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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-QSB



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(Mark One)

|x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------



For the quarterly period ended March 31, 2005



| ̈ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
|- | --------------------------------------------------------------------------



For the transition period from  to



Commission file number 04863



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SOUTHERN INVESTORS SERVICE COMPANY, INC.

(Name of small business issuer in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 74-1223691                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|2727 North Loop West, Suite 200, Houston, Texas                |  | 77008                               
|(Address of principal executive offices)                       |  | (Zip Code)                          



Issuers
telephone number (713) 869-7800





(Former name, former address and former fiscal year, if changed since last report)



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



APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS



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



APPLICABLE ONLY TO CORPORATE ISSUERS



State the number of shares outstanding of each of the issuers classes of common equity, as of the latest practicable date: 3,168,929 shares of Common Stock, $1.00 Par Value Per Share, outstanding as of May 11, 2005



Transitional Small Business Disclosure Format (Check
One):    Yes ̈;    No  x



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PART I - FINANCIAL INFORMATION



ITEM 1. FINANCIAL STATEMENTS



The financial statements included herein have been prepared by Southern Investors Service Company, Inc. (the Company), without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these financial statements be read
in conjunction with the financial statements and notes thereto included in the Companys latest annual report on Form 10-KSB. In the opinion of the management of the Company, all adjustments necessary to present a fair statement of the results
for the interim periods have been made.



As previously
disclosed in the Current Report on Form 8-K filed by the Company on April 12, 2005, on April 8, 2005, the Company filed a voluntary petition for relief under Chapter 11 with the United States Bankruptcy Court for the Southern District of Texas,
Houston Division (the Bankruptcy Court), Case # 05-35538-H4-11. On May 16, 2005, the Company submitted to the Bankruptcy Court a proposed disclosure statement styled Disclosure Statement for Plan of Distribution of Southern Investors Service
Company, Inc. (the Proposed Disclosure Statement), which included a proposed plan of liquidation (the Proposed Liquidation Plan). The Proposed Liquidation Plan calls for the disposition of the Companys remaining assets and the distribution of
all the net proceeds from the disposition to the Companys creditors. The financial statements have been prepared using the historical cost basis of accounting. Management of the Company believes the historical cost basis of accounting states
assets at no more than their liquidation values and states the Companys liabilities at their historical amounts. It is not presently determinable what amounts the creditors will agree to accept in settlement of the obligations due them. The
financial statements do not include any adjustments that might result from the outcome of this uncertainty.



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SOUTHERN INVESTORS SERVICE COMPANY, INC.

BALANCE SHEET

MARCH 31, 2005

(Thousands of Dollars)

(Unaudited)



|                                                                            |  |   |         |  
|--------------------------------------------------------------------------- |  | - | ------- | -
|ASSETS                                                                      |  |   |         |  
|Cash                                                                        |  | $ | 2,009   |  
|                                                                            | 
|Equity in Real Estate Joint Ventures, Net                                   |  |   | 286     |  
|                                                                            | 
|Notes Receivable and Other Assets                                           |  |   | 26      |  
|                                                                            |  |   |         |  
|Total assets                                                                |  | $ | 2,321   |  
|                                                                            |  |   |         |  
|LIABILITIES AND STOCKHOLDERS DEFICIT                                       |  |   |         |  
|Liabilities                                                                 |  |   |         |  
|Notes payable, matured                                                      |  | $ | 4,893   |  
|Accounts payable and accrued expenses                                       |  |   | 3,771   |  
|                                                                            |  |   |         |  
|Total liabilities                                                           |  |   | 8,664   |  
|                                                                            |  |   |         |  
|Commitments and Contingencies                                               |  |   |         |  
|                                                                            | 
|Stockholders Deficit                                                       |  |   |         |  
|Preferred stock, $1 par, 1,000,000 shares authorized, none issued           |  |   |        |  
|                                                                            | 
|Common stock, $1 par, 10,000,000 shares authorized, 3,281,331 shares issued |  |   | 3,281   |  
|Additional paid-in capital                                                  |  |   | 3,031   |  
|Retained deficit                                                            |  |   | (12,529 | )
|Less: treasury stock, 112,402 shares, at cost                               |  |   | (126    | )
|                                                                            |  |   |         |  
|Total stockholders deficit                                                 |  |   | (6,343  | )
|                                                                            |  |   |         |  
|Total liabilities and stockholders deficit                                 |  | $ | 2,321   |  
|                                                                            |  |   |         |  



The accompanying notes
are an integral part of this financial statement.



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SOUTHERN INVESTORS SERVICE COMPANY, INC.

STATEMENTS OF LOSS

(Thousands of Dollars, Except Share and Per Share Amounts)

(Unaudited)



|                                        |  |                              |           |   |      |   |           |  
|--------------------------------------- |  | ---------------------------- | --------- | - | ---- | - | --------- | -
|                                        |  | Three Months Ended March 31, |          
|                                        |  | 2005                         |           |   | 2004 |  
|Revenues                                |  | $                            | 3         |   |      | $ | 4         |  
|Operating Expenses                      |  |                              | (48       | ) |      |   | (48       | )
|                                        |  |                              |           |   |      |   |           |  
|Loss from Operations                    |  |                              | (45       | ) |      |   | (44       | )
|Interest Income                         |  |                              | 9         |   |      |   | 7         |  
|Interest Expense                        |  |                              | (77       | ) |      |   | (78       | )
|                                        |  |                              |           |   |      |   |           |  
|Net Loss                                |  | $                            | (113      | ) |      | $ | (115      | )
|                                        |  |                              |           |   |      |   |           |  
|Basic and Diluted Loss Per Common Share |  | $                            | (0.04     | ) |      | $ | (0.04     | )
|                                        |  |                              |           |   |      |   |           |  
|Average Number of Shares Outstanding    |  |                              | 3,168,929 |   |      |   | 3,168,929 |  
|                                        |  |                              |           |   |      |   |           |  



The accompanying notes
are an integral part of this financial statement.



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SOUTHERN INVESTORS SERVICE COMPANY, INC.

STATEMENTS OF CASH FLOWS

(Thousands of Dollars)

(Unaudited)



|                                                  |  |                              |       |   |      |   |       |  
|------------------------------------------------- |  | ---------------------------- | ----- | - | ---- | - | ----- | -
|                                                  |  | Three Months Ended March 31, |      
|                                                  |  | 2005                         |       |   | 2004 |  
|Cash Flows From Operating Activities:             |  |                              |       |   |      |   |       |  
|Net Loss                                          |  | $                            | (113  | ) |      | $ | (115  | )
|Change in assets and liabilities:                 |  |                              |       |   |      |   |       |  
|Increase in accounts payable and accrued expenses |  |                              | 57    |   |      |   | 78    |  
|                                                  |  |                              |       |   |      |   |       |  
|Net cash used in operating activities             |  |                              | (56   | ) |      |   | (37   | )
|                                                  |  |                              |       |   |      |   |       |  
|Net (Decrease) in Cash                            |  |                              | (56   | ) |      |   | (37   | )
|Beginning Cash                                    |  |                              | 2,065 |   |      |   | 2,138 |  
|                                                  |  |                              |       |   |      |   |       |  
|Ending Cash                                       |  | $                            | 2,009 |   |      | $ | 2,101 |  
|                                                  |  |                              |       |   |      |   |       |  



The accompanying notes
are an integral part of this financial statement.



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SOUTHERN INVESTORS SERVICE COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS



(1) Current Business Conditions



Southern Investors Service Company, Inc. (the Company) was incorporated under the laws of the State of Delaware in 1972. Prior to 1990, the Company was engaged in the ownership and development of real estate primarily in the Houston, Texas
area. The operations of the Company were significantly reduced during 1990, as a result of various debt settlements with lenders and other creditors. These settlements resulted in the transfer of substantially all of the Companys holdings to
its creditors. The Companys operations since 1990 have been limited to attempts to settle or restructure the Companys remaining liabilities. The Companys operations also included the management of residential developments and two
office buildings owned by others. During 1998, the majority of these residential projects were sold by the owners and therefore the Company no longer is managing these projects. Effective January 1, 1999, the Company ceased all management activity
and all employees related to this activity were terminated.



The Company determined in late 1999 that the sale of Lajitas (a resort property in west Texas), its sole remaining operating asset, would facilitate the Companys ability to settle its existing liabilities most favorably. As a result,
the Company retained the National Auction Group, Inc. (National Auction) to conduct an auction of Lajitas. The auction was conducted on February 24, 2000, and the property was sold for $3,950,000. The sale of the Lajitas property closed on May 2,
2000. During 2000, the Company realized a gain on the sale of Lajitas of $755,000 and received net cash proceeds of approximately $2.4 million, after the payment of a mortgage note related to the property sold.



The Company has attempted to use the net proceeds from the sale of Lajitas to
settle or restructure existing debt, of which approximately $4,893,000 (plus accrued interest) has matured and is currently past due, and to realize the carrying amount of its remaining assets. On March 26, 2002, the Board of Directors of the
Company determined that the best alternative to settle the Companys existing debt was to file a voluntary petition for relief under Chapter 11 (Chapter 11) of Title 11 of the United States Code (the Bankruptcy Code) with the United States
Bankruptcy Court. As previously disclosed in the Current Report on Form 8-K filed by the Company on April 12, 2005, on April 8, 2005, the Company filed a voluntary petition for relief under Chapter 11 with the United States Bankruptcy Court for the
Southern District of Texas, Houston Division (the Bankruptcy Court), Case # 05-35538-H4-11. The Bankruptcy Court held a creditors meeting on May 17, 2005 and has established a deadline for creditors to submit a proof of claim by August 15, 2005. On
May 16, 2005, the Company submitted to the Bankruptcy Court a proposed disclosure statement styled Disclosure Statement for Plan of Distribution of Southern Investors Service Company, Inc. (the Proposed Disclosure Statement), which included a
proposed plan of liquidation



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(the Proposed Liquidation Plan). The Proposed Liquidation Plan calls for the disposition of the Companys remaining
assets and the distribution of all the net proceeds from the disposition to the Companys creditors. The existing officers and directors of the Company will continue to oversee operation of the Companys business as a debtor in possession,
pursuant to sections 1107 and 1108 of the Bankruptcy Code, and subject to the requirements of the Bankruptcy Code, which include court approval of matters outside the ordinary course of business.



These financial statements have been prepared using the historical cost basis
of accounting. Management of the Company believes the historical cost basis of accounting states assets at no more than their liquidation values and states the Companys liabilities at their historical amounts. It is not presently determinable
what amounts the creditors will agree to accept in settlement of the obligations due them. These financial statements do not include any adjustments that might result from the outcome of this uncertainty. Accordingly, the Company believes the equity
of the Company has, and will continue to have, no value and that any Chapter 11 plan confirmed by the Bankruptcy Court will result in the elimination of the equity interests of all of the Companys stockholders. The Company anticipates that it
will take approximately nine months to complete its liquidation process; however, the Proposed Liquidation Plan is, and any and all other Chapter 11 plans that may be proposed will be, subject to obtaining all necessary approvals, including but not
limited to creditor votes and judicial determinations of confirmability. There can be no assurance, therefore, as to how long it may take to complete the Companys liquidation process.



(2) Summary of Significant Accounting Policies



The accompanying unaudited financial statements have been prepared in
accordance with the significant accounting policies included in the notes to the Companys latest annual report on Form 10-KSB. These financial statements should be read in conjunction with those notes.



(3) Commitments and Contingencies



During August, 2004 the Company was named as a defendant in a lawsuit filed
in the District Court of Montgomery County Texas, seeking the payment of delinquent property taxes of approximately $46,000. The lawsuit is in connection with land owned by a partnership in which the Company is a partner. Due to the recent filing of
the suit, the Company is unable to determine its potential liability, if any.



If the Company, in the light of its present circumstances, were required to make substantial cash expenditures in connection with future lawsuits and other claims, such expenditures would have a material adverse
effect on the Companys financial position.



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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION



Forward Looking Statements



This report contains forward looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact included in this section and elsewhere in this report are
forward looking statements and, although the Company believes that the expectations reflected in such forward looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. The Companys
business and financial results are subject to various risks and uncertainties, including the Companys ability to settle or restructure its remaining debt and other obligations and to generate positive cash flow to cover its operating expenses,
that may cause actual results to differ materially from the Companys expectations. The Company does not intend to provide updated information other than as otherwise required by applicable law. All subsequent written and oral forward looking
statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in this paragraph and elsewhere in this report.



Plan of Operation



The Company has attempted to use the net proceeds from the sale of Lajitas to settle or restructure existing debt, of which
approximately $4,893,000 (plus accrued interest) has matured and is currently past due, and to realize the carrying amount of its remaining assets. On March 26, 2002, the Board of Directors of the Company determined that the best alternative to
settle the Companys existing debt was to file a voluntary petition for relief under Chapter 11 with the Bankruptcy Court. As previously disclosed in the Current Report on Form 8-K filed by the Company on April 12, 2005, on April 8, 2005, the
Company filed a voluntary petition for relief under Chapter 11 with the United States Bankruptcy Court for the Southern District of Texas, Houston Division, Case # 05-35538-H4-11. The Bankruptcy Court held a creditors meeting on May 17, 2005 and has
established a deadline for creditors to submit a proof of claim by August 15, 2005. On May 16, 2005, the Company submitted to the Bankruptcy Court the Proposed Disclosure Statement, which included the Proposed Liquidation Plan. The Proposed
Liquidation Plan calls for the disposition of the Companys remaining assets and the distribution of all the net proceeds from the disposition to the Companys creditors. The existing officers and directors of the Company will continue to
oversee operation of the Companys business as a debtor in possession, pursuant to sections 1107 and 1108 of the Bankruptcy Code, and subject to the requirements of the Bankruptcy Code, which include court approval of matters outside the
ordinary course of business.



The financial statements have
been prepared using the historical cost basis of accounting. Management of the Company believes the historical cost basis of accounting states assets at no more than their liquidation values and states the Companys liabilities at their
historical amounts. It is not presently determinable what amounts the creditors will agree to accept in settlement of the obligations due them. The financial statements do not include any adjustments that might result from the outcome of this
uncertainty.



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Accordingly, the Company believes that the equity of the Company has, and will continue to have, no value
and that any Chapter 11 plan confirmed by the Bankruptcy Court will result in the elimination of the equity interests of all of the Companys stockholders. The Company anticipates that it will take approximately nine months to complete its
liquidation process; however, the Proposed Liquidation Plan is, and any and all other Chapter 11 plans that may be proposed will be, subject to obtaining all necessary approvals, including but not limited to creditor votes and judicial
determinations of confirmability. There can be no assurance, therefore, as to how long it may take to complete the Companys liquidation process.



Results of Operations



The Company reported a net loss of ($113,000) or ($0.04) per share for the quarter ended March 31, 2005 compared with a net loss of ($115,000) or ($0.04)
per share for the quarter ended March 31, 2004.



Revenues
primarily include the recognition of previously deferred gross profits from the sale of real estate. At the time of the sale, the Company chose to account for the income using the cost recovery method, and therefore recognizes income when the
receivables are collected.



The increase in interest income is
primarily due to higher interest rates during 2005.



Liquidity and Capital
Resources



As of March 31, 2005, the Company was
delinquent on notes payable and other long-term debt of approximately $4,893,000 and interest payments of $3,729,000. As of March 31, 2005, the Company had recorded accounts payable and accrued expenses (including interest) and other liabilities of
$3,771,000. Due to the sale of Lajitas, the Company has sufficient funds to pay its current general and administrative operating expenses; however, the Company is unable to repay its notes payable at the face amounts and the related accrued
interest.



In assessing the Companys liquidity, the
impact of income taxes has been considered. The Company does not expect its cash flow to be affected by income taxes in the foreseeable future because of its net operating loss carry forward.



The impact of inflation on the Company over the past several years has not
been material.



No major additions to property, plant and
equipment are currently anticipated.



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ITEM 3. CONTROLS AND PROCEDURES.



Evaluation of Disclosure Controls and Procedures



Based on their evaluation as of the end of the period covered by this report, the Companys Chief Executive Officer,
its President and Principal Executive Officer and its Senior Vice President  Finance and Principal Financial and Accounting Officer have concluded that the Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934) are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized
and reported within the time periods specified in Securities and Exchange Commission rules and forms.



Changes in Internal Control Over Financial Reporting



There was no change in the in the Companys internal control over financial reporting that occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the
Companys internal control over financial reporting.



PART II - OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS



As previously disclosed in the Current Report on Form 8-K
filed by the Company on April 12, 2005, on April 8, 2005, the Company filed a voluntary petition for relief under Chapter 11 with the United States Bankruptcy Court for the Southern District of Texas, Houston Division, Case # 05-35538-H4-11. The
Bankruptcy Court held a creditors meeting on May 17, 2005 and has established a deadline for creditors to submit a proof of claim by August 15, 2005. On May 16, 2005, the Company submitted to the Bankruptcy Court the Proposed Disclosure Statement,
which included the Proposed Liquidation Plan. The Proposed Liquidation Plan calls for the disposition of the Companys remaining assets and the distribution of all the net proceeds from the disposition to the Companys creditors. The
existing officers and directors of the Company will continue to oversee operation of the Companys business as a debtor in possession, pursuant to sections 1107 and 1108 of the Bankruptcy Code, and subject to the requirements of the Bankruptcy
Code, which include court approval of matters outside the ordinary course of business.



During August, 2004, the Company was named as a defendant in a lawsuit filed in the District Court of Montgomery County, Texas, seeking the payment of delinquent property taxes of approximately $46,000. The lawsuit is
in connection with land owned by a partnership in which the Company is a partner. Due to the recent filing of the suit, the Company is unable to determine its potential liability, if any.



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ITEM 2. UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS



None



ITEM 3. DEFAULT UPON SENIOR SECURITIES



None



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



None



ITEM 5. OTHER INFORMATION



Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, each of the Chief Executive Officer and the Senior Vice President  Finance and Principal Financial and Accounting Officer of the Company has certified that this report fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in this report fairly presents, in all material respects, the financial condition and results of operations of the Company.



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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



(a) Exhibits Required by Item 601 of Regulation S-B.



|     |  |                                                                                                                                  |  |                                                        
|---- |  | -------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------
|     |  | Exhibit                                                                                                                          |  | *Filed Herein or Incorporated by Reference from Exhibit
|3    |  | (a)    Certificate of Incorporation, as Amended, through June 6, 1989                                                            |  | 3(a) 1989 Form 10-K                                    
|     |  | (b)    Articles of Amendment to Certificate of Incorporation dated June 7, 1989                                                  |  | 3(b) 1989 Form 10-K                                    
|     |  | (c)    Articles of Amendment to Certificate of Incorporation dated May 21, 1993                                                  |  | 3(c) 1993 Form 10-K                                    
|     |  | (d)    Bylaws, as Amended, through date hereof                                                                                   |  | 3(d) June 30, 1989 Form 10-K                           
|     |  |                                                                                                                                 
|31.1 |  | Certification of Walter M. Mischer, Sr. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                |  | *                                                      
|     |  |                                                                                                                                 
|31.2 |  | Certification of Walter M. Mischer, Jr. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                |  | *                                                      
|     |  |                                                                                                                                 
|31.3 |  | Certification of Eric Schumann Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                         |  | *                                                      
|     |  |                                                                                                                                 
|32.1 |  | Certification Furnished Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |  | *                                                      
|     |  |                                                                                                                                 
|32.2 |  | Certification Furnished Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley of 2002     |  | *                                                      



(b) Reports on Form
8-K.



The Company filed no reports on Form 8-K
during the quarter ended March 31, 2004. On April 12, 2005, the Company filed with the Securities and Exchange Commission a Current Report on Form 8-K reporting the filing of the Companys Chapter 11 petition with the Bankruptcy Court.



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SIGNATURES



In accordance with the requirements 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.



SOUTHERN INVESTORS SERVICE COMPANY, INC./s/ Walter M. Mischer, Jr.WALTER M. MISCHER, JR.President - Principal Executive Officer/s/ Eric SchumannERIC SCHUMANNSenior Vice President - FinancePrincipal Financial and Accounting OfficerDATE: May 20, 2005