U. S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~September~~March 3031, ~~2013~~2014

For the transition period from ___ to ____.

Commission File Number 333-171842

Southern States Sign Company

(Exact name of small business issuer as specified in its charter)

Nevada	26-3014345
(State or other jurisdiction of	(I.R.S. employer
incorporation or organization)	identification number)

Viale Bruno Buozzi 83, Rome Italy

(Address of principal executive offices)

39.06.80692582

(Issuer’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨

Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No x

As of ~~November~~July 1217, ~~2013~~2014, there were 40,151,261 shares of the registrant’s common stock outstanding.

SOUTHERN STATES SIGN COMPANY

FORM 10-Q

For the Quarter Ended ~~September~~March 3031, ~~2013~~2014

Table of Contents

		Page
PART I FINANCIAL INFORMATION			1
Item 1.	Financial Statements		13
	Consolidated Balance Sheets as of September 30, 2013 and December 31, 2012		1
	Consolidated Balance Sheets as of March 31, 2014 and December 31, 2013		3
	Consolidated Statements of Operations for the Three and Nine Month Periods Ended September 30, 2013 and 2012		2
	Consolidated Statements of Operations for the Three Month Periods Ended March 31, 2014 and 2013		4
	Consolidated Statements of Stockholders’ Equity (Deficit) for the Nine Month Period Ended September 30, 2013		4
	Consolidated Statements of Stockholders’ Equity (Deficit) for the Three Month Period Ended March 31, 2013		5
	Consolidated Statements of Cash Flows for the Nine Month Periods Ended September 30, 2013 and 2012		5
	Consolidated Statements of Cash Flows for the Three Month Periods Ended March 31, 2014 and 2013		6
	Notes to Financial Statements		67
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		1718
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		25
Item 4.	Controls and Procedures		25
PART II OTHER INFORMATION			26
Item 1.	Legal Proceedings		26
Item 1A.	Risk Factors		26
Item 2.	Unregistered Sales of Securities and Use of Proceeds		26
Item 3.	Defaults Upon Senior Securities		26
Item 4.	Mine Safety Disclosures		26
Item 5.	Other Information		26
Item 6.	Exhibits		26
SIGNATURES			27

~~PART I – FINANCIAL INFORMATION~~2

PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements

SOUTHERN STATES SIGN COMPANY
CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2014 & DECEMBER 31, 2013

€’000	March 31,			December 31,
	2014 Unaudited			2013 Audited
ASSET
Current Assets:
Cash	€	414		€	728
Net receivables		1,903			1,986
Related parties receivables		18,921			18,804
VAT Tax receivables		1,239			1,324
Other current assets		1,274			1,270
Total current assets		23,751			24,112
Non - Current Assets:
Net properties, plant and equipment (Including Capital Leased properties € 31,807 and € 32,097, respectively)		58,117			58,375
Goodwill		1,541			1,541
Other non-current assets (Including Related Parties non-current receivables € 8,890 as of March 31, 2014 and December 31, 2013)		10,569			10,492

Total non - current assets		70,227			70,408

Total Assets	€	93,978		€	94,520
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Bank overdrafts	€	971		€	963
Current maturities of long term loans and capital leases		10,902			10,915
Trade payables		7,708			7,207
Related parties payables		6,935			6,609
Others current liabilities		2,223			2,652
Total current Liabilities		28,739			28,346
Non - current liabilities:
Long term loans and capital leases		36,340			36,581
Shareholder's loans		2,341			2,361
Other non-current liabilities		4,627			4,612
Total non - current Liabilities		43,308			43,554
Stockholders' Equity
Common stocks		27			27
Additional Paid in Capital		26,059			26,059
Retained earnings/(Accumulated loss)		(4,155	)		(3,466	)
Equity attributable to owners of Southern States Sign Company		21,931			22,620
Non-Controlling interests in the consolidated subsidiaries
Total Stockholders' Equity		21,931			22,620
Total Liabilities and Stockholders' Equity	€	93,978		€	94,520

SOUTHERN STATES SIGN COMPANY

CONSOLIDATED ~~BALANCE~~STATEMENTS ~~SHEETS~~OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2014 and 2013

~~AS OF SEPTEMBER 30~~€’000, ~~2013~~except &per ~~DECEMBER 31,~~share ~~2012~~amounts

€’000	September 30,			December 31,
	Three Months Ended
	2013 Unaudited			2012 Audited
	March 31,			March 31,
ASSETS
	2014			2013
Current Assets:
	Unaudited			Unaudited
Cash	€	88		€	441
Revenue from operations	€	1,768		€	840
Net receivables		4,735			4,701
Direct operating and selling, general and administrative costs
Related parties receivables		23,554			22,043
Direct operating costs		1,286			137
VAT Tax receivables		985			1.628
Selling, general and administrative costs		254			287
Other current assets		334			340
Amortization and depreciation		555			525
Available-for-sale assets		-			444
Total direct operating, selling, and administrative costs		2,095			949
Total current assets		29,696			29,597
Operating Profit/(Loss)		(327	)		(109	)
Non - Current Assets:
Interest income		130			103
Net properties, plant and equipment (Including Capital Leased properties € 35,416 and € 36,361 respectively)		66,915			68,727
Interest expenses		492			544
Goodwill		1,541			1,541
Profit/(Loss) from continuing operations, before income taxes		(689	)		(550	)
Other non-current assets (Including Related Parties receivables € 8,890 for 2013 and 2012)		10,622			10,535
Income taxes		-			-
Total non - current assets		79,078			80,803
Profit/(Loss) from continuing operations, net of income taxes		(689	)		(550	)
Total Assets	€	108,774		€	110,400
Net profit/(loss) from operations of discontinued operations, after taxes		-			8
LIABILITIES AND STOCKHOLDERS’ EQUITY
Net profit/(loss) on disposal of discontinued operations, after taxes		-			-
Current liabilities:
Net profit/(loss) from discontinued operations		-			8
Bank overdrafts	€	958		€	2,970
Consolidated net profit/(loss) for the period		(689	)		(542	)
Current maturities of long term loans and capital leases		13,232			11,196
Less net loss attributable to non-controlling interests in the consolidated subsidiaries					10
Trade payables		8,186			7,774
Net profit/(loss) attributable to owners of Southern States Sign Company		(689	)		(532	)
Related parties payables		8,150			7,014
Loss per share of Common Stock
Others current liabilities		3,706			4,232
Profit/(Loss) from continuing operations	€	(0.02	)	€	(0.01	)
Available-for-sale liabilities		-			335
Net Profit/(Loss) from discontinued operations	€	-		€	0.00
Total current Liabilities		34,232			33,521
Net Profit/(Loss)	€	(0.02	)	€	(0.01	)
Non - current liabilities:
Weighted-average shares outstanding:
Long term loans and capital leases		39,862			41,888
Common Stock
Shareholder's loans		2,556			626
Basic and diluted		40,151,261			40,151,261
Other non-current liabilities		60			60
Total non - current Liabilities		42,478			42,574
Stockholders' Equity
Common stocks		27			27
Additional Paid in Capital		26,509			26,059
Retained earnings/(Accumulated loss)		5,218			7,359
Equity attributable to owners of Southern States Sign Company		31,304			33,445
Non-Controlling interests in the consolidated subsidiaries		760			860
Total Stockholders' Equity		32,064			34,305
Total Liabilities and Stockholders' Equity	€	108,774		€	110,400

SOUTHERN STATES SIGN COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2013 & 2012

€’000, except per share amounts	Three Months Ended September 30, 2013			Three Months Ended September 30, 2012			Nine Months Ended September 30, 2013			Nine Months Ended September 30, 2012
	Unaudited			Unaudited			Unaudited			Unaudited
Revenue from operations	€	648		€	970		€	1,807		€	3,254
Direct operating and selling, general and administrative costs
Direct operating costs		(175	)		109			40			576
Selling, general and administrative costs		127			(25	)		1,081			1
Amortization and depreciation		577			726			1,752			2,158
Total direct operating, selling, and administrative costs		529			810			2,873			2,735
Operating Profit/(Loss)		119			160			(1,066	)		519
Interest income		477						523
Interest expenses		525			579			1,670			1,775
Other income		-			-			-			17
Income/(Loss) from continuing operations, before income taxes		71			(419	)		(2,214	)		(1,239	)
Income taxes					38						113
Income/(Loss) from continuing operations, net of income taxes		71			(457	)		(2,214	)		(1,352	)
Net income/(loss) from operations of discontinued operations, after taxes		-			845			-			(19	)
Net income/(loss) on disposal of discontinued operations, after taxes		-			250			(32	)		3,565
Net profit/(loss) from discontinued operations		-			1,094			(32	)		3,546
Consolidated net profit/(loss) for the period		71			638			(2,246	)		2,194
Less net loss/(profit) attributable to non-controlling interests in the consolidated subsidiaries		7			(121	)		100			44
Net profit/(loss) attributable to owners of Southern States Sign Company	€	78		€	517		€	(2,146	)	€	2,238
Profit/(Loss) per share of Common Stock
Loss from continuing operations	€	0.00		€	(0.01	)	€	(0.06	)	€	(0.04	)
Profit/(loss) from discontinued operations	€	0.00		€	0.03		€	(0.00	)	€	0.12
Net profit/(loss)	€	0.00		€	0.02		€	(0.06	)	€	0.07
Weighted-average shares outstanding:
Common Stock
Basic and diluted		40,151,261			33,101,852			40,151,261			33,101,852

SOUTHERN STATES SIGN COMPANY

STATEMENT OF COMPREHENSIVE INCOME/(LOSS)

€’000	Three Months Ended September 30, 2013		Three Months Ended September 30, 2012		Nine Months Ended September 30, 2013			Nine Months Ended September 30, 2012
	Unaudited		Unaudited		Unaudited			Unaudited
Net profit/(loss) for the period	€	78	€	517	€	(2,146	)	€	2,238
Other comprehensive income
Foreign currency Translation differences		5		-		5			-
Total comprehensive income for the period	€	83	€	517	€	(2,141	)	€	2,238

€’000

	Three months ended March 31,			Three months ended March 31,
	2014			2013
	Unaudited			Unaudited

Net Profit/(Loss) for the period	€	(689	)	€	(532	)
Other comprehensive income
Foreign currency Translation differences		-			(5	)
Total comprehensive Profit/(Loss) for the period	€	(689	)	€	(537	)

SOUTHERN STATES SIGN COMPANY

Consolidated Statements of Stockholders’ Equity (Deficit)

(Unaudited)

€’000	Common Stock				Additional		Retained			Equity			TOTAL
	Shares		Amount		Paid In		earnings			interests			EQUITY
Balance at December 31, 2011		33,101,852	€	25	€	25,978	€	(936	)	€	(3	)	€	25,064
Shares issued to Consultants		200,000		1		14		-			-			15
Acquisition of Southern States Sign Company		6,849,409		1		67		-			-			68
Change in Percentage of Controlling Interests		-		-		-		136			895			1,031
Net profit/(loss) for the year		-		-		-		8,153			(32	)		8,121
Foreign currency translation		-		-		-		6			-			6
Balance at December 31, 2012		40,151,261	€	27	€	26,059	€	7,359		€	860		€	34,305
Net profit/(loss) for the year		-		-		-		(2,146	)		(100	)		(2,246	)
Foreign currency translation		-		-		-		5			-			5
Balance at September 30, 2013		40,151,261	€	27	€	26,059	€	5,218		€	760		€	32,064

SOUTHERN STATES SIGN COMPANY

CONSOLIDATED ~~STATEMENTS~~STATEMENT OF ~~CASH~~STOCKHOLDERS’ EQUITY ~~FLOWS~~(DEFICIT)

~~FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2013 & 2012~~(UNAUDITED)

€’000	Nine Months Ended			Nine Months Ended
	September 30,			September 30,
	2013			2012
	Unaudited			Unaudited
Cash Flows from Operating Activities:
Net Income/(loss)	€	(2,246	)	€	2,194
Net loss from operations on discontinued operations		-			19
Net (gain)/loss from discontinued operations		32			(3,565	)
Net Income/(loss) from continuing operations		(2,214	)		(1,352	)
Depreciation and amortization of non-current assets		1,752			2,158
Other non-cash adjustments		78			67
Cash flows from operations before changes in assets and liabilities		(384	)		873
Changes in assets and liabilities:
Change in trade receivables		(33	)		(1,608	)
Change in related parties receivables		(1,512	)		(19,211	)
Change in other receivables		(1	)		(243	)
Change in advance payment on purchase and other current assets		6			-
Change in other assets		64			96
Change in trade payables		456			(890	)
Change in related parties payables		1,196			4,917
Change in other payables		(415	)		973
Change in VAT taxes		527			1,475
Change in other liabilities		4			6,883
Net cash provided by operating activities of discontinued operations		-			(6,966	)
Net cash provided by/(used in) Operating Activities (A)		(152	)		(13,701	)
Cash Flows from Investing Activities:
Purchases of intangible assets		(1	)		(1	)
Proceeds from sale/(Purchases of) properties, plant and equipment		60			(3591	)
Proceeds from sale of associates and other company		9
Other investing change		(337	)		(76	)
Net cash provided by investing activities of discontinued operations		-			12,823
Net cash provided by/(used in) investing activities (B)		(269	)		9,155
Cash Flows from Financing Activities:		-
Net (reimbursements)/borrowings from bank overdrafts		(2,012	)		97
Net proceeds from/(repayment of) issuance of long-term debt		10			231
Net proceeds from issuance/(repayment of) shareholders loan		2,070			6,136
Net cash provided by/(used in) financing activities of discontinued operations		-			2,019
Net cash provided by Financing Activities (C )		68			4,445
Net Increase/(decrease) in Cash and Cash Equivalents (A+B+C)		(354	)		(101	)
Cash and cash equivalents at beginning of the year		441			312
Cash and cash equivalents at end of the year	€	88		€	211

€’000

										Equity
										attributable
										to non-
	Common Stock				Additional		Retained			controlling			TOTAL
	Shares		Amount		Paid In Capital		earnings			interests			EQUITY
Balance at December 31, 2012		40,151,261	€	27	€	26,059	€	7,359		€	860		€	34,305

Net profit/(loss) for the year		-		-		-		(11,674	)					(11,674	)

Change in percentage of controlling interests								832			(860	)		(28	)

Foreign currency translation		-		-		-		17			-			17

Balance at December 31, 2013		40,151,261	€	27	€	26,059	€	(3,466	)	€	-		€	22,620

Net profit/(loss) for the year		-		-		-		(689	)					(689	)

Balance at March 31, 2014		40,151,261	€	27	€	26,059	€	(4,155.	)	€	-		€	21,931

SOUTHERN STATES SIGN COMPANY

~~Notes~~CONSOLIDATED toSTATEMENTS ~~Consolidated~~OF ~~Financial~~CASH ~~Statements~~FLOWS

~~For~~FOR ~~the~~THE ~~nine~~THREE ~~months~~MONTH ~~ended~~PERIODS ~~September~~ENDED ~~30,~~MARCH 31, 2013 ~~and~~AND ~~2012~~2014

€’000	Three months ended March 31, 2014			Three months ended March 31, 2013
	Unaudited			Unaudited

Cash Flows from Operating Activities:
Net Income/(loss)	€	(689	)	€	(542	)
Net (income)/loss from operations on discontinued operations					(8	)

Net Income/(loss) from continuing operations		(689	)		(550	)
Depreciation and amortization of non-current assets		555			525
Other non-cash adjustments		(340	)		(439	)
Cash flows from operations before changes in assets and liabilities		(474	)		(464	)
Changes in assets and liabilities:
Change in trade receivables		83			(236	)
Change in related parties receivables		(297	)		(198	)
Change in other receivables		-			2
Change in advance payment on purchase and other current assets		(4	)		(6	)
Change in other assets		112			(85	)
Change in trade payables		1,022			759
Change in related parties payables		617			143
Change in other payables		(87	)		58
Change in tax receivable and payable		(110	)		78
Change in other liabilities		(218	)		1
Net cash provided by/(used in) operating activities of discontinued operations					(62	)
Net cash provided by/(used in) Operating Activities (A)		644			(10	)
Cash Flows from Investing Activities:
Purchases of intangible assets		(386	)		(167	)
Purchases of properties, plant and equipment		(297	)		-
Purchases of/proceeds from sale of associates and other company		(9	)		9
Other investing change		-			6
Net cash provided by/(used in) investing activities (B)		(692	)		(152	)
Cash Flows from Financing Activities:
Net reimbursements/borrowings from bank overdrafts		8			(62	)
Net proceeds from/repayment of issuance of long-term debt		(254	)		(103	)
Net proceeds from/repayment of issuance of shareholders loan		(20	)		-
Net cash provided by Financing Activities (C )		(266	)		(165	)
Net Increase/(decrease) in Cash and Cash Equivalents (A+B+C)		(314	)		(327	)
Cash and cash equivalents at beginning of the year		728			441
Cash and cash equivalents at end of the year	€	414		€	115

SOUTHERN STATES SIGN COMPANY

Notes to unaudited Consolidated Financial Statements

For the three months ended March 31, 2014 and 2013

(Euros, amounts in thousands, unless otherwise indicated)

NOTE 1. ORGANIZATION

Southern States Sign Company (“SOST”) is a corporation incorporated in the state of Nevada. SOST operates through its wholly owned subsidiary, Conte Rosso & Partners S.r.l. (“CR&P,” and together with SOST, the “Company”), ~~which is~~ a company incorporated in Italy. Operations are carried out through its subsidiary, CR&P, and mainly ~~consist~~consists of ~~investments~~investment in the hospitality industry.

On November 1, 2012, the Company entered into athe ~~share~~Exchange ~~exchange~~Agreement ~~agreement~~ with CR&P, pursuant to which the ~~shareholders of~~ CR&P Shareholders transferred all of the issued and outstanding capital stock of CR&P to ~~SOST~~the Company in exchange for 21,250,000 newly issued shares of ~~the~~our ~~Company’s~~ common stock, resulting in CR&P becoming a wholly owned subsidiary of ~~SOST (~~the ~~“Share Exchange”)~~Company. The transaction was accounted for as a reverse acquisition into a publicly traded shell corporation, and accordingly, no goodwill was recorded. As a result of the ~~Share~~reverse ~~Exchange~~acquisition, the historical financial statements of ~~SOST~~Southern State Sign Company for the periods prior to the date of the transaction are not presented.

As of ~~September~~March 3031, ~~2013~~ 2014, the consolidated operating subsidiaries are the following (those entities which are indented represent subsidiaries of the entity under which they are indented):

Subsidiaries

% of voting

Name of Company

% Ownership

capital of subsidiary owned by its parent

Location

Principal activity

Southern States Sign Company

A. Conte Rosso & Partners S.r.l.

100.00

Italy

Hospitality Business

1. Aral Immobiliare S.r.l.

100.00

Italy

Hospitality Business

2. C.R.&P. Service S.c.a.r.l.

35.75

Italy

Group’s Exclusive financial services

3. Galzignano Terme Golf & Resort S.p.A.

100.00

Italy

Hospitality business

4. I.B.H. Management Company, S.r.l.

100.00

Italy

Hospitality business

a. I.B.H. Ripa S.R.L.*

90.00

Italy

Hospitality Business

5. Masseria Santo Scalone Hotel & Resort S.r.l.

100.00

Italy

Hospitality business

6. Primesint S.r.l.

70.00

Italy

Investment Company

Subsidiaries

Name of Company	% Ownership		Location	Principal activity
Southern States Sign Company
A. Conte Rosso & Partners S.r.l.		100.00	Italy	Hospitality Business

1. Aral Immobiliare S.r.l.		100.00	Italy	Hospitality business

2. C.R.&P. Service S.c.a.r.l.		100.00	Italy	Group’s Exclusive financial services

3. Galzignano Terme Golf & Resort S.p.A.		100.00	Italy	Hospitality business

4. Masseria Santo Scalone Hotel & Resort S.r.l.		100.00	Italy	Hospitality business

5. Primesint S.r.l.		100.00	Italy	Investment Company

6. IBH Management Company S.r.l.		100.00	Italy	Hospitality business

7. IBH Ripa S.r.l		100.00	Italy	Hospitality business

8. GHG Resorts S.r.l.		100.00	Italy	Hospitality business

On ~~October~~March 1026, 2013, I.B.H. ~~Ripa~~Management Company S.r.l. (“I.B.H. ~~Ripa~~Management”) was incorporated. I.B.H. ~~Ripa~~Management is 9095% owned by IC.BR.H&P. ~~Management~~Service ~~Company,~~ S.c.a.r.l. ~~and~~ 10and 5% owned by ~~Aral~~Mr. ~~Immobiliare~~Antonio SConte.~~r.l.~~

~~NOTE~~On April 3, 2013, GHG Resorts S.r.l. (“GHG 2Resorts”) was incorporated. ~~Summary~~GHG ofResorts ~~significant~~is ~~accounting~~95% ~~policies~~owned by I.B.H. Management and 5% owned by Mr. Antonio Conte.

On October 10, 2013, I.B.H. Ripa S.r.l. (“I.B.H. Ripa”) was incorporated. I.B.H. Ripa is 90% owned by I.B.H. Management and 10% owned by Aral Immobiliare S.r.l.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of consolidation

All majority-owned subsidiaries in which CR&P has both a voting share and management control are consolidated. All significant intercompany accounts and transactions are eliminated. Subsidiaries over which control is achieved through other means, such as stockholders’ ~~agreements~~agreement, are also ~~consolidated~~ consolidated even if less than 51% of voting capital is held. The equity attributable to non-controlling interests in subsidiaries is shown separately in the consolidated financial statements.

Basis of presentation

The consolidated financial statements for the ~~nine~~three months ended ~~September~~March 3031, ~~2013~~2014, unaudited, and for the fiscal year ended ~~2012~~December 31, 2013, audited, are prepared in ~~accordance~~ accordance with generally accepted accounting principles generally accepted in the United States of America (“US GAAP”).

The Euro is the functional currency of all companies included in these consolidated financial statements.

The amounts presented have been rounded to the nearest thousand.

Fair value

We disclose the fair value of our financial assets and liabilities based on observable market information where available, or on market participant assumptions. These assumptions which are subjective in nature involve matters of judgment, and, therefore, fair values cannot always be determined with precision. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). “US GAAP” establishes a valuation hierarchy for prioritizing the inputs and the hierarchy places greater emphasis on the use of observable market inputs and less emphasis on unobservable inputs. When determining fair value, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of the hierarchy are as follows:

Level One—Fair values based on unadjusted quoted prices in active markets for identical assets and liabilities;

Level Two—Fair values based on quoted market prices for similar assets and liabilities in active markets, quoted prices in inactive markets for identical assets and liabilities, and inputs other than quoted market prices that are observable for the asset or liability;

Level Three—Fair values based on inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. Valuation techniques could include the use of discounted cash flow models and similar techniques.

We utilize the market approach and income approach for valuing our financial instruments. The market approach utilizes prices and information generated by market transactions involving identical or similar assets and liabilities and the income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). For instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the classification of fair value assets and liabilities within the fair value hierarchy.

The carrying values of cash equivalents, accounts receivable, financing receivable – current, accounts payable and current maturities of long-term debt approximate fair value due to the short-term nature of these items and their close proximity to maturity.

Acquisitions

Assets acquired and liabilities assumed in business combinations are recorded on our consolidated balance sheets as of the respective acquisition dates based upon their estimated fair values at such dates.

The results of operations of businesses acquired by us have been included in the consolidated statements of income (loss) since their respective dates of acquisition. In certain circumstances, the purchase price allocations are based upon preliminary estimates and assumptions. Accordingly, the allocations are subject to revision when we receive final information, including appraisals and other analyses. There were no contingent payments, options, or commitments specified in any of our acquisition agreements.

Cash and cash equivalents

Cash and cash equivalents ~~are~~ ~~comprised~~comprise of cash balances, cash on current accounts with banks, bank deposits and other highly liquid short-term investments with original maturities of less than three months.

Accounts receivable & Allowance for doubtful accounts

Accounts receivable represents trade obligations from customers that are subject to normal trade collection terms, without discounts. The Company periodically evaluates the collectability of its accounts receivable and considers the need to record or adjust an allowance for doubtful accounts based upon historical collection experience and specific customer information. Actual amounts could vary from the recorded estimates. The Company has determined that as of ~~September~~March 3031, ~~2013~~2014 and December 31, ~~2012~~2013, € 0 is the allowance for doubtful accounts that was required. The Company does not require collateral to support customer receivables.

Investments

Investments in unconsolidated affiliates over which we exercise significant influence, but do not control, including joint ventures, are accounted for using the equity method.

Investments in unconsolidated affiliates over which we are not able to exercise significant influence are accounted for under the cost method.

Property, plant and equipment

Property, plant and equipment are stated at acquisition cost less accumulated depreciation and adjustments for impairment losses. Property, plant and equipment also includes assets under construction and plant and equipment awaiting installation.

Subsequent expenditures are capitalized only when they increase the future economic benefits embodied in an item of property, plant and equipment. All other expenditures are recognized as expenses in the consolidated statement of income as incurred.

Capitalization ceases when construction is interrupted for an extended period or when the asset is substantially complete.

Depreciation is charged on a straight-line basis over the estimated remaining useful lives of the individual assets.

Depreciation commences from the time an asset is put into operation. Depreciation is not charged on assets to be disposed of or on land. The range of the estimated useful lives is as follows:

- Buildings and constructions: 33 - 66 years

Machinery and equipment: 2 – 20 years

Others: 5 years

Long-Lived Assets

We evaluate the carrying value of our long-lived assets for impairment by comparing the expected undiscounted future cash flows of the assets to the net book value of the assets when events or circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. If the expected undiscounted future cash flows are less than the net book value of the assets, the excess of the net book value over the estimated fair value will be charged to earnings.

Fair value is based upon discounted cash flows of the assets at a rate deemed reasonable for the type of asset and prevailing market conditions, appraisals, and, if appropriate, current estimated net sales proceeds from pending offers.

We evaluate the carrying value of our long-lived assets based on our plans, at the time, for such assets and such qualitative factors as future development in the surrounding area and status of expected local competition.

Discontinued operations

AtIn connection with the strategy of focusing on hotel ownership, at the end of September, 2012, we divested ~~all~~most of our non-hotel assets to a related party at cost ~~as part of our strategy to focus on hotel ownership~~.

The realized value of these assets is higher than the net asset carrying value.

In 2013 we continued to divest some non hospitality assets:

	−	We sold the property located in Via Benaco, Milan (Italy), owned by Primesint, S.r.l. The property has been owned under a capital lease contract, which has been transferred to the acquirer.
	−	We sold the property located in Via Buozzi, Rome (Italy) owned by Conte Rosso & Partners, S.r.l. to a related party (Valma Immobiliare, S.r.l., owned by Mr.Conte’s family). The property has been owned under a capital lease contract, which has been transferred to the acquirer.
	−	In 2013 we also resolved the Masseria Santo Scalone purchase contract, due to non fulfillment of some conditions precedent, by returning the real estate property and the related debt to the seller.

Goodwill and Other Intangible Assets

We evaluate goodwill for impairment on an annual basis, and do so during the last month of each year using balances as of the end of September and at an interim date if indications of impairment exist. Goodwill impairment is determined by comparing the fair value of a reporting unit to its carrying amount in a two-step process with an impairment being recognized only where the fair value is less than carrying value. We define a reporting unit at the individual property level.

When determining fair value in step one, we utilize internally developed discounted future cash flow models, third party appraisals and, if appropriate, current estimated net sales proceeds from pending offers. Under the discounted cash flow approach we utilize various assumptions, including projections of revenues based on assumed long-term growth rates, estimated costs and appropriate discount rates based on the weighted-average cost of capital. The principal factors used in the discounted cash flow analysis requiring judgment are the projected future operating cash flow, the weighted-average cost of capital and the terminal value growth rate assumptions. The weighted-average cost of capital takes into account the relative weights of each component of our capital structure (equity and long-term debt) and is determined at the reporting unit level. Our estimates of long-term growth and costs are based on historical data, various internal estimates and a variety of external sources, and are developed as part of our routine, long-term planning process. We then compare the estimated fair value to our carrying value.

If the carrying value is in excess of the fair value, we must determine our implied fair value of goodwill to measure if any impairment charge is necessary. The determination of our implied fair value of goodwill requires the allocation of the reporting unit’s estimated fair value to the individual assets and liabilities of the reporting unit as if we had completed a business combination.

We perform the allocation based on our knowledge of the reporting unit, the market in which they operate, and our overall knowledge of the hospitality industry.

Leasing

All lease agreements of the Company and its subsidiaries as ~~lessees~~Lessees are accounted for as capital. The Company recognizes the asset and associated liability on its balance sheet. Capital isare capitalized at the beginning of the lease at the lower of the fair value of the leased property and the present value of minimum lease payments. Each installment of the lease is apportioned between the liability and finance charges so as to achieve an equal reduction in capital due for each payment made at constant rate on the remaining financial balances.

Derivative financial instruments

The Company uses derivative financial instruments principally for the management of exposure to variable interest rates on long-term financing. All derivative financial instruments are classified as assets or liabilities and are accounted for at trade date. The Company measures all derivative financial instruments based on fair values derived from market prices of the instruments. Changes in the fair value of a derivative that is significant and that is designated and qualifies as a fair value hedge, along with the loss or gain on the hedged asset or liability, are recorded in the income statement.

As of ~~December~~March 31, ~~2012~~2014 ~~there~~and ~~are~~for ~~no derivative instruments. During~~ the ~~2012~~fiscal ~~there~~year ~~was~~ended ~~only~~December ~~one~~31, ~~derivative instrument hedging the risk of variable interest rates (an “interest rate cap”)~~2013, ~~the~~there ~~notional~~are ~~amount~~no ~~of which was € 4 million. This~~ derivative ~~instrument hedges the risk from change of interest rate on a mortgage loan facility with “bullet” repayments originally of € 8 million of which € 6~~instruments.~~6 million is outstanding. This derivative was divested as part of our plan to focus on hotels only as of September 30, 2012.~~

910

~~Shareholder~~Shareholders loans

~~Shareholder~~Shareholders loans to the ~~Company~~Group are all non-interest bearing. Italian law provides that the shareholders loans to a corporation ("S.r.l.") are not preferred and their repayment is subordinated to other categories of debt. As a result all shareholder loans are classified as non-current liabilities.

Severance indemnity fund

According to Italian accounting principles reflecting local law and applicable employment contracts, certain post-employment benefits accrue during the period of employment. Under U.S. GAAP, post-employment benefits are defined either as de fined contribution plans or defined benefit plans.

In defined contribution plans, the Company's obligation is limited to the payment of contributions to the Government or to a fund. Defined benefit plans are pension, insurance and healthcare programs which cover the Company's obligation, even implicitly, to provide the benefits due to former employees. The liabilities associated with defined benefit plans are determined on the basis of actuarial assumption (discounting) and accrued in the financial statements over the employment period required to obtain the benefits.

The severance indemnity fund required by Italian law is a liability similar to a defined benefit plan, which, however, according to Italian accounting principles, is not subject to discounting. Given the small number of Company ~~employee~~employees any difference between the present provisions in the financial statements prepared in accordance with Italian GAAP and discounted value of these benefits is considered to be immaterial.

Revenue Recognition

Our revenues are derived from rent we receive according to rental agreements we have in place with a ~~hotel~~Hotel ~~management~~Management ~~companies~~Company. The majority of our rent is fixed and payable monthly. The fixed agreements with set increasing rental rates is recognized on a straight line-basis. We recognize additional revenue that ~~varies~~is variable based on a percentage of the operating profit of our rented hotels only when contingency of the baseline target has been met.

Taxes

Income taxes

We account for income taxes to recognize the amount of taxes payable or refundable for the current year and the amount of deferred tax assets and liabilities resulting from the future tax consequences of differences between the financial statements and tax basis of the respective assets and liabilities. We recognize the financial statement effect of a tax position when, based on the technical merits of the uncertain tax position, it is more likely than not to be sustained on a review by taxing authorities. These estimates are based on judgments made with currently available information. We review these estimates and make changes to recorded amounts of uncertain tax positions as facts and circumstances warrant.

We are subject to income taxes under the tax laws of Italy. The Company accounts for uncertainty in income taxes in accordance with Topic 740, “Income Taxes,” of the Accounting Standards Codification (“ASC 740”). ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with generally accepted accounting principles and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in an income tax return. ASC 740 also provides guidance on recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. During the ~~years~~three months ended ~~December~~March 31, ~~2012~~2014 and ~~2011~~ 2013, the Company recognized no adjustments for uncertain tax positions.

The Company recognizes interest and penalties relating to uncertain tax positions in income tax expense. There is no interest or penalties relating to tax positions during the ~~periods~~three months ended ~~September~~March 3031, ~~2013~~2014 and ~~December 31, 2012~~2013.

The Company is also subject to examination in Italy where it has filed tax returns for the years 2009 through 2011. On April 11, 2014, Aral Srl. entered into a settlement agreement with the Italian Revenue Agency in relation to a tax assessment concerning certain asserted outstanding taxes (VAT, income taxes etc.), as mentioned below (see Note n. 13 – Subsequent events).

Stockholder’s equity

As of ~~September~~March 3031, 2014 and for the fiscal ~~2013~~year ended December 31, 2013 the share capital of CR&P is represented by 40,151,261 outstanding shares. Mr. Antonio Conte and his wife Maddalena Olivieri contributed 82.44% of the share capital of CR&P.

AsNOTE of3. ~~December~~RELATED ~~31, 2012,~~PARTIES ~~after the Share Exchange was consummated on November 1, 2012, the share capital of CR&P was represented by 39,526,261~~RECEIVABLES ~~outstanding~~AND ~~shares. Mr. Antonio Conte and his family contributed 87.14% of the share capital of CR&P.~~PAYABLES

10Related parties current receivables and payables relate to the former CEO and shareholder, Mr. Antonio Conte, both directly and indirectly. As of March 31, 2014 the amounts of related parties current receivables of € 16,662 thousand and payables of € 6,146 thousand refers to CR&P Service, S.r.l., a subsidiary incorporated in 2012 that manages the Company’s cash facilities and cash pooling and also for other companies owned by Mr. Conte but not consolidated in CR&P (related parties). During the three months ended March 31, 2014 and the fiscal years ended December 31, 2013, the operations of CR&P Service, S.r.l. did not generate any material impact on the consolidated equity and statement of operations of CR&P. The amounts shown as non-current receivables as of March 31, 2014 and December 31, 2013 relate to a receivable from Masoledo, S.r.l., owned by Mr. Conte in connection with the sale of the non-hotel business which occurred in September, 2012.

~~NOTE~~The 3.amount ~~Related~~ of related parties current receivables of ~~and~~€ ~~payables~~1,206,000 as of March 31, 2014 refers to a sale of two non-hotel assets (buildings of Porto Rotondo e Porto Cervo, OT, Italy), previously owned by Ripa Hotel & Resorts, S.r.l. (a wholly-owned subsidiary merged with Aral S.r.l. on March, 2013), to Valma Immobiliare, S.r.l., a related party owned by Mr. Conte’s family.

Related parties current receivables and payables relate to the former CEO and shareholder, Mr. Antonio Conte, both directly and indirectly. As of September 30, 2013, the amounts of related parties current receivables and payables mainly refers to CR&P Service, S.r.l., a subsidiary incorporated in 2012 that manages the Company’s cash facilities and cash pooling and also for other companies owned by Mr. Conte but not consolidated in CR&P (related parties). During the fiscal year 2012 and the nine months period ended September 30, 2013, the operations of CR&P Service, S.r.l. did not generate any material impact on the consolidated equity and statement of operations of CR&P. The amount shown as non-current receivables as of September 30, 2013 and December 31, 2012 relates to a receivable from Masoledo, S.r.l., owned by Mr. Conte in connection with the sale of the non-hotel business which occurred in September, 2012.

NOTE 4. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment, included in continuing operations, comprises:

€’000

Property, plant and equipment	~~September~~March 3031, ~~2013~~2014			December 31, ~~2012~~2013
Hotel Ripa building, plant and equipment	€	42,~~594~~918		€	42,~~654~~594
Terme di Galzignano golf, building, plant and equipment		39,~~061~~129			39,~~229~~129
Via Buozzi, Rome, building		3,300			3,300
Less accumulated depreciation		(23,930	)		(23,348	)
Ostuni (BR) - Hotel Masseria Santo Scalone building		5,028			5,013
Total, net	€	58,117		€	58,375
Less accumulated depreciation		(23,068	)		(21,469	)
Total, net	€	66,915		€	68,727

The properties owned by the Company as of ~~September~~March 3031, ~~2013~~2014 ~~have~~has been recently tested for impairment, by committing a specialized appraisal firm, which provided updated appraisals of their fair value. The methodologies applied in those appraisals mainly consists in the market value method and the discounted future cash flows method. The appraisals show fair value ~~amounts~~amount of ~~each~~the ~~property~~properties significantly higher than the relevant carrying amount.

NOTE 5. MAJOR ACQUISITIONS AND DIVESTMENTS

Masseria Santo Scalone Hotel & Resort S.r.l.

In line with the strategy to expand operations in the hospitality area, on September 29, 2012, the Company acquired 100.00% of Masseria Santo Scalone Hotel & Resort ~~S.r.l.~~Srl (“Masseria”) from a related party (Masoledo, ~~S.r.l.~~Srl, owned by Mr. Conte’s ~~and his~~ family), which had previously purchased, in June 2012, an ancient real estate property located in Ostuni, Pulia, in the south of Italy, from Peretola Srl. The cost of acquisition of Masseria was €3.2 million.

The primary asset of Masseria is a resort spa located in Ostuni, Pulia, in the south of Italy. The complex is restructuring.

The balance sheet effects of the acquisition are summarized below:

The purchase price allocation for the acquisition of Masseria Santo Scalone Hotel & Resort S.r.l. is as follows;

€’000	May 29, 2012
Current maturity of long-term debt	€	2,898
Related parties payable		300
Cash payments		10
Total purchase price	€	3,208
Allocated to:
Property, plant and equipment	€	4,903
Net working capital		(1.705	)
Cash		10
Total	€	3,208

There is no goodwill recognized on the acquisition of Masseria.

~~Divestment~~On November 27, 2013, Masseria Santo Scalone Hotel and Resort Srl (“Masseria”), which was the owner of ~~all~~a ~~non-hospitality~~real ~~businesses~~estate property in Ostuni, (Brindisi), resolved the contract entered with Peretola Srl on June 11, 2012 concerning the acquisition of the property. This was mainly due to the inability of the seller to fulfill certain conditions precedent (among which to provide the registration of the property as “hotel” instead of as “residential” in the land public registry). Accordingly the property (together with the relative mortgage loans) was returned to the seller, which in turn will have to reimburse Masseria for the down payments made so far (€ 442,188).

InChange ~~September~~in ~~2012,~~percentage ~~the Company divested all~~ of itinterests ~~non-hotel assets to a related party company controlled by the shareholders. The total assets and liabilities divested~~in ~~was~~Primesint, ~~$ 52~~S.~~9 million and $ 44~~r.~~7 million, respectively~~l.

At the beginning of 2013, the shareholders of the Company entered into an agreement of exchange of interests in Primesint Srl. After this investment, Primesint is a wholly-owned subsidiary. The transaction has been realized with no gain or loss for controlling interests.

Change in percentage of interests in Galzignano Terme Golf & Resorts, S.p.A.

At the beginning of 2013, the shareholders of the Company entered into an agreement of exchange of interests in Galzignano Terme Golf & Resorts, S.p.A.. After this transaction, Galzignano is a wholly-owned subsidiary. The transaction has been realized with no gain or loss for controlling interests.

Divestment of the property in Via Benaco, Milan, Italy

In order to focus on the hospitality business, in April, 2013 the ~~Company~~wholly-owned subsidiary Primesint, S.r.l. sold the property located in Via Benaco, Milan (Italy). The property has been owned under a capital lease contract, which has been transferred to the acquirer with no-cash inflow paid.

The balance sheet effects of this disposal are summarized in the table below:

Balance sheets effects of the divestment of the property in Via Benaco, Milan (Italy)

€’000	April 1, 2013
Inflow of cash and other assets	€	0
Total assets divested, less accumulated depreciation		(~~439~~438	)
Total liabilities divested		407
Recognized loss		(3231	)

The loss resulting from this divestment has been recognized in the consolidated statement of operations as a loss on disposal of discontinued operations.

Divestment of the property in Via Buozzi, Rome (Italy)

In order to focus on the hospitality business, in December, 2013, the wholly-owned subsidiary Conte Rosso & Partners, S.r.l. sold the property located in Via Buozzi, Rome (Italy) to a related party (Valma Immobiliare, S.r.l., owned by Mr.Conte’s family). The property has been owned under a capital lease contract, which has been transferred to the acquirer with no-cash inflow paid.

The balance sheet effects of this disposal are summarized in the table below:

Balance sheets effects of the divestment of the property in Via Buozzi, Rome (Italy)

€’000	December 18, 2013
Inflow of cash and other assets	€	0
Total assets divested, less accumulated depreciation		(3,137	)
Total liabilities divested		2,566
Recognized loss		(571	)

The loss resulting from this divestment has been recognized in the consolidated statement of operations as a loss on disposal of discontinued operations.

NOTE 6. GOODWILL

The table below ~~shows~~ shown the breakdown of goodwill related to continuing operations:

€’000

	Owned and leased hotel		Others owned properties		Total
Balance as of January 1, 2012
Balance as of January 1, 2013
Goodwill, net		1,149		392		1,541
No Activity during the period		-		-		-
Balance as of December 31, 2012
Balance as of December 31, 2013
Goodwill, net		1,149		392		1,541
Balance as of January 1, 2013
Balance as of January 1, 2014
Goodwill, net		1,149		392		1,541
No Activity during the period
Balance as of March 31, 2014
Balance as of September 30, 2013
Goodwill, net		1,149		392		1,541
Goodwill, net		1.149		392		1.541

12In the three months ended March 31, 2014 and in the fiscal years ended December 31, 2013, the Company did not have any new goodwill or any impairment on existing goodwill.

In the nine months period ended September 30, 2013 and in the fiscal year ended December 31, 2012, the company did not have any new goodwill or any impairment on existing goodwill.

NOTE 7. OTHER NON-CURRENT ASSETS

The table below shown the breakdown of other non-current assets, related to continuing operations:

€’000	September 30, 2013		December 31, 2012
Related parties non-current receivables	€	8,890	€	8,890
Investment in other companies		4		13
Accruals and deferred costs		311		375
Other intangible assets		1,259		1,257
Other non-current assets	€	10,464	€	10,535

€’000

	March 31, 2014		December 31, 2013
Related parties non-current receivables	€	8,890	€	8,890
Investment in other companies		4		4
Accruals and deferred costs		143		259
Other intangible assets		1,532		1,339
Total Other non-current assets	€	10,569	€	10,492

NOTE 8. BANK OVERDRAFTS AND LONG-TERM DEBT

Amounts of financial debt (related to continuing operations) due to non-related parties ~~for continuing operations~~ are:

€’000

Mortgages & Capital Leases
	September 30, 2013		December 31, 2012
Mortgage loan on property	€	23,940	€	23,689
Leasing		29,154		29,394
Total	€	53,094	€	53,083

Mortgage & Capital Leases

	September 30, 2013		December 31, 2012
	March 31, 2014		December 31, 2013
Current portion of debt	€	13,232	€	11,196
Mortgage loan on property	€	21,110	€	21,084
Long term debt		39,862		41,887
Leases		26,132		26,412
Total	€	5347,~~094~~242	€	5347,~~083~~496

	March 31, 2014		December 31, 2013
Current portion of debt	€	10,902	€	10,915
Long term debt		36,340		36,581
Total	€	47,242	€	47,496

~~The~~BANK ~~following tables sets out the main terms and conditions and the outstanding balances as of September 30, 2013 and December 31, 2012 of the financial debts:~~OVERDRAFT

~~Outstanding~~The ~~bank~~following ~~overdrafts~~tables sets out the main terms and conditions and the outstanding overdraft balances as of March 31, 2014 and December 31, 2013 of the financial debts referred to continuing operations:

as of September 30, 2013 and December 31, 2012

€’000

Company	Type of debt	Object	Collateral		Outstanding balance as of ~~September~~March 3031, ~~2013~~2014		Outstanding balance as of Dec. 31, ~~2012~~2013
CONTE ROSSO & PARTNERS, S.R.L.	BANK OVERDRAFT	Cash facility		-		-		2,051
TERME DI GALZIGNANO, S.r.l.	BANK OVERDRAFT	Cash facility		-		971		963
TERME DI GALZIGNANO, S.r.l.	BANK OVERDRAFT	Cash facility		-		958		919
				TOTAL		971		963
				TOTAL		958		2,970

Outstanding non-current loans related to continuing operations

as of ~~September~~March 3031, ~~2013~~2014 and December 31, ~~2012~~2013

€’000

Company

Type of debt

Object

Collateral

Outstanding. balance as of ~~September~~March 3031, ~~2013~~2014

Outstanding balance as of Dec. 31, ~~2012~~2013

CONTE ROSSO & PARTNERS, S.R.L.

~~CAPITAL~~UNSECURED ~~LEASE~~LOAN

~~Building~~Cash ~~purchase~~facility

~~Headquarter property, via B.Buozzi, Rome, Italy~~-

~~2,627~~507

~~2,665~~507

CONTE ROSSO & PARTNERS, S.R.L.

UNSECURED LOAN

Cash facility

608

688

ARAL IMMOBILIARE, S.r.l.

CAPITAL LEASE

Building purchase

Hotel property in Rome, Italy

26,132

26,279

MASSERIA SANTO SCALONE, S.r.l.

MORTGAGE LOAN

Building purchase

Hotel and land property, Santo Scalone, Ostuni (Brindisi), Italy

2,388

ARAL IMMOBILIARE, S.r.l.

MORTGAGE LOAN

Building purchase

Building, Porto Cervo (Olbia), Italy

308

MASSERIA SANTO SCALONE, S.r.l.

MORTGAGE LOAN

Building purchase

Hotel and land property, Santo Scalone, Ostuni (Brindisi), Italy

510

TERME DI GALZIGNANO, S.r.l.

MORTGAGE LOAN

Building purchase

Hotel property in Galzignano (Padova), Italy

14,843

ARAL IMMOBILIARE, S.r.l.

CAPITAL LEASE

Building purchase

Hotel property in Rome, Italy

26,527

26,729

TERME DI GALZIGNANO, S.r.l.

MORTGAGE LOAN ("bullet" reimbursement plan)

Cash facility

Hotel property in Galzignano (Padova), Italy

5,760

5,559

ARAL IMMOBILIARE, S.r.l.

MORTGAGE LOAN

Building purchase

Building, Porto Cervo (Olbia), Italy

366

438

TOTAL

47,242

47,496

TERME DI GALZIGNANO, S.r.l.

MORTGAGE LOAN

Building purchase

Hotel property in Galzignano (Padova), Italy

14,535

14,361

TERME DI GALZIGNANO, S.r.l.

MORTGAGE LOAN ("bullet" reimbursement plan)

Cash facility

Hotel property in Galzignano (Padova), Italy

5,533

5,304

TOTAL

53,094

53,083

The following table sets out the significant term and future payments of long-term loans:

€’000				Installments maturity as of September 30, 2013
Company	Type of debt	Object	Collateral	2014		2015		2016		2017		2018
CONTE ROSSO & PARTNERS, S.R.L.	CAPITAL LEASE	Building purchase	Headquarter property, via B.Buozzi, Rome, Italy	€	137	€	107	€	112	€	117	€	122
CONTE ROSSO & PARTNERS, S.R.L.	UNSECURED LOAN	Cash facility	-		328		280
MASSERIA SANTO SCALONE, S.r.l.	MORTGAGE LOAN	Building purchase	Hotel and land property, Santo Scalone, Ostuni (Brindisi), Italy		783		201		207		216		225
MASSERIA SANTO SCALONE, S.r.l.	MORTGAGE LOAN	Building purchase	Hotel and land property, Santo Scalone, Ostuni (Brindisi), Italy		510
ARAL IMMOBILIARE, S.r.l.	MORTGAGE LOAN	Building purchase	Building, Porto Cervo (Olbia), Italy		60		61		63		65		68
ARAL IMMOBILIARE, S.r.l.	CAPITAL LEASE	Building purchase	Hotel property in Rome, Italy		1,001		642		671		702		734
TERME DI GALZIGNANO, S.r.l.	MORTGAGE LOAN	Building purchase	Hotel property in Galzignano (Padova), Italy		4,880		1,379		1,379		1,379		1,379
TERME DI GALZIGNANO, S.r.l.	MORTGAGE LOAN ("bullet" reimbursement plan)	Cash facility	Hotel property in Galzignano (Padova), Italy		5,533
			TOTAL	€	13,232	€	2,670	€	2,432	€	2,479	€	2,528

The following table sets out the amounts of the assets held and used by capital lease, related to continuing operations:

€’000 Class of Property	Asset Balances at			Asset Balances at
	September 30, 2013			December 31, 2012
Building	€	42,030		€	42,030
Less: accumulated depreciation		(6,614	)		(5,669	)
Net balance	€	35,416		€	36,361

The following table sets out the significant term and future payments of long-term loans related to continuing operations:

				€’000
				Installments maturity as of March 31
Company	Type of debt	Object	Collateral	2015		2016		2017		2018		2019
CONTE ROSSO & PARTNERS, S.R.L.	UNSECURED LOAN	Cash facility	-		410		97		-		-

ARAL IMMOBILIARE, S.r.l.	CAPITAL LEASE	Building purchase	Hotel property in Rome, Italy		923		656		686		717		750
TERME DI GALZIGNANO, S.r.l.	MORTGAGE LOAN	Building purchase	Hotel property in Galzignano (Padova), Italy		3,809		1,379		1,379		1,379		1,379
TERME DI GALZIGNANO, S.r.l.	MORTGAGE LOAN ("bullet" reimbursement plan)	Cash facility	Hotel property in Galzignano (Padova), Italy		5,760
			TOTAL	€	10,902	€	2,132	€	2,065	€	2,096	€	2,129

The following table sets out the amounts of the assets held and used by capital lease:

	Asset Balances at			Asset Balances at
Class of property	March 31, 2014			December 31, 2013

Building	€	38,730		€	38,730

Less: accumulated depreciation		(6,923	)		(6,633	)

Net balance	€	31,807		€	32,097

The following table sets out the schedule of the undiscounted and discounted future minimum lease payments:

€’000

Minimum lease payments (future and net present value)
Twelve months ending March 31:	€’000
2015		2,058
2016		1,763
2017		1,763
2018		1,763
2019		1,763
Later years		18,300
Purchase option		11,522
Net minimum lease payments		38,932
Less: Amount representing interest		(12,800	)
Present value of net minimum lease payments	€	26,132

~~Minimum~~As ~~lease~~of ~~payments~~March ~~(future~~31, ~~and~~2014, ~~net~~there ~~present~~are ~~value)~~no unused credit lines.

~~Twelve~~NOTE ~~months~~9. ~~period~~SHAREHOLDER’S ~~ending September 30:~~LOANS

2014	€	2,400
2015		1,977
2016		1,977
2017		1,977
2018		1,977
Later years		21,469
Purchase option		11,852
Net minimum lease payments		43,630
Less: Amount representing interest		(14,475	)
Present value of net minimum lease payments	€	29,154

In order to strengthen the Group’s capital position and taking into account future financial commitments to enable the real estate investment and development projects to be progressed, in the last quarter of 2011, Mr. Conte waived repayment of shareholder’s loans of € 25.9 million.

AsNOTE of10. ~~September~~OTHER ~~30, 2013,~~NON ~~there~~CURRENT ~~are no unused credit lines.~~LIABILITIES

~~NOTE~~The 9.amount ~~COMMITMENTS~~of ~~AND~~€ ~~CONTINGENCIES~~4,627 as of March 31, 2014, mainly refers to the following allowances to provisions account:

~~The~~− ~~Company~~the isamount ~~occasionally involved~~of in€ ~~litigation~~2,250 ~~matters~~is ~~relating~~related to ~~claims arising from~~ the ~~ordinary~~settlement ~~course~~ of ~~business~~Aral. ~~The~~with ~~Company’s~~the ~~management believes~~Italian ~~that~~Revenues ~~there~~Agency, ~~are~~mentioned nobelow ~~claims~~in ~~or actions pending or threatened against~~ the ~~Company,~~note ~~the~~n. ~~ultimate~~13 ~~disposition~~– ofSubsequent ~~which would have a material adverse effect on our business, results of operations and financial condition~~events.

~~NOTE~~− 10The amount of € 1,548 refers to a litigation occurred between Galzignano Terme Golf & Resort, S.p.A. ~~INCOME~~and ~~TAXES~~Sercos SpA.

The amount of € 590 refers to an allowance about a dispute with a supplier.

NOTE 11. COMMITMENTS AND CONTINGENCIES

The Company and certain subsidiaries are defendants in legal actions in the normal course of business. Based on the advice of legal counsel, management believes that the amounts recognized and recorded as debt provisions or asset negative adjustments are sufficient to cover probable losses in connection with such actions.

The risk provisions or negative adjustments are recognized when in accordance with the opinion of legal counsel the liability is probable and measurable.

NOTE 12. INCOME TAXES

Tax losses carryforwards

Under Italian tax law the operating loss carryforwards available for offset against future profits can be used indefinitely. Operating loss carryforwards are only available for offset against national income tax, in the limit of 80% of taxable annual income (this restriction does not apply to the operating loss incurred in the first three years of the Company’s activity, which are therefore available for 100% offsetting).

Our operating losses carried forward and available for offset against future profits as of ~~September~~March 3031, ~~2013~~2014 and December 31, ~~2012~~2013 is € 2 13,~~865~~014 and € ~~651~~12,325, respectively.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Components of the Company’s ~~deferred~~ deferred tax asset are as follows as of ~~September~~March 3031, ~~2013~~2014 and December 31, ~~2012~~2013:

€’000	September 30, 2013			December 31, 2012
Deferred tax asset – net operating loss carryovers		797			179
Less Valuation allowance		(797	)		(179	)
Net deferred tax asset	€	-		€	-

€’000

	March 31, 2014			December 31, 2013
Deferred tax asset – net operating loss carryovers		3,578			3,389
Less Valuation allowance		(3,578	)		(3,389	)
Net deferred tax asset	€	-		€	-

The Company periodically evaluates whether it is more likely than not that it will generate sufficient taxable income to realize the deferred income tax asset. The ultimate realization of this asset is dependent upon the generation of future taxable income sufficient to offset the related deductions. At the present time, management cannot presently determine when the Company will be able to generate sufficient taxable income to realize the deferred tax asset; accordingly, a valuation allowance has been established to offset the asset.

The reconciliation of income tax benefit attributable to continuing operations computed at the Italian statutory tax rates to the income tax benefit recorded is as follows:

	Nine months period ended September 30,
	Three months period ended March 31,
€’000	2013			2012
	2014			2013
Income tax at Italian statutory rate of 27.5%	€	(~~618~~189	)	€	~~603~~(149	)
Increase in valuation allowance		~~618~~189			~~(603~~149	)
Income tax benefit	€	-		€	-

NOTE 13. SUBSEQUENT EVENTS

On ~~October~~April 1011, ~~2013~~2014, Aral Immobiliare Srl ~~I.B.H.~~(“Aral”), ~~Ripa~~the ~~was~~owner ~~incorporated.~~of ~~I.B.H.~~the Ripa isHotel ~~90%~~under ~~owned~~a byfinancial ~~I.B.H.~~lease ~~Management~~agreement ~~Company~~with Unicredit Leasing SpA, ~~S.r.l.~~entered ~~and~~into ~~10%~~a settlement ~~owned~~agreement bywith ~~Aral~~the ~~Immobiliare~~Agenzia ~~S.r.l., each~~delle Entrate (the Italian Revenue Agency) in relation to a ~~wholly~~tax ~~owned~~assessment ~~subsidiary~~issued ofby the latter ~~Company.~~on ~~I.B.H.~~January ~~Ripa~~30, ~~shall~~2014. ~~manage~~The ~~the~~tax ~~business~~assessment ofwas ~~the~~concerning ~~Ripa~~certain ~~Hotel~~asserted inoutstanding ~~Rome.~~taxes ~~Also~~(VAT, onincome ~~October~~taxes etc.) related ~~23,~~to ~~2013,~~the ~~Aral~~financial ~~Immobiliare~~lease ~~S.r.l.~~contract ~~and~~mentioned Kuabove ~~Hotel~~for ~~Srl~~the years from 2008 onwards, ~~the~~for ~~former~~an ~~management~~overall ~~company~~amount of ~~the~~€ ~~Ripa~~3,877,056.35. The ~~Hotel~~settlement agreement envisages that, ~~agreed~~in relation to ~~terminate~~the ~~their business~~first ~~division~~year ~~agreement~~of ~~and~~the ~~their~~financial lease ~~agreement~~contract ~~which~~(2008), ~~were~~Aral ~~last~~will ~~modified~~pay onthe overall ~~March~~amount 10of € 1,234,202.52 ~~2013~~plus ~~(the~~interest, ~~“Termination”)~~in twelve quarterly installments. The ~~Termination~~first ~~shall~~installment ~~become~~has ~~effective~~already been paid on ~~November~~April 1430, ~~2013~~2014.

~~Contemporaneously~~For ~~with~~ the ~~Termination,~~years ~~Aral~~from ~~Immobiliare~~2009 ~~S.r.l.~~up ~~and I.B.H. Ripa entered into a hotel management agreement, dated as of October 23, 2013 (the “Ripa Management Agreement”). Pursuant~~ to ~~the Ripa Management Agreement~~2013, ~~I.B.H. Ripa will manage the Ripa Hotel. I.B.H. Ripa shall pay to~~ Aral ~~Immobiliare annual consideration of €1,680,000 plus VAT for the first year of the agreement,~~ €Srl ~~1,920,000 plus VAT for the second year of the agreement,~~ and ~~€ 2,160,000 plus VAT for~~ the ~~third~~Agenzia ~~year~~delle ~~and~~Entrate ~~all~~entered ~~years of~~into ~~the~~a ~~agreement~~settlement ~~thereafter.~~that ~~The~~envisages ~~Ripa Management Agreement shall become effective on November 14, 2013, and expire on November 13, 2022. Upon mutual consent,~~ the ~~parties~~following ~~may renew the agreement for an additional nine years.~~payments:

2009: € 329,278.00

2010: € 189,810.00

2011: € 184,210.00

2012: € 179,710.00

2013 up to 2027: € 151,034.00 (which may be offset by Aral against higher VAT credit, if any)

2028: € 25,172.41 (which may be offset by Aral against higher VAT credit, if any)

On the basis of the above settlement, Aral already set an allowance for € 2,250,000.00 in its 2013 financial statements which covers all expenses, penalties and interest costs related to this matter..

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes and other financial information appearing elsewhere in this Report on Form 10-Q (the “Report”). In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Readers are also urged to carefully review and consider the various disclosures made by us which attempt to advise interested parties of the factors which affect our business. All amounts are set forth in euros.

The following discussion and analysis relates to the results of the Company and should be read in conjunction with the financial statements and the related notes thereto and other financial information contained elsewhere in this Form 10-Q. For further discussion and analysis related to the results of the Company, please see our Form 10-K for the fiscal year ended December 31, ~~2012~~2013 filed with the SEC on ~~April~~ May 16, ~~2013~~2014.

Overview

Southern States Sign Company is a hospitality company that owns and develops hotels and spas in Italy. We operate through our wholly owned subsidiary, Conte Rosso & Partners S.r.l. (“CR&P”) and, as a result, are classified as property investment specialists.

InWe ~~addition~~intend to develop our ~~hospitality~~ ~~business,~~presence wein ~~have~~Italy and ~~recently~~abroad ~~decided~~with toa ~~enter~~target ~~into~~of ~~the~~owning ~~hotel management business through our newly incorporated subsidiary~~2, ~~I.B.H.~~000 ~~Ripa.~~rooms ~~See~~within ~~Note 13 to~~ the ~~Financial~~next ~~Statements~~3 ~~for~~to a5 ~~discussion on I~~years.~~B.H. Ripa and our hotel management business.~~

We ~~intend~~are tocurrently ~~develop~~in negotiations with respect ~~our~~to ~~presence~~acquisitions in ~~Italy~~Rome and ~~abroad~~Florence ~~with~~and ahave ~~target~~started ofsearches ~~owning~~for ~~3,000~~investment ~~rooms~~opportunities ~~within~~in ~~the next 3 years.~~Milan

WeIn ~~are~~addition ~~currently~~to ~~undergoing advanced~~our ~~negotiations~~primary ~~with~~business, ~~respect~~we have recently decided to ~~investments~~enter ininto ~~Rome~~the ~~and~~hotel ~~Florence~~management inbusiness. ~~Italy,~~In asthis ~~well~~respect aswe inhave ~~New~~set ~~York~~up ~~and~~IBH inRipa ~~the~~Srl ~~United~~which ~~Arab~~is directly ~~Emirates.~~involved Wein ~~have~~the ~~also~~management ~~begun~~of ~~searches~~the ~~for~~Ripa ~~investment~~Hotel ~~opportunities~~ in ~~Paris and London~~Rome.

In addition to the items discussed above, we plan to continue to refresh our hotel room product, pursue third-party development partners for additional hotel and restaurant concepts and renovate select facilities to improve our product offerings.18

Recent Developments and Events

On April 11, 2014, Aral Immobiliare Srl (“Aral”), the owner of the Ripa Hotel under a financial lease agreement with Unicredit Leasing SpA, entered into a settlement agreement with the Agenzia delle Entrate (the Italian Revenue Agency) in relation to a tax assessment issued by the latter on January 30, 2014. The tax assessment was concerning certain asserted outstanding taxes (VAT, income taxes etc.) related to the financial lease contract mentioned above for the years from 2008 onwards, for an overall amount of € 3,877,056.35. The settlement agreement envisages that, in relation to the first year of the financial lease contract (2008), Aral will pay the overall amount of € 1,234,202.52 plus interest, in twelve quarterly installments. The first installment has already been paid on April 30, 2014.

For the years from 2009 up to 2013, Aral and the Agenzia delle Entrate entered into a settlement that envisages the following payments:

2009: € 329,278.00

2010: € 189,810.00

2011: € 184,210.00

2012: € 179,710.00

2013 up to 2027: € 151,034.00 (which may be offset by Aral against higher VAT credit, if any)

2028: € 25,172.41 (which may be offset by Aral against higher VAT credit, if any)

On the basis of the above settlement, Aral already set an allowance for € 2,250,000.00 in its 2013 financial statements, which covers all expenses, penalties and interest costs related to this matter.

Critical Accounting Policies and Estimates

We believe the following accounting policies and estimates are most critical to aid in understanding and evaluating our reported financial results.

Basis of consolidation

All majority-owned subsidiaries in which CR&P has both voting share and management control are consolidated. All significant intercompany accounts and transactions are eliminated. Subsidiaries over which control is achieved through other means, such as stockholder agreements, are also consolidated even if less than 51% of voting capital is held. The equity attributable to non-controlling interests in subsidiaries is shown separately in the consolidated financial statements.

Basis of presentation

The consolidated financial statements for the ~~nine~~three months ended ~~September~~March 3031, ~~2013~~2014 and for the fiscal year ended December 31, ~~2012~~2013 are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

The Euro is the functional currency of all companies included in these consolidated financial statements.

The amounts presented have been rounded to the nearest thousand.

Acquisitions

Cash and cash equivalents

1819

Accounts receivable & Allowance for doubtful accounts

Accounts receivable represents trade obligations from customers that are subject to normal trade collection terms, without discounts. The Company periodically evaluates the collectability of its accounts receivable and considers the need to record or adjust an allowance for doubtful accounts based upon historical collection experience and specific customer information. Actual amounts could vary from the recorded estimates. After the recognition ~~The~~of loss on receivables for doubtful accounts in the statement of operations of the three-month period ended March 31, 2014, the Company has determined that as of ~~September~~March 3031, ~~2013~~2014 and December 31, ~~2012~~2013 no allowance for doubtful accounts was required. The Company does not require collateral to support customer receivables.

Investments

Investments in unconsolidated affiliates over which we exercise significant influence, but do not control, including joint ventures, are accounted for using the equity method.

Investments in unconsolidated affiliates over which we are not able to exercise significant influence are accounted for under the cost method.

Property, plant and equipment

Capitalization ceases when construction is interrupted for an extended period or when the asset is substantially complete.

Where funds are borrowed specifically for the purpose of acquiring or constructing a qualifying asset, the amount of interest costs to be capitalized in a period on that asset is the actual interest cost incurred on the borrowing during the period.

Depreciation is charged on a straight-line basis over the estimated remaining useful lives of the individual assets. Depreciation commences from the time an asset is put into operation. Depreciation is not charged on assets to be disposed of or on land. The range of the estimated useful lives is as follows:

- Buildings and constructions: 33 – 66 years

Machinery and equipment: 2 – 20 years

Others: 5 years

Long-Lived Assets

Assets and liabilities held for resale

In connection with the strategy of concentrating in the portfolio of hotel, power, and plantations investments, in the periods presented we entered into various negotiations with potential purchasers to sell non-hotel assets. Most of these sales concluded at the end of September 30, 2012, some residual non-hotel assets sold in 2013.

The realized value of these assets are higher than the net asset carrying value and that resulted in a gain on discontinued operations.

Goodwill and Other Intangible Assets

We perform the allocation based on our knowledge of the reporting unit, the market in which they operate, and our overall knowledge of the hospitality industry.

Leasing

All lease agreements of the Company and its subsidiaries as lessees are accounted for as finance leases. The Company recognizes the asset and associated liability on its balance sheet. Finance leases are capitalized at the beginning of the lease at the lower of the fair value of the leased property and the present value of minimum lease payments. Each installment of the lease is apportioned between the liability and finance charges so as to achieve an equal reduction in capital due for each payment made at constant rate on the remaining financial balances.

Derivative financial instruments

As of ~~December~~March 31, ~~2012~~ ~~there~~2014 ~~are~~and noDecember ~~derivative instruments. During 2012~~31, ~~there was only one derivative instrument hedging the risk of variable interest rates (an “interest rate cap”)~~2013, ~~the notional amount of which was € 4 million. This derivative instrument hedges~~ ~~the~~there ~~risk~~are ~~from~~no ~~change of interest rate on a mortgage loan facility with “bullet” repayments originally of € 8 million of which € 6.6 million is outstanding. This~~ derivative ~~was divested as part of our plan to focus on hotels only as of September 30, 2012~~instruments.

Shareholder loans

Shareholder loans to the Company are all non-interest bearing. Italian law provides that the shareholders loans to a limited liability company ("S.r.l.") are not preferred and their repayment is subordinated to other categories of debt. As a result all shareholder loans are classified as non-current liabilities.

Severance indemnity fund

The severance indemnity fund required by Italian law is a liability similar to a defined benefit plan, which, however, according to Italian accounting principles, is not subject to discounting. Given the small number of Company employees any difference between the present provisions in the financial statements prepared in accordance with Italian GAAP and discounted value of these benefits is considered to be immaterial.

Revenue Recognition

Our revenues are derived from rent we receive according to rental agreements we have in place with hotel management companies. The majority of our rent is fixed and payable monthly. The fixed agreements with set increasing rental rates are recognized on a straight line basis. We recognize additional revenue that is variable based on a percentage of the operating profit of our rented hotels only when the contingency of baseline target has been met.

Taxes

Income taxes

Results of Operations

For the ~~nine~~three months ended ~~September~~March 3031, ~~2013~~2014 and ~~September~~March 3031, ~~2012~~2013

€’000	~~Nine~~Three ~~Months~~months ~~Ended~~ended			~~Nine~~Three ~~Months~~months ~~Ended~~ended
	September 30,			September 30,
	March 31,			March 31,
	2013			2012
	2014			2013
	Unaudited			Unaudited
Revenue from operations	€	1,~~807~~768		€	~~3,254~~840
Direct operating and selling, general and administrative costs
Direct operating costs		401,286			~~576~~137
Selling, general and administrative costs		~~1,081~~254			1287
Amortization and depreciation		~~1,752~~555			~~2,158~~525
Total direct operating, selling, and administrative costs		2,~~873~~095			~~2,735~~949
Operating Profit/(Loss)		(~~1,066~~327	)		~~519~~(109	)
Interest income		~~523~~130			103
Interest expenses		~~1,670~~492			~~1,775~~(544	)
Other income		-			17
Profit/(Loss) from continuing operations, before income taxes		(689	)		(550	)
Loss from continuing operations, before income taxes		(2,214	)		(1,239	)
Income taxes		-			-
Income taxes					113
Profit/(Loss) from continuing operations, net of income taxes		(689	)		(550	)
Loss from continuing operations, net of income taxes		(2,214	)		(1,352	)
Net profit/(loss) from operations of discontinued operations, after taxes		-			8
Net loss from operations of discontinued operations, after taxes		-			(19	)
Net profit/(loss) on disposal of discontinued operations, after taxes		-			-
Net income/(loss) on disposal of discontinued operations, after taxes		(32	)		3,565
Net profit/(loss) from discontinued operations		-			8
Net profit/(loss) from discontinued operations		(32	)		3,546
Consolidated net profit/(loss) for the period		(689	)		(542	)
Consolidated net profit/(loss) for the period		(2,246	)		2,194
Less net loss attributable to non-controlling interests in the consolidated subsidiaries					10
Less net loss attributable to non-controlling interests in the consolidated subsidiaries		100			44
Net profit/(loss) attributable to owners of Southern States Sign Company		(689	)		(532	)
Net profit/(loss) attributable to owners of Southern States Sign Company	€	(2,146	)	€	2,238

Revenues

Revenues for the ~~nine~~ three months ended ~~September~~March 3031, ~~2013~~2014, ~~were~~increased €approximately 1€928,~~807,~~000, asor 110.5%, compared to ~~€ 3,254,000 for~~ the ~~nine~~three months ended ~~September 30~~March 31, ~~2012~~2013. ~~The~~ ~~decrease~~This ofincrease ~~approximately € 1,447,000, or 44%~~ is due mainly to the ~~renegotiation~~consolidation into the Company’s accounts of the ~~management~~revenues ~~agreement~~generated by the management of the Ripa Hotel, ~~which~~now ~~resulted~~directly inmanaged athrough ~~significant~~CR&P’s ~~reduction~~subsidiary, ofIBH ~~the~~Ripa ~~annual rental fee~~Srl.

Direct Operating Costs

Direct Operating Costs for the ~~nine~~three months ended ~~September~~March 3031, ~~2013~~2014, ~~was~~increased approximately € 401,149,000, asor 837%, compared to ~~€ 576,000 for~~ the ~~nine~~three months ended ~~September 30~~March 31, ~~2012~~2013. ~~This decrease of approximately € 535~~Again,~~000,~~ this orincrease ~~93%~~ is ~~due~~ mainly due to the ~~replacement~~consolidation ofinto ~~direct~~the ~~management~~Company’s accounts of the ~~Galzignano Hotel~~revenues &generated ~~Resort~~by ~~with~~the ~~third~~management of ~~party~~the ~~management~~Ripa Hotel.

Selling, General and Administrative Costs

Selling, General and Administrative costs for ~~nine~~the three months ended ~~September~~March 3031, ~~2013~~2014 and ~~2012~~March 31, 2013, were approximately € 1254,~~081,~~000 and € 1287,000, respectively. Such expenses consist primarily of salaries and personnel related expenses, occupancy expenses, sales travel, consulting costs and other expenses. ~~This~~The ~~increase~~decrease is ~~mainly due to the advisory costs in connection with the Share Exchange and pre-listing process~~immaterial.

Amortization and Depreciation

Amortization and depreciation for the ~~nine~~ three months ended ~~September~~March 3031, ~~2013~~2014 and ~~2012~~March 31, 2013 were approximately € 1555,~~752,~~000 and € 2525,~~158,~~000, respectively. ~~Such expenses consist primarily of depreciation of properties, plant and equipment held by CR&P and its subsidiary, Aral Immobiliare, S.r.l.~~ The decrease is ~~of approximately € 406,000 was mainly due to the revaluation of the useful life of the assets~~immaterial.

Interest Income

Interest income for the ~~nine~~three months ended March ~~September 30~~31, ~~2013~~2014 and ~~2012~~March 31, 2013 was approximately €a ~~523,000~~gain ~~and~~of € 0130,000 ~~respectively.~~and ~~The~~a ~~increase~~gain ~~was mainly due to the interest income related to the receivable~~ of € 8103,~~890,~~000, ~~from~~respectively. ~~Masoledo~~The ~~in connection with the divestment~~increase ofis ~~non-hotel assets which occurred during September, 2012~~immaterial.

Interest Expense

Interest expense for the ~~nine~~three months ended March ~~September 30~~31, ~~2013~~2014 and ~~2012~~March 31, 2013 was approximately € 1492,~~670,~~000 and € 1544,~~775,~~000, respectively. The decrease ~~was~~ ~~due~~is ~~to the efficiency in management of the Group’s liquidity~~immaterial.

Other Income

Other Income for the nine months ended September 30, 2013 and 2012 was approximately € 0 and € 17,000, respectively. The amount shown in 2012 was immaterial.

Discontinued operations

During the nine months ended September 30, 2013, we completed the sale of non-hospitality subsidiaries to a related party (Masoledo, owned directly and indirectly by Mr. Conte). In order to focus on the hospitality business, in April, 2013, the Company sold the property located in Via Benaco, Milan (Italy). The property has been owned under a capital lease contract, which has been transferred to the acquirer with no-cash inflow paid. The divestment generated a loss on disposal of € 32,000, net of taxes.

During the nine months ended September 30, 2012, we continued the selling of non-hospitality subsidiaries to a related party (Masoledo) for a gain of € 3,565,000, net of taxes. The net loss from operations of discontinued operations was € 19,000. We have no continuing involvement with any divested subsidiary.

Income Taxes

Income taxes for the ~~nine~~ three months ended March ~~September 30~~31, ~~2013~~2014 and ~~2012~~March 31, 2013 were approximately € 0 ~~and € 113,000, respectively~~. ~~The decrease was immaterial.~~

Going concern considerations

Notwithstanding the losses recorded in 2013 and in the three months ended March 31, 2014, we expect to remain in operation for the foreseeable future on the basis of the strategies we are currently implementing, which will have a positive impact on the profitability of our business in the future years. Therefore we have the ability to continue as a going concern for a long and reasonable period following the date of the financial statements.

Liquidity and Capital Resources

For the ~~nine~~three ~~month~~months ~~periods~~ ended ~~September~~ 30March 31, ~~2013~~2014 and ~~2012~~2013

As of ~~September~~March 3031, ~~2013,~~ 2014 we had cash and cash equivalents of approximately € 88414,000, negative working capital of approximately € 4,~~536~~988,000 and ~~retained~~accumulated ~~earnings~~loss of approximately € 54,~~218~~155,000.

Cash Flows from Operating Activities

Our operating activities resulted in net cash used in operating activities of approximately € 152,000 for the nine months ended September 30, 2013, as compared to approximately € 13,701,000 in cash used in the nine months ended September 30, 2012.

~~The~~Cash ~~net~~Flows ~~cash used in operating activities for the nine months ended September 30, 2013 reflects a net loss of approximately € 2,246,000, a net loss~~ from ~~sale~~Operating of discontinued operations of approximately € 32,000 and a depreciation and amortization of approximately € 1,752,000. Changes in assets and liabilities included a decrease in trade receivables of approximately € 33,000, a decrease in related party receivables of approximately € 512,000, an increase in other assets of approximately € 64,000, an increase in trade payables of approximately € 456,000, an increase in related party payables of approximately € 1,196,000, a decrease in other payables of approximately € 415,000 and an increase in VAT taxes receivable of approximately € 527,000.Activities

~~The~~Net ~~net~~ cash ~~used~~provided in by operating activities ~~for the nine months ended September 30, 2012 reflects a net profit of approximately € 2,194,000, a net~~ ~~loss~~was ~~from operations on discontinued operations of~~ approximately € 19645,000 ~~and~~for athe ~~depreciation~~three ~~and~~months ~~amortization~~ended ofMarch ~~approximately € 2~~31,~~158,000,~~ ~~offset by a gain on disposal of discontinued operations of approximately € 3~~2014,~~565,000.~~ ~~Changes~~compared into ~~assets and~~the ~~liabilities~~net ~~included~~cash aused ~~decrease in trade receivables~~ of approximately € ~~1,608,000, a decrease in related party receivables~~ ~~of approximately € 19~~10,~~211,~~000, afor decrease in other receivables of approximately € 243,000, an increase in other assets of approximately € 96,000, a decrease in trade payables of approximately € 890,000, an increase in other payables of approximately €973,000, an increase in VAT tax receivable of approximately € 1,475,000 and an increase in other liabilities of approximately €6,883,000. The net cash used in operating activities of discontinued operations in the ~~nine~~three months ended ~~September~~ ~~30,~~March ~~2012 was approximately € 6~~31,~~966,000~~ 2013.

The net cash used in operating activities for the three months ended March 31, 2014 reflects a net loss of approximately € 689,000 offset by a depreciation and amortization of approximately € 555,000. Changes in assets and liabilities included an increase in trade receivables of approximately € 83,000, a decrease in related party receivables of approximately € 297,000, a decrease in advanced payments on purchases of property of approximately € 4, an increase in other assets of approximately € 112,000, an increase in trade payables of approximately € 1,022,000, an increase in related party payables of approximately € 617,000, a decrease in other payables of approximately € 87,000, a decrease in VAT taxes receivable of approximately € 110,000 and a decrease in other liabilities of approximately € 218,000.

The net cash used in operating activities for the three months ended March 31, 2013 reflects a net loss of approximately € 542,000, a net gain from operations on discontinued operations of approximately € 8,000 and a depreciation and amortization of approximately € 525,000. Changes in assets and liabilities included a decrease in trade receivables of approximately € 236,000, a decrease in related party receivables of approximately € 198,000, an increase in other receivables of approximately € 2,000, a decrease in advanced payments on purchases of property of approximately € 6,000, a decrease in other assets of approximately € 85,000, an increase in trade payables of approximately € 759,000, an increase in related party payables of approximately € 143,000, an increase in other payables of approximately € 58,000, an increase in VAT taxes receivable of approximately € 78,000 and an increase in other liabilities of approximately € 1,000. The net cash used in operating activities of discontinued operations was approximately € 62,000.

Cash Flows from Investing Activities

The net cash used in investing activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2013~~2014 of approximately € ~~269~~692,000 consist primarily of ~~other~~the ~~investing changes~~cash ~~(approximately~~outflow €due ~~337,000~~to the purchases of ~~cash~~plant, ~~outflow)~~equipment and intangible assets related to the hotel-management business.

The net cash used in investing activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2012~~2013 of approximately € 9152,~~155,~~000 consist ~~essentially~~primarily of the cash outflow ~~provided~~(approximately € by167,000) ~~investing~~due ~~activity~~to onthe ~~discontinued~~purchases ~~operations~~of intangible assets.

Cash Flows from Financing Activities

Net cash ~~provided~~used by in financing activities for the ~~nine~~three months ~~period~~ ended ~~September~~March 3031, ~~2013~~2014 was approximately € 68266,000, which was mainly due to ~~reimbursement of bank overdrafts of approximately € 2,012,000, offset by a cash inflow due~~ to the ~~net~~reimbursement ~~issuance~~ of ~~shareholders~~long term ~~loans~~financial ~~(approximately € 2,070,000)~~debt. Net cash ~~provided~~used in financing activities for the ~~nine~~three months ~~period~~ ended ~~September~~March 3031, ~~2012~~2014 was approximately € 4165,~~445,~~000, which was mainly due to ~~the~~net ~~issuance~~reimbursement of ~~shareholder loans of approximately € 6,136,000, offset by repayment of~~ long-term financial debt ~~of approximately € 231~~ and ~~the~~bank ~~cash outflow related to the investing activity of discontinued operations (approximately € 2,019,000)~~overdrafts.

Future Liquidity Needs

We have evaluated our expected cash requirements over the next twelve months, which ~~include~~includes, but ~~are~~is not limited to, interest payments, capital repayments, capital expenditures and working capital requirements. ~~While~~Whilst we are able to manage certain aspects of these cash requirements, the level of income, rate of repayment of related party receivables and cost of debt, where variable, are outside of our control. We are also planning, but as of yet have no contractual commitments, to make acquisitions in the future, and while we wish to carry out some of these acquisitions through the issuance of shares, there can be no assurance that the vendors will accept such consideration, and consequently, we may have to effect such acquisitions using cash. Also, we plan to further borrow funds in order to finance these acquisitions.

~~Based~~In onorder ~~existing~~to ~~assets~~optimize our cash flow, we ~~expected~~are ~~related~~currently ~~party~~negotiating ~~receivables~~with ~~repayments,~~the ~~business~~lenders ~~level~~(a pool of four banks) of the mortgage loan in place on the Galzignano property, ~~debt~~in order to achieve better terms and ~~interest~~conditions ~~rates,~~(specifically weto ~~believe~~lengthen ~~our~~the ~~current~~maturity ~~resources~~of ~~are~~the ~~sufficient~~ loan, currently set for atOctober ~~least~~2018, and to reduce interest costs).We are positive about the ~~next~~favorable ~~twelve~~acceptance ~~months~~of our requests.

~~However,~~We toare ~~implement the~~also ~~business~~finalizing ~~plan~~with ~~for~~UniCredit ~~the~~Leasing SpA ~~expansion~~a moratorium of ~~our~~the ~~assets,~~financial welease ~~will~~regarding ~~require~~the ~~additional~~Ripa ~~financing~~Hotel, inwhereby ~~the~~we ~~future.~~will ~~The~~have ~~timing~~to ofpay ~~our~~interests ~~need~~only for ~~additional~~ ~~capital~~a ~~will~~3 ~~depend~~year onperiod starting ~~the~~in ~~timing~~September of2014. ~~the~~This ~~completion~~will ofmake ~~the~~available ~~planned~~to ~~acquisitions,~~us the ~~terms~~financial ofresources ~~such~~required ~~acquisitions and whether existing lenders are willing~~ to ~~continue~~renovate tothe ~~provide~~last ~~financing~~78 ~~upon~~rooms aof ~~change~~the hotel ofwhich ~~control~~still ofneed ~~such~~to ~~assets~~be completed.

We are inalso ~~the~~planning, ~~process~~but as yet have no contractual commitments, to make acquisitions and whilst we wish to effect at least some of ~~developing~~these ~~two~~acquisitions ~~properties~~through ~~which~~the ~~will~~issue of ~~require~~shares ~~capital~~there ~~expenditure~~can –be no certainty that the ~~Green~~vendors ~~Park~~will ~~Hotel~~accept such consideration and we may wish, ~~which~~to isin ~~being~~any ~~converted~~case, ~~into~~to effect ~~apartments~~such acquisitions using cash. Further, ~~and~~we plan to put in place new borrowings to finance the ~~expansion~~assets ofto be acquired or take-on existing borrowings secured on the ~~Masseria~~assets ~~Hotel~~planned to be acquired.

~~While~~Based weon ~~have~~existing ~~already started the first part of the expansion of the Masseria Hotel~~assets, ~~the~~expected ~~second~~related party ~~part~~receivables ~~of the expansion~~repayments, ~~including~~business ~~the creation of an additional 24 rooms~~level, ~~will~~debt ~~take~~and ~~place~~interest inrates ~~the~~we ~~first~~believe ~~quarter~~our ofcurrent ~~2014.~~resources ~~It is expected that the first part of the development will cost an additional € 400,000. We~~ are ~~currently~~sufficient negotiating a loan in this amount. The terms of the loan are expected to include interest only during the development period and then bullet repayment to be effected by entering into longer term mortgage financing secured by the property. At present time, no internal capital is expected to be required for ~~this~~at ~~expansion. It is expected that the second~~least ~~part of~~ the ~~expansion~~next ~~will~~twelve ~~cost approximately € 600,000~~months.

~~The~~ However, ~~development~~to ofimplement the ~~Green~~business ~~Park~~plan ~~Hotel~~for ~~should~~the ~~start~~expansion of our assets we will require additional financing in the ~~second~~future. ~~half~~The timing of ~~2014.~~our Itneed isfor additional ~~expected~~capital ~~that~~will depend on the ~~Green~~timing ~~Park~~of ~~Hotel~~the ~~conversion~~completion ~~will~~of ~~cost~~the ~~approximately~~planned acquisitions, the terms of such acquisitions and €whether ~~4.4~~existing ~~million~~lenders ~~over~~are willing to continue to provide finance upon a ~~period~~change of 18control ~~months~~of such assets.

~~Work~~We ~~will~~are ~~not~~in ~~begin on~~ the ~~development~~process of ~~the~~developing ~~Green~~one property ~~Park~~which ~~Hotel~~will ~~until~~require ~~the~~capital ~~required~~expenditure ~~financing~~– ~~has~~the ~~been~~Green ~~agreed~~Park ~~upon~~Hotel ~~with~~being ~~the~~converted ~~lending~~to ~~institutions~~apartments.

The development of the Green Park Hotel should start in the first half of 2015. It is expected that the Green Park Hotel conversion will cost approximately €4.4 million ($ 5.7 million) to be spent over a period of 1½ years from commencement in 2015.

In each case no work, beyond planning and negotiation of finance, has been undertaken and no work will start until the required financing has been agreed and contracted with lending institutions.

Commitments and contingencies

The risk provisions or negative adjustments are recognized when in accordance with the opinion of legal counsel the liability is probable and measurable.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4.

Controls and Procedures

As required by paragraph (b) of Rules 13a-15 or 15d-15 under the Exchange Act, our principal executive officer and principal financial officer evaluated the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this quarterly report on Form 10-Q. Based on this evaluation, our sole chief executive officer and principal financial officer concluded that as of ~~September~~March 3031, ~~2013~~2014, these disclosure controls and procedures were effective to ensure that the information required to be disclosed by the Company in reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and include controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s management, including the Company’s principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

For a discussion relating to current legal proceedings of the Company, please see Part II, Item I, “Legal Proceedings” of our Form 10-QK, previously filed with the Securities and Exchange Commission on ~~August~~May 1416, ~~2013~~2014.

Item 1A.

Risk Factors

A smaller reporting company is not required to provide the information required by this Item.

Item 2.

Unregistered Sales of Securities and Use of Proceeds.

None.

Item 3.

Defaults Upon Senior Securities.

None.

Item 4.

Mine Safety Disclosures

Not applicable.

Item 5.

Other Information.

None.

Item 6. Exhibits .

Exhibit Number		Description of Exhibit

3.1		Articles of Incorporation (incorporated by reference to Exhibit 3.1 of the Registration Statement on Form S-1 filed on January 25, 2011)

3.2		Bylaws (incorporated by reference to Exhibit 3.2 of the Registration Statement on Form S-1 filed on January 25, 2011)

31.1*		Certification of Chief Executive Officer and Principal Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1**		Certification of Chief Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101***		Interactive Data Files of Financial Statements and Notes

Filed herewith.

Furnished (and not filed) herewith pursuant to Item 601(b)(32)(ii) of Regulation S-K under the Exchange Act.

***

Pursuant to Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act, except as shall be expressly set forth by specific reference in such filing or document.

SIGNATURES

Pursuant to 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 States Sign Company
November 15, 2013	By:	/s/ Sergio Schisani
July 25, 2014	By:	/s/ Sergio Schisani
		Sergio Schisani
		Chief Executive Officer and Principal Financial Officer

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