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, 1995
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, 1995
Common Stock, $.10 par value 1,096,014
Name of Each Exchange on Which Registered:
None
SUNSTYLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
1995 1994
(Unaudited) (Audited)
ASSETS
Cash $ 97,667 $
101,296
Notes Receivable 7,862 8,036
Property and Equipment, Net 65,649 68,959
Total Assets $ 171,178 $ 178,291
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes Payable to Former Parent $ 255,000 $ 255,000
Interest Payable to Former Parent 78,840 66,302
Accounts Payable and Accrued Expenses 26,664 26,664
Total Liabilities 360,504 347,966
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 (1,640,148) (1,620,497)
Total Stockholders' Deficit (189,326) (169,675)
Total Liabilities and
Stockholders' Deficit $ 171,178 $ 178,291
The accompanying notes are an integral part of
these consolidated financial statements.
SUNSTYLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE SIX MONTHS ENDED JUNE 30,
1995 1994
Revenues:
Interest Income $ 3,308 $ 526
3,308 526
Costs and Expenses:
Audit Expense 1,400 1,400
General and Administrative 9,021 5,862
Interest 12,538 9,220
22,959 16,482
Net Income (Loss) $ (19,651) $ (15,956)
Net Income (Loss) Per Share $ (.02) $ (.01)
The accompanying notes are an integral part of
these consolidated financial statements.
SUNSTYLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30,
1995 1994
Revenues:
Interest Income $ 1,204 $ 18
1,204 18
Costs and Expenses:
Audit Expense 1,400 1,400
General and Administrative 2,859 1,923
Interest 6,359 4,594
10,618 7,917
Net Income (Loss) $ (9,414) $ (7,899)
Net Income (Loss) Per Share $ (.01) $ (.01)
The accompanying notes are an integral part of
these consolidated financial statements.
SUNSTYLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE SIX MONTHS ENDED JUNE 30,
1995 1994
Cash Flows from Operating Activities:
Net Income (Loss) $ (19,651) $ (15,956)
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided by
Operating Activities:
Depreciation 3,310 3,310
(Increase) Decrease in Operating Assets:
Notes Receivable 174 1,280
Increase (Decrease) in Operating
Liabilities:
Interest Payable to
Former Parent 12,538 8,926
Total Adjustments 16,022 13,516
Net Cash Provided by (Used In) Operating
Activities (3,629) (2,440)
Cash Flows from Financing Activities:
Principal Reduction on Notes Payable
to Banks 0
(1,661)
Net Cash Used in Financing Activities 0 (1,661)
Net Increase (Decrease) in Cash (3,629) (4,101)
Cash at Beginning of Period 101,296 118,949
Cash at End of Period $ 97,667 $ 114,848
Supplemental Disclosures of Cash Flow
Information:
Cash Paid During the Three Months for
Interest $ 0 $ 131
The accompanying notes are an integral part of
these consolidated financial statements.
SUNSTYLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 1995
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, 1994. 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 1994 financial statements have been reclassified
for comparative purposes to conform with the financial statement
presentation used in the 1995 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 $2,910,500 in tax loss carry forwards available as of
December 31, 1994. 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,
1995, of $189,326. These issues raise considerable doubt as to the
Company's ability to continue operations. Management has not adopted a
plan of liquidation and is exploring several possibilities, including
selling a major interest in the Company. The consolidated financial
statements do not include any adjustments that may result from any of the
above events.
SUNSTYLE CORPORATION AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
June 30, 1995
Results of Operations
For the Three Months Ended June 30, 1995 and 1994:
In 1995, the Company had interest income of $1,204 compared to $18 in
1994. General and administrative expenses were $2,859 in 1995 compared to
$1,923 in 1994 and interest expense was $6,359 in 1995 compared to $4,594
in 1994. As a result of the above, the Company had a net loss in 1995 of
$9,414 compared to a net loss in 1994 of $7,899.
For the Six Months Ended June 30, 1995 and 1994:
In 1995, the Company had interest income of $3,308 compared to $526 in
1994. General and administrative expenses were $9,021 in 1995 compared to
$5,862 in 1994 and interest expense was $12,538 in 1995 compared to $9,220
in 1994. As a result of the above, the Company had a net loss in 1995 of
$19,651 compared to a net loss in 1994 of $15,956.
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 only remaining
physical asset is its office building and storage lockers.
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. 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,
1995, of $189,326. These issues raise considerable doubt as to the
Company's ability to continue operations. Management has not adopted a
plan of liquidation and is currently exploring several possibilities,
including selling a major interest in the Company. The consolidated
financial statements do not include any adjustments that may result from
any of the above events.
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: By: /s/Ralph W. Quartetti
Ralph W. Quartetti, President
Chief Executive Officer and
Chief Financial Officer
<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, 1995.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 97,667
<SECURITIES> 0
<RECEIVABLES> 7,862
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 132,419
<DEPRECIATION> 66,770
<TOTAL-ASSETS> 171,178
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> (189,326)
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 171,178
<SALES> 0
<TOTAL-REVENUES> 3,308
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 10,421
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,538
<INCOME-PRETAX> (19,651)
<INCOME-TAX> 0
<INCOME-CONTINUING> (19,651)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (19,651)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
<FN>
<F1>REGISTRANT HAS AN UNCLASSIFIED BALANCE SHEET.
</FN>
</TABLE>
