SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED September 30, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to _____________
Commission file number
U.S.A. SUNRISE BEVERAGES, INC.
(Exact name of registrant as specified in its charter)
SOUTH DAKOTA 46-0439668
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
P.O. BOX 938 Spearfish, SD 57783
(Address of principal executive (Zip Code)
offices)
(605) 642-5560
(Registrant's telephone number including area code)
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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
The number of shares outstanding of the registrant's preferred stock as of
September 30, 1999 is 400,000 shares, par value $0.01, stated value $3.00
The number of shares outstanding of the registrant's common stock as of
September 30, 1999 is 4,460,809 shares, par value $0.01
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Balance Sheets - September 30, 1999 (unaudited) and
December 31, 1998.
Consolidated Statement of Operations for Quarter and nine months Ended
September 30, 1999 and 1998 (unaudited)
Consolidated Statement of Cash Flows - Nine months Ended September 30,
1999 (unaudited)
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Signatures
(1) Liquidity
As of September 30, 1999, Registrant had cash of $1,022.00. Cash
resources have been generated by advanced loans to the Company from an
officer of the Company and Paul Miller Trust and have been used
primarily to fund operating expenses. Registrant is not aware of any
additional sources of liquidity.
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<PAGE>
U.S.A. Sunrise Beverages, Inc.
Balance Sheet
Assets
<TABLE>
<CAPTION>
September 30, 1999 December 31, 1998
------------------ -----------------
<S> <C> <C>
Current Assets
Cash $ 1,022 $ 2,874
Supplies Inventory 1,350 1,350
----------- -----------
Total Current Assets 2,372 4,224
Property and Equipment Net 3,984 3,984
----------- -----------
Total Assets $ 6,356 $ 8,208
=========== ===========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Accounts Payable $ 23,213 $ 24,897
Notes Payable 176,124 165,564
Accrued Interest 39,614 24,029
Dividends Payable 120,000 120,000
----------- -----------
Total Current Liabilities 358,951 334,490
Long Term liabilities
Loan Shareholder's -Officers 95,853 99,861
----------- -----------
Total Long Term Liabilities 95,853 99,861
STOCKHOLDER'S EQUITY
Preferred stock, $0.01 par value
400,000 shares issued and
outstanding 4,000 4,000
Common stock, $0.01 par value
3,750,000 shares issued and
outstanding 1998. 4,460,809
issued & outstanding 9/30/99 44,608 37,500
Additional paid in capital 1,097,801 1,097,801
Deficit accumulated during
the development stage (1,594,857) (1,565,444)
----------- -----------
Total stockholder's
Equity (deficit) (448,448) (426,143)
----------- -----------
Total Liabilities and
Stockholder's Equity $ 6,356 $ 8,208
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE>
U.S.A. Sunrise Beverages, Inc.
Consolidated Statements of Operations
For Quarter Ended September, 1999 and 1998 (unaudited)
and Nine Months Ended September 1999 and 1998 (unaudited)
<TABLE>
<CAPTION>
Quarter Quarter Nine months Nine months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Revenues $ -- $ -- $ -- $ --
Foreclosure Gain -- 35,939 -- 35,939
Cost of Sales -- -- -- --
----------- ----------- ----------- -----------
Gross Profit -- 35,939 -- 35,939
Selling, general and
administrative expenses 2,817 2,855 13,827 24,059
----------- ----------- ----------- -----------
Net Income (loss)
from operations (2,817) 33,084 (13,827) 11,880
Other Expense
Interest expense (6,478) (4,393) (15,585) (27,761)
Depreciation Expense -- -- (--) (7,909)
----------- ----------- ----------- -----------
Net Income (loss) $ (9,295) $ 28,690 $ (29,412) $ (23,789)
=========== =========== =========== ===========
Basic net Gain (loss)
per share $ (0.0021) $ 0.0072 $ (0.0069) $ (0.0060)
Weighted average shares
outstanding 4,460,809 3,962,500 4,253,603 3,962,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
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U.S.A. Sunrise Beverages, Inc.
Consolidated Statements of Cash Flows
(unaudited)
Nine Months Ended
September 30,
1999 1998
-------- --------
Cash flows from operating activities
Net Income (loss) ($29,412) ($23,789)
Adjustments to reconcile to net loss
to net cash (used in) provided by
operating activities
Depreciation Expense 1,427 8,491
Change in Inventory (1) 2
Change in accounts payable 3,043 17,323
Change in other current liabilities 39,614 -0-
Dividends payable preferred stock 60,000 -0-
Change in short term notes payable 4,602 (30,084)
-------- --------
Net cash provided by (used by)
operating activities 79,273 (28,057)
-------- --------
Cash Flows from Investment Activities
Investment Equipment, Plant -0- (456)
-------- --------
Net Cash Provided by (Used by)
Investing Activities -0- (456)
Cash flows from financing activities
Repayment of loans from shareholders (489) 13,998
Additional paid in capital (84,940) 14,563
Sale of Capital Stock 7,108 -0-
-------- --------
Net Cash Provided by (Used by)
Financing Activities (78,321) 28,561
-------- --------
Net Increase (Decrease) in Cash 952 48
Cash at Beginning of Period 70 22
-------- --------
Cash at End of Period $ 1,022 $ 70
======== ========
The accompanying notes are an integral part of these financial statements.
NOTE 1 - BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited consolidated financial
statements contain all adjustments necessary to present fairly the financial
position of U.S.A. Sunrise beverages, Inc. as of September 30, 1999 and the
results of operations and cash flows for the periods presented. Certain
information and footnotes disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to the securities and Exchange Commission's rules
and regulations. The results of operations for the periods presented are not
necessarily indicative of the results to be expected for the full year.
Management believes the disclosures made are adequate to ensure that the
information is not misleading. The accompanying
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<PAGE>
consolidated financial statements and related notes should be read in
conjunction with the audited financial statements in Form 10-SB of the
Registrant, and notes thereto, for the year ended December 31, 1998.
In the opinion of management, the unaudited financial statements include all
necessary adjustments (consisting of normal, recurring accruals) for a fair
presentation of the financial position, results of operations and cash flows for
the interim periods presented. The results of operations for the quarter ended
September 30, 1999 and 1998 and the nine-month periods ended September 30, 1999
and 1998, are not necessarily indicative of the operating results to be expected
for a full year. The Company has approximately $1,000,000 in net operating loss
carryforwards available to reduce federal taxable income in future periods. The
tax effect of these losses, with the exception of $24,500 related to the
extraordinary item for 1998, has been offset by a full valuation allowance.
2. Reclassification-Adjustments:
Certain prior year amounts have been reclassified and adjusted to conform
to current year presentation.
In September 1999, the Company issued 710,809 shares of common stock, of
which 550,809 were unrestricted and 160,000 restricted. The 550,809 shares were
issued by the Company as a reimbursement to certain stockholder's for their use
of shares in conjunction to provide funds to the Company. The balance of 160,000
shares of common stock issued relates to contracts and consultant fees.
MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
U.S.A. Sunrise Beverages, Inc., (the "Company") was incorporated under the laws
of the state of South Dakota August 13,1990. The Company intends to restart its
production of exotic soft drinks and spring water. The Company owns the rights
to produce and distribute ten beverage flavors including Papaya Sunrise and its
slogans "The Drink of Paradise". These rights were acquired by the Company at a
value of technology transfer at $1,144,500, or $7.50 per share. For financial
statement purposes, the shares have been registered at $0.01 per share
representing the par value at the time of transfer. The Company also owns the
rights to purchase, in bulk, water from a spring located in the Black Hills, in
Spearfish, South Dakota. This water will be marketed under the names of Dakota
Springs and Rushmore Springs, under the slogan "Water of Presidents".
Although there are no recent distribution agreements in place, management has
kept its contacts and familiarity within the soft drink industry and with the
experience and support of the Company's strong management and sales force,
management believes it will re-establish channels for the distribution of its
products through distributors and manufactures. Past contracts and agreements
include Shasta, McLane, McLane International and Full Service Beverages.
On September 10, 1999, the Company entered into an Advisory agreement with A-Z
Professional Consultants, Inc., a Utah corporation, whereby the company will be
provided the assistance in effecting the purchase of business and assets
relative to its business and growth strategy, general business and financial
issues consulting the introduction of the Company to brokers and dealers and
assisting in the preparation of documents for use by market makers, public
relation firms and consultants and others that may assist the Company in its
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<PAGE>
plans and future and create a research report for the company (the 'Service').
As consideration for these consulting and services the Company has issued the
consultant 100,000 shares of restricted common stock.
On September 30, 1999, Olsen Payne and Company, filed with NASD on behalf of the
Company, an application for the securities of the Company to be quoted on the
OTC Bulletin Board under the requirements of the Securities and Exchange
Commission (SEC) Rule 15c2-11 and the filing and information requirements of
NASD RULE 6740 of the NASD by-laws.
FORWARD LOOKING INFORMATION
Certain statements included or incorporated by reference in this Form 10-Q
constitute "Forward Looking Statements" within the meaning of section 27A of the
securities Act of 1933, as amended (The "Securities Act"), and Section 2IE of
the Exchange Act. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause our actual results,
levels of activity, performance or achievements expressed or implied by such
forward looking statements. In addition forward looking statements generally can
be identified by the use of forward looking terminology such as "may", "will",
"expect", "intend", "anticipate", "estimate", "believe", or "continue" or the
negative thereof or variations thereon or similar terminology. Although the
Company believes that the expectations reflected in the forward- looking are
reasonable, we can no give assurance that such expectations will prove to have
been correct. Important factors that could cause actual results to differ
materially from the Company's expectations are disclosed in our Form 10-SB for
the year ended December 31, 1998.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
To the best of its knowledge, Registrant is not party to, nor is any
of its property the subject of, any pending material legal
proceedings, except a certain note payable to a stockholder, currently
in default and subject to a June, 1997 judgment for $72,564 plus
statutory interest at 5%.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
U.S.A Sunrise Beverages, Inc.
----------------------------
(Registrant)
Date: June 11, 1999 /s/ Omar Barrientos
- --------------------------------
Omar Barrientos,
President, Chief Executive Officer and
Treasurer)
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 1,022
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 1,350
<CURRENT-ASSETS> 2,732
<PP&E> 3,984
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,356
<CURRENT-LIABILITIES> 454,804
<BONDS> 0
0
4,000
<COMMON> 44,608
<OTHER-SE> 1,097,801
<TOTAL-LIABILITY-AND-EQUITY> 6,356
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,817
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,478
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> (0.002)
<EPS-DILUTED> (0.002)
</TABLE>
