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 March 31, 1999
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 (727) 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
March 31, 1999
Common Stock, $.10 par value 1,096,014
Name of Each Exchange on Which Registered:
None
PART I - Financial Information
Item 1. Financial Statements
SUNSTYLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 1999 December 31, 1998
---------------- -----------------
(Unaudited) (Unaudited)
ASSETS
Cash $ 207,277 $ 208,477
---------- ----------
Total Assets $ 207,277 $ 208,477
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes Payable to Former Parent $ 255,000 $ 255,000
Interest Payable to Former Parent 93,452 93,452
Accounts Payable and Accrued Expenses 4,000 4,000
----------- ----------
Total Liabilities $ 352,452 $ 352,452
----------- ----------
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 (1,595,997) (1,594,797)
----------- -----------
Total Stockholders' Deficit $ (145,175) $ (143,975)
----------- -----------
Total Liabilities and
Stockholders' Deficit $ 207,277 $ 208,477
=========== ===========
The accompanying notes are an integral part of
these consolidated financial statements.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31,
1999 1998
---------- -----------
Revenues:
Interest Income $ 1,936 $ 2,264
---------- -----------
1,936 2,264
---------- -----------
Costs and Expenses:
General and Administrative 3,136 2,166
---------- -----------
3,136 2,166
---------- -----------
Net Income (Loss) $ (1,200) $ 98
========== ==========
Net Loss Per share $ (.001) $ .001
========== ==========
The accompanying notes are an integral part of
these consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31,
1999 1998
----------- -----------
Cash Flows from Operating Activities:
Net Income $ (1,200) $ 98
----------- -----------
Adjustments to Reconcile Net Income
to Net Cash Provided by
Operating Activities:
Change in Operating Assets and Liabilities:
(Decrease) in Audit Payable 0 0
----------- -----------
Total Adjustments 0 0
----------- -----------
Net Cash Provided by (Used in) Operating
Activities (1,200) 98
----------- -----------
Net Increase (Decrease) in Cash (1,200) 98
Cash at Beginning of Period 208,477 207,423
----------- -----------
Cash at End of Period $ 207,277 $ 207,521
=========== ===========
The accompanying notes are an integral part of
these consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
March 31, 1999
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, 1998. 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 1998 financial statements have been
reclassified for comparative purposes to conform with the financial
statement presentation used in the 1999 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 $2,885,000 in tax loss carry
forwards available as of December 31, 1998. 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
March 31, 1999, of $(145,175). 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.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
March 31, 1999
Results of Operations
For the Three Months Ended March 31, 1999 and 1998:
Interest income decreased from $2,264 for the three months ended
March 31, 1998, to $1,936 for the three months ended March 31,
1999. General and administrative expenses increased from $2,166 for
the three months ended March 31, 1998, to $3,136 for the three
months ended March 31, 1999. As a result of the above, the Company
had a net loss of $1,200 in 1999 compared to a net income of $98 in
1998.
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
March 31, 1999, of $(145,175). 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.
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: August 1, 2000 By:/s/Ralph W. Quartetti
Ralph W. Quartetti, President
Chief Executive Officer and
Chief Financial Officer
