U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
X...Quarterly report under section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended November 30, 1999.
....Transition report under section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required] for the transition period
from _________ to _________.
Commission File No: __000-23559__
SUNBURST ACQUISITIONS III, INC.
---------------------------------------
(Name of small business in its charter)
Colorado 84-14320001
- ---------------------- -----------------------
(State or other (IRS Employer Id. No.)
jurisdiction of Incorporation)
4807 South Zang Way Morrison, Colorado 80465
- -------------------------------------------------------------------
(Address of Principal Office) Zip Code
Issuer's telephone number: (303) 979-2404
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 12
months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes __X__ No _____
Applicable only to issuers involved in bankruptcy proceedings during
the past five years
Check whether the issuer has filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.
Yes _____ No _____
Applicable only to corporate issuers
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date. At 11/30/99 the
following shares of common were outstanding: Preferred Stock, no par value,
0 shares; Common Stock, no par value, 33,303,540 shares.
Transitional Small Business Disclosure
Format (Check one):
Yes _____ No __X__
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS
(a) The unaudited financial statements of registrant for the
three months ended November 30, 1999, follow. The financial statements
reflect all adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the interim period
presented.
SUNBURST ACQUISITIONS III, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
Quarter Ended November 30, 1999
(Unaudited)
<PAGE>
CONTENTS
Accountants' report 1
Balance Sheet 2
Statements of Loss and Accumulated Deficit 3
Statements of Cash Flows 4
Notes to Financial Statements 5-6
<PAGE>
The Board of Directors and Stockholder of
Sunburst Acquisitions III, Inc.
The accompanying balance sheet of the Sunburst Acquisitions III, Inc. (a
development stage company) as of November 30, 1999, and the related statements
of loss and accumulated deficit and cash flows for the period then ended
were not audited by us and according we do not express an opinion on them.
Denver, Colorado
March 22, 2000
COMISKEY & COMPANY
PROFESSIONAL CORPORATION
1
<PAGE>
Sunburst Acquisitions III, Inc.
(A Development Stage Company)
BALANCE SHEET
November 30, 1999
(Unaudited)
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ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,283
Notes receivable 2,000,000
---------
Total current assets 2,001,283
TOTAL ASSETS $ 2,001,283
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 2,862
---------
Total current liabilities 2,862
STOCKHOLDERS' EQUITY
Preferred stock, no par value
20,000,000 shares authorized;
no shares issued and outstanding -
Common stock, no par value;
100,000,000 shares authorized;
33,303,840 shares issued and
outstanding 2,020,435
Additional paid-in capital 1,350
Deficit accumulated
during the
development stage (23,364)
---------
1,998,421
---------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 2,001,283
=========
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
Sunburst Acquisitions III, Inc.
(A Development Stage Company)
STATEMENTS OF LOSS AND ACCUMULATED DEFICIT
(Unaudited)
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For the period
from inception For the three For the three
(August 27, months ended months ended
1997)to November November November
30, 1999 30, 1999 30, 1998
--------------- ------------- ------------
REVENUES $ - $ - $ -
--------------- ------------- ------------
EXPENSES
Amortization 300 - 15
Consulting fees 4,935 - -
General office 930 126 -
Legal fees 7,488 3 1,905
Professional fees 4,414 - -
Rent 1,350 150 150
Taxes and licenses 107 - -
Transfer Agent 3,840 1,814 168
-------------- ------------- ------------
Total expense 23,364 2,093 2,238
-------------- ------------- ------------
NET LOSS (23,364) (2,093) (2,238)
Accumulated deficit
Balance, Beginning of period - (21,271) (12,240)
-------------- ------------- ------------
Balance, End of period $ (23,364) $ (23,364) $ (14,478)
============== ============= ============
NET LOSS PER SHARE $ (NIL) $ (NIL) $ (NIL)
============== ============= ============
WEIGHTED AVERAGE NUMBER OF
SHARES OF COMMON STOCK AND
COMMON STOCK EQUIVALENTS
OUTSTANDING 35,858,291 33,457,730 35,471,200
============== ============= ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
Sunburst Acquisitions III, Inc.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
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For the period
from inception
(August 27, For the three For the three
1997) to months ended months ended
November 30, November 30, November 30,
1999 1999 1998
--------------- ------------- -----------
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net Loss $ (23,364) $ (2,093) $ (2,238)
Adjustments to reconcile
net loss to net cash used
by operating activities:
Amortization expense 300 - 15
Rent expense 1,350 150 150
Stock issued for
consulting fees 4,935 - -
Decrease in prepaid expenses - - 474
Increase (decrease) in
accounts payable 2,862 1,714 (385)
Increase in accounts payable
- related party - - 1,430
-------------- ------------- -----------
Net cash used by
operating activities (13,917) (229) (554)
CASH FLOWS FROM
INVESTING ACTIVITIES
Increase in organization costs (300) - -
-------------- ------------- -----------
Net cash used by
investing activities (300) - -
CASH FLOWS FROM
FINANCING ACTIVITIES
Issuance of common stock 7,500 - -
Issuance of preferred
stock 8,000 - -
-------------- ------------- -----------
Net cash provided
financing activities 15,500 - -
-------------- ------------- -----------
Net increase (decrease)
in cash and cash
equivalents 1,283 (554) (554)
CASH AND CASH EQUIVALENTS,
Beginning of Period - 1,512 973
-------------- ------------- -------------
CASH AND CASH EQUIVALENTS,
End of Period $ 1,283 $ 1,283 $ 419
============== ============= ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
Sunburst Acquisitions III, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
November 30, 1999
(Unaudited)
1. Management's Representation of Interim Financial Information
------------------------------------------------------------
The accompanying financial statements have been prepared by Sunburst
Acquisitions III, Inc. without audit pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
as allowed by such rules and regulations, and management believes that the
disclosures are adequate to make the information presented not misleading.
These financial statements include all of the adjustments which, in the opinion
of management, are necessary to a fair presentation of financial position and
results of operations. All such adjustments are of a normal and recurring
nature. These financial statements should be read in conjunction with the
audited financial statements at August 31, 1999.
2. Agreement and Plan of Reorganization
- ------------------------------------
On August 30, 1999, the Company entered into an Agreement and Plan of
Reorganization by and among the Company, Sunburst Subsidiary, Inc., a
California corporation ("Subsidiary"), Workseek.com, a California corporation
("WorkSeek") and American Recruitment Conferences, Inc., a California
corporation ("American"). The Agreement contemplated the merger of American
and WorkSeek ("the Affiliated Companies") into Subsidiary subject to the
satisfaction of certain prescribed conditions, including additional Sunburst
funding through private placements of its securities.
In connection with the Agreement, the Company underwent a 16.16 for 1 forward
stock split of its then outstanding common shares. In addition, and in
anticipation of the merger mentioned above, the Company sold in a private
placement, a total of 1,000,000 post-split common shares at $2.00 per share.
Proceeds were received in the form of $1,400,000 cash and $600,000 in assigned
conversion agreements, under which creditors of American had agreed to convert
prior loans to American into common shares at the rate of $2.00 per share. The
private placement was completed in September 1999.
The cash proceeds from the private placement were advanced to American
pursuant to a promissory note and security agreement in the amount of
$1,400,000. The loan, which is secured by all of American's right title
and interest in accounts, equipment, general intangibles, inventory,
negotiable collateral, and proceeds from the disposition of such collateral,
was due and payable with interest at 10% per year on January 23, 2000.
The Company also agreed to voluntarily cancel approximately 25,822,240
(post-split) common shares as part of the agreement, such that the total
number of shares outstanding after the private placement would be 7,481,600.
5
<PAGE>
On January 13, 2000, the Affiliated Companies entered a demand for arbitration
with the American Arbitration Association seeking a declaration that the
Agreement and Plan of Reorganization was terminated effective January 6, 2000
due to the failure of Sunburst to satisfy certain prescribed conditions
including the raising of additional capital. Sunburst and the Affiliated
Companies are currently negotiating a Reorganization Agreement ("the
Agreement") which will result in the termination of the Agreement and Plan of
Reorganization and the demand for arbitration. This Agreement is expected to
ultimately result in the shareholders of Sunburst receiving approximately
7,481,600 shares of American in consideration of Sunburst's agreement to cancel
all outstanding indebtedness of American and the related security agreements.
These shares are expected to have certain registration rights. American is
also expected to provide to Sunburst $10,000 in cash for the settlement of
obligations related to the termination of the Agreement and Plan of
Reorganization.
6
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATIONS.
Liquidity and Capital Resources
The Company has experienced no significant change in liquidity as
a result of the above mentioned agreement, although the $10,000 expected
from American will offset expenses incurred by the Company for the
attempted merger. Shareholders of the Company will ultimately be
compensated with shares of American stock. The Company's balance sheet for
the period ending November 30, 1999 reflects a current and total asset value
of $2,001,283, primarily in the form of notes receivable. However, the
notes receivable will not be received due to agreements subsequent to the
period ended November 30, 1999 in which the Company forgave the debt in
return for compensation described above.
The Company's business plan is to oversee the compliance of the
Agreement with American to be compensated for the relief of American's debt
to the Company. When the terms of the final Agreement have been met, the
Company plans to dissolve.
Results of Operations
During the period from August 27, 1997 (inception) through
July 1999, the Company engaged in no significant operations
other than organizational activities, acquisition of capital and preparation
for registration of its securities under the Securities Exchange Act of
1934, as amended. No revenues were received by the Company during
this period. Beginning in August 1999, the Company issued additional
shares and raised additional funds in the attempt to merge with American
and WorkSeek. The failure of the merger has left the Company with
insufficient cash flow and capital resources to continue operations.
For the current fiscal year, the Company expects to dissolve
following compliance with the terms of the final Agreement with the
Affiliated Companies.
For the quarters ended November 30, 1999 and 1998, the Company
showed net losses of $2,093 and $2,238, respectively. The decrease in
loss is due primarily to the timing differences related to expenses
incurred in relation to reporting requirements, and general and
administrative expenses.
Need for Additional Financing
The Company believes that its existing capital will not be sufficient
to continue operations, and the Company has no plans to seek additional
financing.
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBIT 27 - FINANCIAL DATA SCHEDULE
There have been no reports on Form 8-K for the quarter ending
November 30, 1999.
<PAGE>
Signatures
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SUNBURST ACQUISITIONS III, INC.
(Registrant)
Date: March 22, 2000
/s/
Michael R. Quinn, Secretary/Treasurer
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET AND STATEMENTS OF LOSS AND ACCUMULATED DEFICIT AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH 10QSB FOR THE QUARTER ENDED November
30, 1999.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Aug-31-2000
<PERIOD-END> Nov-30-1999
<CASH> 1283
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<RECEIVABLES> 2000000
<ALLOWANCES> 0
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<TOTAL-ASSETS> 2001283
<CURRENT-LIABILITIES> 2862
<BONDS> 0
0
0
<COMMON> 2020435
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<TOTAL-LIABILITY-AND-EQUITY> 2001283
<SALES> 0
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<TOTAL-COSTS> 2093
<OTHER-EXPENSES> 0
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<EPS-BASIC> (.000)
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</TABLE>
