SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1996
Commission File Number 0-17165
SUNSTYLE CORPORATION
(Exact name of registrant as specified in its charter)
Florida 59-2905386
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
36460 US 19N Palm Harbor, Florida 34684
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (813) 789-8899
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
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
Title of Each Class Number of Shares
June 30, 1996
Common Stock, $.10 par value 1,096,014
Name of Each Exchange on Which Registered:
None
<PAGE>
PART I - Financial Information
Item 1. Financial Statements
SUNSTYLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
1996 1995
------------ ------------
(Unaudited) (Audited)
ASSETS
Cash $ 195,603 $ 198,600
Notes Receivable 7,633 7,680
---------- ----------
Total Assets $ 203,236 $ 206,280
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes Payable to Former Parent $ 255,000 $ 255,000
Interest Payable to Former Parent 104,806 93,452
Accounts Payable and Accrued Expenses 17,500 17,500
----------- ----------
Total Liabilities 377,306 365,952
----------- ----------
Commitments and Contingencies
Stockholders' Deficit:
Common Stock; $.10 Par Value;
Authorized 10,000,000 Shares;
Issued and Outstanding
1,096,014 Shares 109,601 109,601
Additional Paid-in Capital 1,341,221 1,341,221
Accumulated Deficit (1,624,892) (1,610,494)
----------- -----------
Total Stockholders' Deficit (174,070) (159,672)
----------- -----------
Total Liabilities and
Stockholders' Deficit $ 203,236 $ 206,280
=========== ===========
The accompanying notes are an integral part of
these consolidated financial statements.
<PAGE>
SUNSTYLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE SIX MONTHS ENDED JUNE 30,
1996 1995
---------- -----------
Revenues:
Interest Income $ 4,517 $ 3,308
---------- -----------
4,517 3,308
---------- -----------
Costs and Expenses:
Audit Expense 4,900 1,400
General and Administrative 2,661 9,021
Interest 11,353 12,538
---------- -----------
18,914 22,959
---------- -----------
Net Loss $ (14,397) $ (19,651)
========== ==========
Net Loss Per share $ (.01) $ (.02)
========== ==========
The accompanying notes are an integral part of
these consolidated financial statements.
<PAGE>
SUNSTYLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30,
1996 1995
---------- -----------
Revenues:
Interest Income $ 2,251 $ 1,204
---------- -----------
2,251 1,204
---------- -----------
Costs and Expenses:
Audit Expense 4,900 1,400
General and Administrative 931 2,859
Interest 5,881 6,359
---------- -----------
11,712 10,618
---------- -----------
Net Loss $ (9,461) $ (9,414)
========== ==========
Net Loss Per share $ (.01) $ (.01)
========== ==========
The accompanying notes are an integral part of
these consolidated financial statements.
<PAGE>
SUNSTYLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE SIX MONTHS ENDED JUNE 30,
1996 1995
----------- -----------
Cash Flows from Operating Activities:
Net Loss $ (14,397) $ (19,651)
----------- -----------
Adjustments to Reconcile Net Loss
to Net Cash Provided by
Operating Activities:
Depreciation 0 3,310
Change in Operating Assets and Liabilities:
Notes Receivable 47 174
Interest Payable to Former Parent 11,353 12,538
----------- -----------
Total Adjustments 11,400 16,022
----------- -----------
Net Cash Used in Operating
Activities (2,997) (3,629)
----------- -----------
Net Decrease in Cash (2,997) (3,629)
Cash at Beginning of Period 198,600 101,296
----------- -----------
Cash at End of Period $ 195,603 $ 97,677
=========== ===========
The accompanying notes are an integral part of
these consolidated financial statements.
<PAGE>
SUNSTYLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 1996
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES:
Basis of Preparation
The unaudited financial statements presented herein have
been prepared in accordance with the instructions to Form 10-Q
and do not include all of the information and note disclosures
required by generally accepted accounting principles. These
statements should be read in conjunction with the financial
statements and notes thereto included in the Company's Form
10-K for the year ended December 31, 1995. In the opinion of
management, these financial statements include all
adjustments, consisting only of normal recurring adjustments,
necessary to summarize fairly the Company's financial position
and results of operations. The results of operations for the
period may not be indicative of results to be expected for the
year.
Reclassification
Certain items in the 1995 financial statements have been
reclassified for comparative purposes to conform with the
financial statement presentation used in the 1996 statements.
Federal and State Income Taxes
Substantial losses have been sustained by the Company which
raises considerable doubt as to its ability to continue
operations. As a result of the above, it is unlikely that the
Company will be able to benefit from the approximately
$2,900,500 in tax loss carry forwards available as of December
31, 1995. Therefore, no provision has been made in these
statements for any deferred tax benefit.
NOTE 2 - CONTINGENCIES AND OTHER EVENTS:
The Company is negotiating the settlement of its
outstanding debt to its former Parent. Although it is
possible that a settlement could result in the transfer of
essentially all remaining assets to its former Parent, the
effect of a final settlement cannot be determined at this
time.
In addition to the uncertainty discussed above, the Company
has sustained substantial net losses and has a deficit net
worth at June 30, 1996, of $(174,070). These issues raise
considerable doubt as to the Company's ability to continue
operations. Management has not adopted a plan of liquidation.
The consolidated financial statements do not include any
adjustments that may result from any of the above events.
<PAGE>
SUNSTYLE CORPORATION AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
June 30, 1996
Results of Operations
For the Six Months Ended June 30, 1996 and 1995:
Interest income increased from $3,308 for the six months
ended June 30, 1995, to $4,517 for the six months ended June
30, 1996. Interest expense decreased from $12,538 for the six
months ended June 30, 1995, to $11,353 for the six months
ended June 30, 1996. General and administrative expenses
decreased from $9,021 for the six months ended June 30, 1995,
to $2,661 for the six months ended June 30, 1996. Audit
expense increased from $1,400 for the six months ended June
30, 1995, to $4,900 for the six months ended June 30, 1996.
As a result of the above, the Company had a net loss of
$14,397 in 1996 compared to a net loss of $19,651 in 1995.
For the Three Months Ended June 30, 1996 and 1995:
Interest income increased from $1,204 for the three months
ended June 30, 1995, to $2,251 for the three months ended June
30, 1996. Interest expense decreased from $6,359 for the
three months ended June 30, 1995, to $5,881 for the three
months ended June 30, 1996. General and administrative
expenses decreased from $2,859 for the three months ended June
30, 1995, to $931 for the three months ended June 30, 1996.
Audit expense increased from $1,400 for the three months ended
June 30, 1995, to $4,900 for the three months ended June 30,
1996. As a result of the above, the Company had a net loss of
$9,461 in 1996 compared to a net loss of $9,414 in 1995.
Liquidity and Capital Resources
Due to continuing losses in a depressed market, the Company
ceased construction activities and terminated all employees
during May of 1991. All remaining real estate assets were
sold.
The Company's liabilities are primarily to its former
Parent in the form of an unsecured note ($255,000), interest
on the note and other payables. The Company is currently
negotiating the settlement of its outstanding debt to its
former Parent.
In addition to the uncertainty discussed above, the Company
has sustained substantial net losses and has a deficit net
worth at June 30, 1996, of $(174,070). These issues raise
considerable doubt as to the Company's ability to continue
operations. Management has not adopted a plan of liquidation.
The consolidated financial statements do not include any
adjustments that may result from any of the above events.
<PAGE>
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.
SUNSTYLE CORPORATION
(Registrant)
Date: October 13, 1997 By:/s/Ralph W. Quartetti
Ralph W. Quartetti, President
Chief Executive Officer and
Chief Financial Officer<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(B) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 195,603
<SECURITIES> 0
<RECEIVABLES> 7,633
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 203,236
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> (174,070)
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 203,236
<SALES> 0
<TOTAL-REVENUES> 4,517
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,561
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,353
<INCOME-PRETAX> (14,397)
<INCOME-TAX> 0
<INCOME-CONTINUING> (14,397)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (14,397)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
<FN>
<F1>REGISTRANT HAS AN UNCLASSIFIED BALANCE SHEET.
</FN>
</TABLE>
