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, 1997
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 19 N., 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, 1997
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, December 31,
1997 1996
----------- -----------
(Unaudited) (Unaudited)
ASSETS
Cash $ 204,287 $ 205,019
---------- ----------
Total Assets $ 204,287 $ 205,019
========== ==========
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 16,500 17,500
----------- ----------
Total Liabilities $ 364,952 $ 365,952
----------- ----------
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 (1,611,487) (1,611,755)
----------- -----------
Total Stockholders' Deficit $ (160,665) $ (160,933)
----------- -----------
Total Liabilities and
Stockholders' Deficit $ 204,287 $ 205,019
=========== ===========
The accompanying notes are an integral part of
these consolidated financial statements.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31,
1997 1996
---------- -----------
Revenues:
Interest Income $ 2,330 $ 2,266
---------- -----------
2,330 2,266
---------- -----------
Costs and Expenses:
General and Administrative 2,062 1,730
Interest 0 5,472
---------- -----------
2,062 7,202
---------- -----------
Net Income (Loss) $ 268 $ (4,936)
========== ===========
Net Income (Loss) Per share $ .001 $ (.01)
========== ===========
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,
1997 1996
----------- -----------
Cash Flows from Operating
Activities:
Net Income (Loss) $ 268 $ (4,936)
----------- -----------
Adjustments to Reconcile
Net Income (Loss) to Net
Cash Provided By Operating
Activities:
Change in Operating Assets
and Liabilities:
Notes Receivable 0 47
Interest Payable to
Former Parent 0 5,472
(Decrease) in Audit Payable (1,000) 0
----------- -----------
Total Adjustments (1,000) 5,519
----------- -----------
Net Cash Provided by (Used in)
Operating Activities (732) 583
----------- -----------
Net Increase (Decrease) in Cash (732) 583
Cash at Beginning of Period 205,019 198,600
---------- -----------
Cash at End of Period $ 204,287 $ 199,183
=========== ===========
The accompanying notes are an integral part of
these consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
March 31, 1997
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,
1996. 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 1996 financial statements have been reclassified
for comparative purposes to conform with the financial statement
presentation used in the 1997 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 $2,902,000 in tax loss carry forwards
available as of December 31, 1996. 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, 1997, of $160,665. 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, 1997
Results of Operations
For the Three Months Ended March 31, 1997 and 1996:
Interest income increased from $2,266 for the three months ended
March 31, 1996, to $2,330 for the three months ended March 31, 1997.
Interest expense decreased from $5,472 for the three months ended March
31, 1996, to $ 0 for the three months ended March 31, 1997. General
and administrative expenses increased from $1,730 for the three months
ended March 31, 1996, to $2,062 for the three months ended March 31,
1997. As a result of the above, the Company had a net loss of $5,614
in 1997 compared to a net income of $268 in 1996.
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, 1997, of $160,665. 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: July 26, 2000 By:/s/Ralph W. Quartetti
Ralph W. Quartetti, President
Chief Executive Officer and
Chief Financial Officer
