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 June 30, 2002
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:
Name of each exchange
Title of each class on which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock (par value $.10)
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
Number of Common shares outstanding (June 30, 2002): 1,096,014
SUNSTYLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30,
December 31,
2002
2001
----------- -----------
(Unaudited) (Audited)
ASSETS
Cash $ 211,725 $ 210,777
------------ -----------
$ 211,725 $ 210,777
============ ===========
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 8,635 3,471
----------- -----------
357,087 351,923
----------- -----------
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 (1,596,184) (1,591,968)
---------- ----------
(145,362) (141,146)
----------- -----------
$ 211,725 $ 210,777
========== ===========
The accompanying notes are an integral part of
these financial statements.
SUNSTYLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE SIX MONTHS ENDED June 30,
2002 2001
--------- --------
Revenues:
Interest Income $ 1,248 $ 4,542
--------- ---------
Total Revenues 1,248 4,542
--------- ---------
Cost and Expense:
General and Administrative 5,464 3,944
--------- ---------
Total Expenses 5,464 3,944
--------- ---------
Net Income (Loss) $ (4,216) $ 598
========== =========
Net Income (Loss)Per Share $ (.004) $ .001
========== ==========
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 OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED June 30,
2002 2001
--------- --------
Revenues:
Interest Income $ 594 $ 1,990
--------- ---------
Total Revenues 594 1,990
--------- ---------
Cost and Expense:
General and Administrative 1,832 300
--------- ---------
Total Expenses 1,832 300
--------- ---------
Net Income (Loss) $ (1,238) $ 1,690
========= =========
Net Income (Loss) Per Share $ (.001) $ .001
========= =========
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 SIX MONTHS ENDED June 30,
2002 2001
------- ------
Cash Flow from Operating Activities:
Net Income (Loss)
$ (4,216) $ 598
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 5,164 (2,000)
------- --------
Total Adjustments 5,164 (2,000)
------- --------
Net Cash Provided by (Used in)
Operating Activities 948 (1,402)
------- --------
Net Increase (Decrease) in Cash 948 (1,402)
Cash at Beginning of Period 210,777 213,172
-------- --------
Cash at End of Period $ 211,725 $ 211,770
========= =========
The accompanying notes are an integral part of
these financial statements.
SUNSTYLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2002
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, 2001. 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 2001 financial statements have been reclassified for comparative purposes to conform with the financial statement presentation used in the 2002 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 $2,882,000 in tax loss carry forwards available as of December 31, 2001. Therefore, no provision has been made in these statements for any deferred tax benefit.
SUNSTYLE CORPORATION AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
June 30, 2002
Results of Operations
For the Six Months Ended June 30, 2002 and 2001:
Interest income decreased from $4,542 for the six months ended June 30, 2001, to $1,248 for the six months ended June 30, 2002. General and administrative expenses increased from $3,944 for the six months ended June 30, 2001, to $5,464 for the six months ended June 30, 2002. As a result of the above, the Company had a net loss of $4,216 in 2002 compared to net income of $598 in 2001.
For the Three Months Ended June 30, 2002 and 2001:
Interest income decreased from $1,990 for the three months ended June 30, 2001, to $594 for the three months ended June 30, 2002. General and administrative expenses increased from $300 for the three months ended June 30, 2001, to $1,832 for the three months ended June 30, 2002. As a result of the above, the Company had a net loss of $1,238 in 2002 compared to net income of $1,690 in 2001.
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 June 30, 2002, of $145,362. 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