SECURITIES & EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 2001
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.)
4900 Creekside Drive, Clearwater, Florida 33760
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area (727) 592-0299
Securities registered pursuant to Section 12(b) of the Act:
SUNSTYLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2001 2000
----------- -----------
(Unaudited) (Audited)
ASSETS
Cash $ 210,080 $ 213,172
------------ -----------
$ 210,080 $ 213,172
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Note Payable to Former Parent $ 255,000 $ 255,000
Interest Payable to Former Parent 93,452 93,452
Accounts Payable and Accrued Expenses 1,270 3,270
------------ ------------
349,722 351,722
------------ ------------
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 (1,590,464) (1,589,372)
---------- ----------
(139,642) (138,550)
----------- -----------
$ 210,080 $ 213,172
========== ===========
The accompanying notes are an integral part of
these financial statements.
SUNSTYLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31,
2001 2000
--------- --------
Revenues:
Interest Income $ 2,552 $ 2,631
--------- ---------
Total Revenues 2,552 2,631
--------- ---------
Cost and Expense:
General and Administrative 3,644 564
--------- ---------
Total Expenses 3,644 564
--------- ---------
Net Income (Loss) $ (1,092) $ 2,067
========= =========
Net Income (Loss) Per Share $ (.001) $ .002
========= =========
Number of Common Shares
Outstanding 1,096,014 1,096,014
========== ===========
The accompanying notes are an integral part of
these financial statements.
SUNSTYLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31,
2001 2000
------- -------
Cash Flow from Operating Activities:
Net Income (Loss)
$ (1,092) $ 2,067
Adjustments to Reconcile Net Income --------- ---------
(Loss) to Net Cash Provided by
(Used In) Operating Activities:
Increase (Decrease) in Operating
Liabilities:
Accounts Payable and Accrued
Expenses
(2,000) 0
-------- ---------
Total Adjustments (2,000) 0
-------- ---------
Net Cash Provided by (Used in)
Operating Activities (3,092) 2,067
-------- ---------
Net Increase (Decrease) in Cash (3,092) 2,067
Cash at Beginning of Period 213,172 207,696
-------- ---------
Cash at End of Period $ 210,080 $ 209,763
========== ==========
The accompanying notes are an integral part of
these financial statements.
SUNSTYLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2001
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, 2000. 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 2000 financial statements have been reclassified for comparative purposes to conform with the financial statement presentation used in the 2001 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 $2,879,000 in tax loss carry forwards available as of December 31, 2000. Therefore, no provision has been made in these statements for any deferred tax benefit.
NOTE 2 - CONTINGENCIES AND OTHER EVENTS:
The Company is currently negotiating the settlement of its outstanding debt to its former Parent. Although it is possible 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, 2001 of $139,642. 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 majority 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
March 31, 2001
Results of Operations
For the Three Months Ended March 31, 2001 and 2000:
Interest income decreased from $2,631 for the three months ended March 31, 2000, to $2,552 for the three months ended March 31, 2001. General and administrative expenses increased from $564 for the three months ended March 31, 2000, to $3,644 for the three months ended March 31, 2001. As a result of the above, the Company had a net loss of $1,092 in 2001 compared to a net income of $2,067 in 2000.
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, 2001, of $139,642. 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: September 25, 2002 By:/s/Ralph W. Quartetti
Ralph W. Quartetti, President
Chief Executive Officer and
Chief Financial Officer