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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [Fee Required]
For the fiscal year ended December 31, 1997
------------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [No Fee Required]
For the transition period from __________ to __________
Commission file number 33-79320
--------------------------------
SUNNYLAND HOLDINGS CORPORATION
- -------------------------------------------------------------------------------
(Name of small business issuer in its charter)
Delaware 54-1706550
- ---------------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6231 Leesburg Pike, Suite 308 Falls Church, Virginia 22044
- ---------------------------------------- ------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (703) 237-8230-
------ -----------------------
Securities registered under Section 12(b) of the Exchange Act:
Title of each class Name of each exchange on which
registered
Common
- ---------------------------------------- ------------------------------------
- ---------------------------------------- ------------------------------------
Securities registered under Section 12(g) of the Exchange Act:
- -------------------------------------------------------------------------------
(Title of class)
- -------------------------------------------------------------------------------
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for 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 [ ]
SEC 2337 (02-94)
<PAGE>
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year. -0-
-----------
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days. (See definition of affiliate in Rule 12b-2 of the Exchange Act).
Note: If determining whether a person is an affiliate will involve an
unreasonable effort and expense, the issuer may calculate the aggregate market
value of the common equity held by non-affiliates on the basis of reasonable
assumptions, if the assumptions are stated.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ]
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
2,195,000
- -----------------
DOCUMENTS INCORPORATED BY REFERENCE
If the following documents are incorporated by reference, briefly describe
them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"). The listed
documents should be clearly described for identification purposes (e.g., annual
report to security holders for fiscal year ended December 24, 1990).
Transitional Small Business Disclosure Format (Check one): Yes ; No
---- ----
GENERAL INSTRUCTIONS
A. Use of Form 10-KSB.
This Form may be used by a "small business issuer," defined in Rule 12b-2
of the Exchange Act, for its annual and transitional reports under section 13 or
15(d) of that Act. For further information as to eligibility to use this Form
see Item 10(a) of Regulation S-B (17 CFR 228.10 et seq.). Annual reports on this
form shall be filed within 90 days after the end of the fiscal year covered by
the report. Transition reports shall be filed within the time period specified
in Rules 13a-10 or 15d-10 of the Exchange Act (ss 240.13a-10 or 240.15d-10
of this chapter).
B. Application of General Rules and Regulations.
The General Rules and Regulations under the Exchange Act (ss 240.0-1
et seq.), particularly Regulation 12B (ss 240.12b-1 et seq.) contain
certain general requirements for reports on any form which should be carefully
read and observed in the preparation and filing of reports on this Form.
C. Signature and Filing of Report.
1. File three "complete" copies and five "additional" copies of the
registration statement with the Commission and file at least one complete
copy with each exchange on which the securities will be registered. A
"complete" copy includes financial statements, exhibits and all other
papers and documents. An "additional" copy excludes exhibits. One of the
copies filed with the Commission and each exchange should be manually
signed; all other copies should have typed or printed signatures.
2
<PAGE>
ITEM 1. Description of Business
The Company was incorporated in the State of Delaware on November 5,
1993. Since inception, the principal activity of the Company has been directed
to organizational efforts and obtaining initial financing, as of the date
hereof, the Company has not entered into any other business activity. Company
startup costs have been provided by financing from the president and vice
president of the company, as disclosed in the financial statements herewith. No
other initial financing has been obtained.
The company was organized to engage in the acquisition, construction
and/ or operation of income properties, and any and all business activities
incidental thereto ("Income properties"). Initially, the Company expects to seek
out income properties in Seoul and Cheju Island, South Korea. As of the date
hereof, the Company has not acquired or entered into any definitive contracts to
acquire any income properties. The Company expects to consider other areas in
the Pacific Rim for development at such time as, in the opinion of Management,
there are opportunities for the Company's involvement. There are no immediate
plans for evaluation of sites in the pacific rim. In addition, the Company
intends to seek out income properties in the United States. The Company
recognizes that, as a result of its limited financial, managerial and other
resources, the number of available, suitable income properties from which to
choose may be limited.
In general, Management intends to finance income properties through
debt obligation such as mortgages at competitive market rates, debentures,
and/or investors' equity. Management contacted various sources for possible
financing and will continue to meet with potential private investors or lenders.
The Company has not set a time frame within which its financing goals must be
met, other than seeking to make the arrangement for financing at the earliest
possible time. If such financing is arranged, repayment of debt and debenture
obligations will be made from earnings from operation of income properties,
stock offerings, and/or equity interest in the Company.
The Company will minimize its cash requirements by deferring salaries
to its officers until and if acquisition of one or more income properties is
accomplished. Incidental expenses of operation prior to acquisition of income
properties will be provided by loans to the company or purchases of stock from
the company by one or more of its current shareholders. The Company expects said
current shareholders to provide such assistance until an acquisition is
accomplished or until the Company changes its plan of operation or terminates
its activities. There is no binding agreement pursuant to which the current
shareholders must continue to make such loans.
If income properties are not available at the time the Company is
prepared to make an acquisition or if on further investigation such projects are
not suitable, the Company will continue to seek investment projects. As of the
date hereof, the Company has not entered into any binding agreements or
contracts, written or otherwise, for such financing; nor has management selected
any form of financing or entered into any contracts of arrangement thereof.
<PAGE>
The Company does not plan to do any product research or development in
the next twelve months or thereafter, nor does the Company expect any
significant changes in the number of employees. The Company does not presently
have any expectation of purchasing any plant or significant equipment.
The Company's principal business objective is to seek long term growth
potential in income properties in which it participates rather than immediate
short-term earnings. There can be no assurance that any of Management's
objectives or intentions will be met.
ITEM 2. Description of property
The Company does not own property. It leases office space from S.D.
Sunnyland Enterprises, Inc., (its parent company) and is physically located in
the same offices.
ITEM 3. Legal Proceeding
There are no legal proceedings affecting the company to date.
PART II
ITEM 6. Management Discussion and Analysis
During the next year the Board of Directors will concentrate on
acquiring commercial properties in the United States; particularly in Northern
Virginia. Such acquisition will depend on the Company's ability to raise capital
in the future.
Mr. Kyung Hoon Pyun of Seoul, Korea was reappointed to the Board of
Directors effective July 16, 1997.
In accordance with the Exchange Act, this report has been signed by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
/s/ Syung D. Han
By_______________________________
Syung D. Han, President, CEO
March 30, 1998
Date______________________________
/s/ Albert L. Stewart
By_______________________________
Albert L. Stewart, Vice President
Secretary
March 30, 1998
Date______________________________
<PAGE>
SUNNYLAND HOLDINGS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
DECEMBER 31, 1997, 1996 AND 1995 AND THE PERIOD
FROM NOVEMBER 5, 1993 (INCEPTION)
TO DECEMBER 31, 1997
These financial statements
may be reproduced only
in their entirety.
<PAGE>
SUNNYLAND HOLDINGS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 AND THE
PERIOD FROM NOVEMBER 5, 1993 (INCEPTION) TO DECEMBER 31, 1997
TABLE OF CONTENTS
================================================================================
INDEPENDENT AUDITOR'S REPORT 2
EXHIBIT A Balance Sheets
December 31, 1997 and 1996 3
EXHIBIT B Statements of Changes in Stockholders' Deficit
For the Years Ended December 31, 1997, 1996 and 1995 and
For the Period From November 5, 1993 (Inception)
to December 31, 1997 4
EXHIBIT C Statements of Operations
For the Years Ended December 31, 1997, 1996 and 1995 and
For the Period From November 5, 1993 (Inception)
to December 31, 1997 5
EXHIBIT D Statements of Cash Flows
For the Years Ended December 31, 1997, 1996 and 1995 and
For the Period From November 5, 1993 (Inception)
to December 31, 1997 6
NOTES TO FINANCIAL STATEMENTS 7-10
<PAGE>
[ROSS, LANGAN & McKENDREE, L.L.P. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
----------------------------
Board of Directors and Stockholders
Sunnyland Holdings Corporation
Falls Church, Virginia
We have audited the accompanying balance sheets of the Sunnyland Holdings
Corporation (a development stage company) as of December 31, 1997 and 1996 and
the related statements of changes in stockholders' deficit, operations and cash
flows for the years ended December 31, 1997, 1996 and 1995, and for the period
from November 5, 1993 (inception) to December 31, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Sunnyland Holdings
Corporation as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years ended December 31, 1997, 1996 and 1995, and
from November 5, 1993 (inception), to December 31, 1997, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 4 to the financial
statements, the Company has not commenced operations or obtained any outside
financing or capital. These conditions raise substantial doubt about its ability
to continue as a going concern. Management's plans regarding those matters also
are described in Note 4. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ Ross, Langan & McKendree L.L.P.
______________________________________
CERTIFIED PUBLIC ACCOUNTANTS
McLean, Virginia
March 11, 1998
Home page: http://www.rimcpa.com E-mail: [email protected] Page 2 of 10 Pages
<PAGE>
EXHIBIT A
SUNNYLAND HOLDINGS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
ASSETS
December 31,
-------------------
1997 1996
-------- ---------
CURRENT ASSETS
Cash and cash equivalents (Note 1) $ 1,085 $ 112
-------------------
TOTAL ASSETS $ 1,085 $ 112
===================
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accrued expenses (Note 4) $ - $ 25,000
Current portion of related party
notes payable (Note 2) - 39,077
-------------------
TOTAL CURRENT LIABILITIES - 64,077
LONG TERM LIABILITIES
Related party notes payable - net
of current portion (Note 2) 81,967 27,526
-------------------
TOTAL LIABILITIES 81,967 91,603
- - - - - - - - - -
COMMITMENTS AND CONTINGENCIES (Note 4) - -
STOCKHOLDERS' DEFICIT (Exhibit B)
Common stock; $.00001 par value;
100,000,000 shares authorized; 2,195,000
issued and outstanding as of December 31, 1997
and 1996 22 22
Additional paid-in-capital 294,530 224,753
Deficit accumulated during development stage (375,434) (316,266)
--------------------
TOTAL STOCKHOLDERS' DEFICIT (80,882) (91,491)
-------------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 1,085 $ 112
===================
See independent auditor's report. The accompanying notes are an integral part of
these financial statements.
Page 3 of 10 Pages
<PAGE>
EXHIBIT B
SUNNYLAND HOLDINGS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 AND
FOR THE PERIOD FROM NOVEMBER 5, 1993 (INCEPTION) TO DECEMBER 31, 1997
<TABLE>
<CAPTION>
Common Stock Additional Deficit Total
---------------------- Paid-in Accumulated During Stockholders'
Shares Amount Capital Development Stage Deficit
-------- -------- ---------- ------------------ -------------
<S><C>
BALANCE AT NOVEMBER 5, 1993 - $ - $ - $ - $ -
Original common stock issue
($.00001 per share, February 5, 1994)
(Note 3) 3,120,000 31 - - 31
Contributed services and
facilities (Note 5) - - 85,230 - 85,230
Net loss (Exhibit C) - - - (149,162) (149,162)
-------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1994 3,120,000 31 85,230 (149,162) (63,901)
Contributed services and
facilities (Note 5) - - 69,737 - 69,737
Net loss (Exhibit C) - - - (84,654) (84,654)
------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1995 3,120,000 31 154,967 (233,816) (78,818)
Cancellation of common stock (Note 3) (1,000,000) (10) 10 - -
Contributed services and
facilities (Note 5) - - 69,777 - 69,777
Common stock issue (Note 3) 75,000 1 (1) - -
Net loss (Exhibit C) - - - (82,450) (82,450)
------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1996 2,195,000 22 224,753 (316,266) (91,491)
Contributed services and
facilities (Note 5) - - 69,777 - 69,777
Net loss (Exhibit C) - - - (59,168) (59,168)
------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1996 2,195,000 $ 22 $294,530 ($375,434) ($80,882)
==============================================================================
</TABLE>
See independent auditor's report. The accompanying notes are an integral part
of these financial statements.
Page 4 of 10 Pages
<PAGE>
EXHIBIT C
SUNNYLAND HOLDINGS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 AND FOR THE
PERIOD FROM NOVEMBER 5, 1993 (INCEPTION) TO DECEMBER 31, 1997
<TABLE>
<CAPTION>
Years Ended December 31, November 5, 1993
------------------------------- (Inception) to
1997 1996 1995 December 31, 1997
-------- -------- -------- -----------------
<S><C>
REVENUE $ - $ - $ - $ -
- - - - - - - - - - - - - - - - - - - - - -
EXPENSES
Salaries - related parties 65,000 65,000 65,000 270,830
Payroll taxes - related parties 4,777 4,777 4,737 20,091
Rent and telephone - related parties (Note 4) 8,400 8,400 7,500 32,700
Professional fees 3,492 3,150 3,371 62,641
Office expense 56 233 1,007 2,049
Travel 2,262 - 2,762 9,065
Fees and licenses - 768 - 1,458
Printing - - 69 901
Bank charges 132 122 108 513
Miscellaneous 49 - 100 186
------------------------------- -----------
Total expenses 84,168 82,450 84,654 400,434
------------------------------- -----------
NET LOSS FROM OPERATIONS (84,168) (82,450) (84,654) (400,434)
OTHER INCOME 25,000 - - 25,000
------------------------------- -----------
NET LOSS ($59,168) ($82,540) ($84,654) ($375,434)
=============================== ===========
NET LOSS PER SHARE ($ 0.02) ($0.03) ($0.03) ($0.13)
=============================== ===========
WEIGHTED AVERAGE NUMBER OF SHARES 2,361,660 2,541,875 3,120,000 2,799,250
================================ ===========
</TABLE>
See independent auditor's report. The accompanying notes are an integral part of
these financial statements.
Page 5 of 10 Pages
<PAGE>
EXHIBIT D
SUNNYLAND HOLDINGS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 AND FOR THE
PERIOD FROM NOVEMBER 5, 1993 (INCEPTION) TO DECEMBER 31, 1997
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
Years Ended December 31, November 5, 1993
------------------------------------ (Inception) to
1997 1996 1995 December 31, 1997
-------- -------- -------- -----------------
<S><C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss (Exhibit C) ($59,168) ($82,450) ($84,654) ($375,434)
Adjustments to reconcile net loss to net
cash used by operating activities:
Contributed services and facilities -
related parties 69,777 69,777 69,737 294,552
Decrease in accrued expenses (25,000) - - -
---------------------------------- ---------
Net cash used by operating activities (14,391) (12,673) (14,917) (80,882)
---------------------------------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from related party notes payable 15,364 12,354 15,025 81,967
---------------------------------- ---------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 973 (319) 108 1,085
CASH AND CASH EQUIVALENTS -
BEGINNING OF THE YEAR 112 431 323 -
---------------------------------- ---------
CASH AND CASH EQUIVALENTS -
END OF THE YEAR $ 1,085 $ 112 $ 431 $ 1,085
================================== =========
</TABLE>
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
The Company issued 3,120,000 shares of common stock at inception, and
received contributed capital in exchange for services rendered and office
facilities from various related parties. The value of the common stock and
contributed capital totals $224,775.
During 1996, the Company acquired and cancelled, at no cost, 1,000,000
shares of previously issued common stock in exchange for 75,000 shares of
common stock.
During 1997, the Company consolidated related party notes payable having an
aggregate balance of $66,603 and issued new notes payable (Note 2).
See independent auditor's report. The accompanying notes are an integral part of
these financial statements.
Page 6 of 10 Pages
<PAGE>
SUNNYLAND HOLDINGS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - THE COMPANY AND ITS SIGNIFICANT ACCOUNTING POLICIES
Development Stage Operations
Sunnyland Holdings Corporation (the Company) was incorporated on November 5,
1993 for the purpose of acquiring, constructing and operating hotels and
parking facilities in South Korea and its Cheju Island territory. The
Company is currently in the development stage of operations. Efforts are
currently concentrated in the areas of marketing and raising equity capital.
The Company has registered with the Securities and Exchange Commission.
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments purchased with an
original maturity of three months or less to be cash equivalents.
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 2 - RELATED PARTY NOTES PAYABLE
At January 1, 1997, the related party notes payable consisted of multiple
notes and the balances were as follows:
Company's President and Board Member $ 43,673
Company's Vice President and Board Member 1,936
S.D. Sunnyland Enterprise, Inc. 20,994
--------
Total $ 66,603
========
During 1997, the notes were consolidated and new notes were executed for
the above balances. The terms of these notes and additional borrowings
during the year are summarized below.
Company's President and Board Member
Note payable executed on April 2, 1997 in the
amount of $43,673; non-interest bearing; due
in full on May 2, 2000 $43,673
Notes payable executed on various dates in 1997
non-interest bearing; due in full on various dates
in 2000 and 2001 6,362
-------
$50,035
See independent auditor's report. The accompanying notes are an integral part of
these financial statements.
Page 7 of 10 Pages
<PAGE>
SUNNYLAND HOLDINGS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - RELATED PARTY NOTES PAYABLE (Continued)
Company's Vice-President and Board Member
Note payable executed on April 2, 1997 in the
amount of $1,936; non-interest bearing; due in
full on May 2, 2000. $ 1,936
Notes payable executed on various dates in 1997;
non-interest bearing; due on various dates in 2000
and 2001. 602
-------
$ 2,538
S.D. Sunnyland Enterprises, Inc. (shareholder)
Note payable executed on April 2, 1997 in the
amount of $20,994; non-interest bearing; due
in full on April 3, 2000. 20,994
Notes payable executed on various dates in 1997;
non-interest bearing; due in full on various dates
in 1998 and 1999 8,400
------
29,394
-------
Total $81,967
=======
Future maturities at December 31, 1997 are as follows:
December 31, Amount
----------- ------
1998 $ -
1999 -
2000 78,974
2001 2,993
------
Total $81,967
=======
All of the related party note obligations are unsecured and contain a
provision by which any principal outstanding after the due date will accrue
interest at the highest rate allowed by law.
See independent auditor's report. The accompanying notes are an integral part of
these financial statements.
Page 8 of 10 Pages
<PAGE>
SUNNYLAND HOLDINGS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - COMMON STOCK - RELATED PARTIES
The Board of Directors authorized the issuance of common stock to the board
members, and to two companies of which board members serve as president, in
exchange for services rendered related to formation of the Company.
During 1996, the Company acquired and cancelled 1,000,000 shares of common
stock from a shareholder, and reissued 75,000 shares of common stock to the
same shareholder. There was no cash exchanged in the transaction.
NOTE 4 - COMMITMENTS AND CONTINGENCIES
Contracts
At December 31, 1996, the Company was contingently liable to its law firm
for $25,000 upon commencement of public trading of the Company's securities.
The law firm is no longer providing services for the Company. The contingent
liability has been recognized as other income for the year ended December
31, 1997.
Leases
For the period from November 5, 1993 to April 30, 1994, the Company shared
rent free office space with S.D. Sunnyland Enterprises, Inc., a majority
shareholder. The fair market value of the rent has been recorded as
contributed capital. Effective May 1, 1994, the Company entered into a lease
agreement with the aforementioned related party. The lease was renewed
effective May 1, 1997, and provides for monthly payments of $600 for office
space, and $100 for telephone and fax service. The lease expires in May
1998. Future minimum lease commitments at December 31, 1997 total $2,800.
Total rent expense consists of the following:
<TABLE>
<CAPTION>
Years Ended December 31, November 5, 1993
------------------------------ (Inception) to
1997 1996 1995 December 31, 1997
------ ------ ------ -----------------
<S><C>
Rent expense $7,200 $7,200 $6,300 $27,700
Telephone and fax services 1,200 1,200 1,200 5,000
------ ------ ------ -------
Total $8,400 $8,400 $7,500 $32,700
====== ====== ====== =======
</TABLE>
Going Concern
The Company's financial statements have been presented on the basis that it
is a going concern. The Company's ability to commence operations is
dependent on developing its business activities and raising the required
capital. The Company intends to raise capital through conventional means
such as debt financing or private placements for use in acquiring its income
properties. The Company is currently seeking such financing and has not
established a deadline for accomplishing the financing. The Company's
operations will continue to be financed through stockholder loans until
planned acquisitions generate revenues.
See independent auditor's report. The accompanying notes are an integral part of
these financial statements.
Page 9 of 10 Pages
<PAGE>
SUNNYLAND HOLDINGS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 5 - CONTRIBUTED SERVICES AND FACILITIES
The services and facilities contributed by the Company's shareholders have
been recorded as an expense and a contribution of capital. The services and
facilities have been recorded at their fair market value.
NOTE 6 - FAIR VALUES OF FINANCIAL INSTRUMENTS
Based on existing rates and economic conditions, the carrying amount of cash
and cash equivalents at December 31, 1997 and 1996 is assumed to approximate
fair market value. The Company's other financial instruments include related
party notes payable for which it is not practicable to estimate fair value.
None of the Company's financial instruments are held for trading purposes.
NOTE 7 - INCOME TAXES
At December 31, 1997 and 1996, the Company had net operating loss
carryforwards of approximately $73,000 and $67,000, respectively. Due to
conditions that raise substantial doubt about the Company's ability to
continue as a going concern, a valuation allowance has been applied to the
entire carryforward amount. No current or deferred tax benefit or provision
has been recorded on the Company's financial statements.
The amounts and expiration dates of the operating loss carryforwards are as
follows:
Expiration Date Amount
----------------- -------
December 31, 2009 $40,000
December 31, 2010 15,000
December 31, 2011 12,000
December 31, 2012 6,000
-------
Total $73,000
=======
See independent auditor's report. The accompanying notes are an integral part of
these financial statements.
Page 10 of 10 Pages
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 1,085
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,085
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,085
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 2,195,000
<OTHER-SE> 294,530
<TOTAL-LIABILITY-AND-EQUITY> 1,085
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 82,450
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (73,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (59,168)
<EPS-PRIMARY> (0.13)
<EPS-DILUTED> (0.04)
</TABLE>
