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 September 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
September 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
September 30, December 31,
1996 1995
------------ ------------
(Unaudited) (Audited)
ASSETS
Cash $ 204,086 $ 198,600
Notes Receivable 0 7,680
---------- ----------
Total Assets $ 204,086 $ 206,280
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes Payable to Former Parent $ 255,000 $ 255,000
Interest Payable to Former Parent 110,686 93,452
Accounts Payable and Accrued Expenses 17,500 17,500
----------- ----------
Total Liabilities 383,186 365,952
----------- ----------
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 (1,629,922) (1,610,494)
----------- -----------
Total Stockholders' Deficit (179,100) (159,672)
----------- -----------
Total Liabilities and
Stockholders' Deficit $ 204,086 $ 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 NINE MONTHS ENDED SEPTEMBER 30,
1996 1995
---------- -----------
Revenues:
Gain on Sale of Fixed Assets $ 0 $ 54,006
Interest Income 6,779 4,984
---------- -----------
6,779 58,990
---------- -----------
Costs and Expenses:
Audit Expense 4,900 1,400
General and Administrative 4,072 14,934
Interest 17,234 18,705
---------- -----------
26,206 35,039
---------- -----------
Net Income (Loss) $ (19,427) $ 23,951
========== ==========
Net Income (Loss) Per share $ (.02) $ .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 SEPTEMBER 30,
1996 1995
---------- -----------
Revenues:
Gain on Sale of Fixed Assets $ 0 $ 54,006
Interest Income 2,262 1,676
---------- -----------
2,262 55,682
---------- -----------
Costs and Expenses:
General and Administrative 1,412 5,913
Interest 5,881 6,167
---------- -----------
7,293 12,080
---------- -----------
Net Income (Loss) $ (5,031) $ 43,602
========== ==========
Net Income (Loss) Per share $ (.01) $ .04
========== ==========
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 NINE MONTHS ENDED SEPTEMBER 30,
1996 1995
----------- -----------
Cash Flows from Operating Activities:
Net Income (Loss) $ (19,427) $ 23,951
----------- -----------
Gain on Sale of Assets 0 (54,006)
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided by
Operating Activities:
Depreciation 0 3,310
Change in Operating Assets and Liabilities:
Notes Receivable 7,680 310
Interest Payable to Former Parent 17,233 18,704
Accounts Payable and
Accrued Expenses 0 (9,164)
----------- -----------
Total Adjustments 24,913 (40,846)
----------- -----------
Net Cash Provided by (Used in) Operating
Activities 5,486 (16,895)
----------- -----------
Cash Flows from Investing Activities:
Proceeds from Sale of Assets 0 119,655
----------- ----------
Net Cash Provided by
Investing Activities 0 119,655
----------- ----------
Net Increase (Decrease) in Cash 5,486 102,760
Cash at Beginning of Period 198,600 101,296
----------- -----------
Cash at End of Period $ 204,086 $ 204,056
=========== ===========
The accompanying notes are an integral part of
these consolidated financial statements.
<PAGE>
SUNSTYLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
September 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 September 30, 1996, of $(179,100). 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
September 30, 1996
Results of Operations
For the Nine Months Ended September 30, 1996 and 1995:
Interest income increased from $4,984 for the nine months
ended September 30, 1995, to $6,779 for the nine months ended
September 30, 1996. Interest expense decreased from $18,705
for the nine months ended September 30, 1995, to $17,234 for
the nine months ended September 30, 1996. General and
administrative expenses decreased from $14,934 for the nine
months ended September 30, 1995, to $4,072 for the nine months
ended September 30, 1996. Audit expense increased from $1,400
for the nine months ended September 30, 1995, to $4,900 for
the nine months ended September 30, 1996. In 1995, the
Company sold its remaining property resulting in a gain of
$54,006. As a result of the above, the Company had a net loss
of $19,427 in 1996 compared to a net income of $23,951 in
1995.
For the Three Months Ended September 30, 1996 and 1995:
Interest income increased from $1,676 for the three months
ended September 30, 1995, to $2,262 for the three months ended
September 30, 1996. Interest expense decreased from $6,167
for the three months ended September 30, 1995, to $5,881 for
the three months ended September 30, 1996. General and
administrative expenses decreased from $5,913 for the three
months ended September 30, 1995, to $1,412 for the three
months ended September 30, 1996. In 1995, the Company sold
its remaining property resulting in a gain of $54,006. As a
result of the above, the Company had a net loss of $5,031 in
1996 compared to a net income of $43,602 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 September 30, 1996, of $(179,100). 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 FIFNANCIAL 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 SEPTEMBER 30, 1996.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 204,086
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 204,086
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> (179,100)
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 204,086
<SALES> 0
<TOTAL-REVENUES> 6,779
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 8,972
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,234
<INCOME-PRETAX> (19,427)
<INCOME-TAX> 0
<INCOME-CONTINUING> (19,427)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (19,427)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
<FN>
<F1>REGISTRANT HAS AN UNCLASSIFIED BALANCE SHEET.
</FN>
</TABLE>
