for payment of a $39,000 note payable, or $.15 per ATVN share.

                                       12
<PAGE>
Relationship with R.C. Cunningham II

         In December  1993, the Company  entered into an Incentive  Compensation
Agreement with Cunningham.  This agreement  provides  remuneration to Cunningham
based only on the Company's  revenue  performance.  Cunningham  receives no base
compensation, but will receive a cash incentive fee of 5% of the Company's gross
revenues  payable  on  a  quarterly  basis.  Also,   Cunningham  has  personally
guaranteed $1,690,778 of the Company's notes payable.

Relationship with C&R Investments

         C&R    Investments    L.L.C.    ("CRI"),    is   an   Oklahoma    City,
Oklahoma-investment firm. Mr. Ron Alexander, Sr. is the President and a director
of New Directions Acquisition Corp. (the "Correction  Business"),  a subsidiary,
since June 1998 and is the  managing  director for CRI.  The  management  of the
operation  of NDAC  is  subcontracted  to  CRI.  Fees  paid  to CRI  under  this
management  agreement  totaled $35,000 for the year ended December 31, 1998. CRI
owns approximately 3% of the Company's common stock.


                                     PART IV

                    ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

Exhibits

                                                                      Page no.
    Item No.                      Description                        (footnote)
    --------                      -----------                        ----------

 3.1 thru 3.3            Articles of Incorporation, By-Laws
                          and Amendments thereto                         (1)

 10.1 thru 10.11         Material contracts                              (1)

 10.12                   Option Agreement by and between Sooner
                          Holdings, Inc., New Directions
                          Acquisition Corp., New Direction
                          Centers of America, L.L.C., and Horizon
                          Lodges of America, Inc. dated
                          September 9, 1997                              (2)

 10.13                   Purchase and Sale Agreement
                          dated May 7, 1998                              (2)

 16.1                    Letter re: change in certifying accountant      (1)

 16.2                    Letter re: change in certifying accountant      (3)

 16.3                    Letter re: change in certifying accountant      (4)

 19.1 thru 19.6          Other agreements                                (1)

 22.1                    Subsidiaries of the registrant                  Ex-1

Footnotes:

(1)      Incorporated  by  reference to the  Company's  Form 10-KSB for the year
         ended December 31, 1995 (file no. 0-18344).
(2)      Filed as an  Exhibit to the  Company's  Form 8-K,  filed June 23,  1999
         (file no. 0-18344).
(3)      Filed as an Exhibit to the  Company's  Form  8-K/A,  filed May 11, 1999
         (file no. 0-18344).
(4)      Filed as an  Exhibit to the  Company's  Form 8-K,  filed June 16,  1999
         (file no. 0-18344).

Reports on Form 8-K

         The Company has filed no reports on Form 8-K during the fourth  quarter
of 1998.


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<PAGE>
                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Date:  March 15, 2000

                                        SOONER HOLDINGS, INC.
                                        ---------------------
                                            (Registrant)


                       By: R. C. Cunningham II
                       ---------------------------------------------------------
                           R.C. Cunningham II

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
registrant and in the capacities indicated.

        Signature                       Title                         Date
        ---------                       -----                         ----

                              Chairman of the Board, Chief
R. C. Cunningham II           Executive Officer and President        1/31/00
--------------------------                                        -------------
R. C. Cunningham II



R. C. Cunningham III          Secretary, Treasurer and Director      1/31/00
--------------------------                                        -------------
R. C. Cunningham III


Ben Alexander, Sr.            Director                               1/31/00
--------------------------                                        -------------
Ron Alexander, Sr.


                    SUBSIDIARIES OF THE REGISTRANT

          NAME OF SUBSIDIARY                          state of incorporation
          ------------------                          ----------------------

  Charlie O Business Park Incorporated                       Oklahoma
  New Directions Acquisition Corp.                           Oklahoma


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