UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED
March 31, 2010
OR
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION FROM _______ TO ________.
COMMISSION FILE NUMBER: 000-52224
SUNNYSIDE ACRES MOBILE ESTATES
(Exact Name of Issuer as Specified in its Charter)
| NEVADA | 88-0409166 |
| (State or other jurisdiction of | (I.R.S. Employer |
| incorporation or organization) | Identification No.) |
| | |
| P.O. Box 031-088, Shennan Zhong Road, | |
| Shenzhen City, P.R. China 518031 | n/a |
| (Address of principal executive offices) | (Zip code) |
Issuer's telephone number: 011-86-21-61050200
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 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 |_|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes |X| No |_|
State the number of shares outstanding of each of the issuer's classes of common equity, for the period covered by this report and as at the latest practicable date:
At April 30, 2010, there were outstanding 8,000,000 shares of the Registrant's Common Stock, $.001 par value.
Transitional Small Business Disclosure Format: Yes |_| No |X|
PART I
ITEM 1. FINANCIAL STATEMENTS
SUNNYSIDE ACRES MOBILE ESTATES
(A Development Stage Enterprise)
CONTENTS
| | |
| FINANCIAL STATEMENTS | |
| | |
| Balance Sheets | F-1 |
| | |
| Statements of Operations | F-2 |
| | |
| Statements of Stockholders' Deficit | F-3 |
| | |
| Statements of Cash Flows | F-4 |
| | |
| Notes to Financial Statements | F-5 |
SUNNYSIDE ACRES MOBILE ESTATES
(A Development Stage Enterprise)
CONDENSED BALANCE SHEETS
| | | March 31, 2010 | | | December 31, 2009 | |
| | | (Unaudited) | | | | |
| ASSETS | | | | | | |
| CURRENT ASSETS | | $ | 0 | | | $ | 0 | |
| | | | | | | | | |
| Total current assets | | $ | 0 | | | $ | 0 | |
| | | | | | | | | |
| Total assets | | $ | 0 | | | $ | 0 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | | | | | |
| CURRENT LIABILITIES | | | | | | | | |
| Accounts payable | | $ | 202 | | | $ | 2,043 | |
| | | | | | | | | |
| Total current liabilities | | $ | 202 | | | $ | 2,043 | |
| | | | | | | | | |
| STOCKHOLDERS’ DEFICIT | | | | | | | | |
| Common stock: $0.00 1 par value; authorized 25,000,000 shares; | | | | | | | | |
| issued and outstanding: 8,000,000 | | | 8,000 | | | | 8,000 | |
| Additional paid-in capital | | | 156,760 | | | | 153,794 | |
| Accumulated deficit during development stage | | | (164,962 | ) | | | (163,837 | ) |
| | | | | | | | | |
| Total stockholders’ deficit | | $ | (202 | ) | | $ | (2,043 | ) |
| | | | | | | | | |
| Total liabilities and stockholders’ deficit | | $ | 0 | | | $ | 0 | |
See Accompanying Notes to Financial Statements.
SUNNYSIDE ACRES MOBILE ESTATES
(A Development Stage Enterprise)
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
| | | Three Months Ended | | | Nov. 2, 1992 (inception) to | |
| | | March 31, 2010 | | | March 31, 2009 | | | March 31, 2010 | |
| | | | | | | | | | | | | |
Revenues | | $ | 0 | | | $ | 0 | | | $ | 0 | |
| | | | | | | | | | | | | |
Cost of revenue | | | 0 | | | | 0 | | | | 0 | |
| | | | | | | | | | | | | |
Gross profit | | $ | 0 | | | $ | 0 | | | $ | 0 | |
| | | | | | | | | | | | | |
| General, selling and | | | | | | | | | | | | |
administrative expenses | | | 1,125 | | | | 5,500 | | | �� | 164,962 | |
Operating loss | | $ | (1,125 | ) | | $ | (5,500 | ) | | $ | (164,962 | ) |
| | | | | | | | | | | | | |
Nonoperating income (expense) | | | 0 | | | | 0 | | | | 0 | |
| | | | | | | | | | | | | |
Net loss | | $ | (1,125 | ) | | $ | (5,500 | ) | | $ | (164,962 | ) |
| | | | | | | | | | | | | |
Net loss per share, basic and diluted | | $ | (0.00 | ) | | $ | (0.00 | ) | | | | |
| | | | | | | | | | | | | |
Average number of shares of common stock outstanding | | | 8,000,000 | | | | 8,000,000 | | | | | |
See Accompanying Notes to Financial Statements.
SUNNYSIDE ACRES MOBILE ESTATES
(A Development Stage Enterprise)
CONDENSED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(UNAUDITED)
| | | | | | | | | | | | | | Accumulated | | | | | |
| | | | | | | | | | | | | | Deficit | | | | | |
| | | | | | | | | | | Additional | | | During | | | | | |
| | | Common Stock | | | Paid-In | | | Development | | | | | |
| | | Shares | | | Amount | | | Capital | | | Stage | | | Total | |
| | | | | | | | | | | | | | | (Restated) | | | | | |
| Balance, December 31, 2009 | | | 8,000,000 | | | $ | 8,000 | | | $ | 153,794 | | | $ | (163,837 | ) | | $ | (2,043 | ) |
| Expenses paid by shareholder | | | 0 | | | | 0 | | | | 2,966 | | | | 0 | | | | 2,966 | |
| Net loss, March 31, 2010 | | | | | | | | | | | | | | | (1,125 | ) | | | (1,125 | ) |
| Balance, March 31, 2010 | | | 8,000,000 | | | $ | 8,000 | | | $ | 156,760 | | | $ | (164,962 | ) | | $ | (202 | ) |
See Accompanying Notes to Financial Statements.
SUNNYSIDE ACRES MOBILE ESTATES
(A Development Stage Enterprise)
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| | Three Months Ended | | Nov. 2, 1992 (inception) to | |
| | March 31, 2010 | | March 31, 2009 | | March 31, 2010 | |
| Cash Flows From | | | | | | | | | |
| Operating Activities | | | | | | | | | |
| Net loss | | $ | (1,125 | ) | | $ | (5,500 | ) | | $ | (164,962 | ) |
| Adjustments to reconcile net loss | | | | | | | | | | | | |
| to cash used in operating activities: | | | | | | | | | | | | |
| Changes in assets and liabilities | | | | | | | | | | | | |
| Increase (decrease) in accounts payable | | | (1,841 | ) | | | 5,500 | | | | 202 | |
| | | | | | | | | | | | | |
| Net cash used in operating activities | | $ | (2,966 | ) | | $ | 0 | | | $ | (164,670 | ) |
| | | | | | | | | | | | | |
| Cash Flows From | | | | | | | | | | | | |
| Investing Activities | | $ | 0 | | | $ | 0 | | | $ | 0 | |
| | | | | | | | | | | | | |
| Cash Flows From | | | | | | | | | | | | |
| Financing Activities | | | | | | | | | | | | |
| Issuance of common stock | | $ | 0 | | | $ | 0 | | | $ | 22,000 | |
| Officer advances contributed to capital | | | 2,966 | | | | 0 | | | | 142,760 | |
| | | | | | | | | | | | | |
| Net cash provided by financing activities | | $ | 2,966 | | | $ | 0 | | | $ | 164,760 | |
| | | | | | | | | | | | | |
| Net increase (decrease) in cash | | $ | 0 | | | $ | 0 | | | $ | 0 | |
| | | | | | | | | | | | | |
| Cash, beginning of period | | | 0 | | | | 0 | | | $ | 0 | |
| | | | | | | | | | | | | |
| Cash, end of period | | $ | 0 | | | $ | 0 | | | $ | 0 | |
| | | | | | | | | | | | | |
| Supplemental Information and Non-monetary Transactions: | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Interest paid | | $ | 0 | | | $ | 0 | | | $ | 0 | |
| | | | | | | | | | | | | |
| Taxes paid | | $ | 0 | | | $ | 0 | | | $ | 0 | |
| | | | | | | | | | | | | |
| Officer advances contributed to capital | | $ | 2,966 | | | $ | 0 | | | $ | 142,760 | |
See Accompanying Notes to Financial Statements.
SUNNYSIDE ACRES MOBILE ESTATES
(A Development Stage Enterprise)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note 1. Nature of Business and Significant Accounting Policies
Nature of business:
The accompanying unaudited financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America. However, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted or condensed pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments of a normal recurring nature necessary for a fair presentation have been included. The results for interim periods are not necessarily indicative of results for the entire year. These condensed financial statements and accompanying notes should be read in conjunction with the Company’s annual financial statements and the notes ther eto for the year ended December 31, 2009 included in its Annual Report on Form 10-K.
A summary of the Company’s significant accounting policies is as follows:
Going concern
The Company's financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company does not have cash, or material assets, nor does it have operations or a source of revenue sufficient to cover its operation costs and allow it to continue as a going concern. The Company will be dependent upon the raising of additional capital through placement of our common stock in order to implement its business plan, or merge with an operating company. There can be no assurance that the Company will be successful in either situation in order to continue as a going concern. The officers and directors have committed to advancing certain operating costs of th e Company.
Note 2. Stockholders’ Equity
Net loss per common share
Net loss per share is calculated in accordance with FASB ASC 260, “Earnings Per Share.” The weighted-average number of common shares outstanding during each period is used to compute basic loss per share. Diluted loss per share is computed using the weighted averaged number of shares and dilutive potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised. As of March 31, 2010 and 2009, the Company had no dilutive potential common shares.
SUNNYSIDE ACRES MOBILE ESTATES
(A Development Stage Enterprise)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note 3. Related Party Transactions
The Company neither owns nor leases any real or personal property. The officer or resident agent of the corporation provides office services without charge. Such costs are immaterial to the financial statements and accordingly, have not been reflected therein. The officer and director for the Company is involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such person may face a conflict in selecting between the Company and their other business interest. The Company has not formulated a policy for the resolution of such conflicts.
Note 4. Warrants and Options
There are no warrants or options outstanding to acquire any additional shares of common stock of the Company.
Note 5. Officers Advances
Officers of the Company has advanced funds totaling $142,760 since inception, for expenses of the Company. The officers do not request reimbursement of these advances and the Company treated the $142,760 as additional paid-in capital.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2009. The matters discussed herein contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, which involve risks and uncertainties. All statements other than statements of historical information provided herein may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes", "anticipates", "plans", "expects" and similar expressions are intended to identify forward-looking statements. Factors that could cause actual results to differ materially from those reflected in the forward-looking statements include, but are not limited to, those discussed under the heading "Risk Factors" and elsewhere in this report and the risks discussed in our other filings with the SEC. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis, judgment, belief or expectation only as of the date hereof. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform the se statements to actual results.
As used in this Quarterly Report, references to "our company," "Company," "we" or "us" refers to Sunnyside Acres Mobile Estates, unless otherwise specifically stated or the context requires otherwise.
Introduction
We were incorporated under Nevada law on November 2, 1992. At formation, we had intended to develop a park that would have mobile home trailers of high quality construction, and to form a subsidiary that would serve as the general partner of a limited partnership which was to be a developer and builder of one or more mobile home parks in Southern California.
Between November 2, 1992 and approximately March 31, 1993, we investigated certain business opportunities but did not commence any activities in connection with our development and building activities. As at December 31, 1993, all funds raised by the sale of shares in order to fulfill our initial objective had been expended and we, thereafter became dormant. From February 1, 1993 until the present, we were inactive and could be deemed to be a so-called "shell" company, whose only purpose at this time is to determine and implement a new business purpose.
We will attempt to acquire other assets or business operations that will maximize shareholder value. No specific assets or businesses have been definitively identified and there is no certainty that any such assets or business will be identified or any transactions will be consummated.
We expect that we will need to raise funds in order to effectuate our business plan. We will seek to establish or acquire businesses or assets with funds raised either via the issuance of shares or debt. There can be no assurance that additional capital will be available to us. We may seek to raise the required capital by other means. We may have to issue debt or equity or enter into a strategic arrangement with a third party. We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. Since we have no such arrangements or plans currently in effect, our inability to raise funds will have a severe negative impact on our ability to remain a viable company. In pursuing the foregoing goals, we may seek to expand or change the composition of the Board or make changes to our current capital structure, including issuing additional shares or debt and adopting a stock option plan.
Recent Developments
We are in the final stages of negotiating an agreement to acquire a Chinese manufacturer of entertainment equipment, namely automated mahjong tables. We will file a report on Form 8-K containing detailed information on the target company and its business, including audited financial statements, and the purchase price, which is expected to consist of a substantial number of shares of our common stock, if we complete the acquisition.
Results of Operations
We have had no revenues from inception through March 31, 2010. We have a loss from inception through December 31, 2009 of $(163,837) and from inception through March 31, 2010 of $(164,962). We do not expect to generate any revenues over the next twelve months. Our principal business objective for the next 12 months will be to seek, investigate and, if such investigation warrants, engage in a business combination with a private entity whose business presents an opportunity for our shareholders.
During the next 12 months we anticipate incurring costs related to filing of Exchange Act reports, and costs relating to consummating an acquisition. We believe we will be able to meet these costs through amounts, as necessary, to be loaned by or invested in us by our principal stockholder, management or other investors. We have no specific plans, understandings or agreements with respect to the raising of such funds, and we may seek to raise the required capital by the issuance of equity or debt securities or by other means. Since we have no such arrangements or plans currently in effect, our inability to raise funds for the consummation of an acquisition may have a severe negative impact on our ability to become a viable company.
Financial Condition
Our auditor's going concern opinion for prior years ended and the notation in the financial statements indicate that we do not have significant cash or other material assets and that we are relying on advances from stockholders, officers and directors to meet limited operating expenses. We do not have sufficient cash or other material assets nor do we have sufficient operations or an established source of revenue to cover our operational costs that would allow us to continue as a going concern.
Since we have had no operating history nor any revenues or earnings from operations, with no significant assets or financial resources, we will in all likelihood sustain operating expenses without corresponding revenues, at least until the consummation of a business combination. This may result in our incurring a net operating loss which will increase continuously until we can consummate a business combination with a profitable business opportunity and consummate such a business combination.
We are dependent upon our principal stockholder and officer to meet any de minimis costs that we may incur.
Liquidity and Capital Resources
As of December 31, 2009, we had no assets and a stockholders' deficit of $(2,043). As of March 31, 2010, we had no assets and a stockholders' deficit of $(202). Our officer has advanced funds totaling $130,477 for expenses from November 1, 2007 through March 31, 2010. The officer does not request reimbursement of these advances and we have treated these advances as additional paid-in capital. The capital requirements relating to implementation of our business plan will be significant. A former officer had advanced $12,283 and waived repayment upon resignation. These advances were treated as additional paid-in capital at that time.
Management plans to rely on the proceeds from new debt or equity financing and the sale of shares held by it to finance its ongoing operations. During the next twelve months, we intend to continue to seek additional capital in order to meet our cash flow and working capital. There is no assurance that we will be successful in achieving any such financing or raise sufficient capital to fund our operations and further development. We cannot assure you that financing will be available to us on commercially reasonable terms, if at all. If we are not successful in sourcing significant additional capital in the near future, we will be required to significantly curtail or cease ongoing operations and consider alternatives that would have a material adverse affect on our business, results of operati ons and financial condition.
Off-Balance Sheet Arrangements
None.
Critical Accounting Policies and Estimates
We prepare our financial statements in accordance with accounting principles generally accepted in the United States, and make estimates and assumptions that affect our reported amounts of assets, liabilities, revenue and expenses. We base our estimates on historical experience and other assumptions that we believe are reasonable in the circumstances. Actual results may differ from these estimates.
The following critical accounting policies affect our more significant estimates and assumptions used in preparing our consolidated financial statements.
Our financial statements have been prepared on the going concern basis, which assumes the realization of assets and liquidation of liabilities in the normal course of operations. If we were not to continue as a going concern, we would likely not be able to realize on our assets at values comparable to the carrying value or the fair value estimates reflected in the balances set out in the preparation of our financial statements. There can be no assurances that we will be successful in generating additional cash from equity or other sources to be used for operations. Our financial statements do not include any adjustments to the recoverability of assets and classification of assets and liabilities that might be necessary should we be unable to continue as a going concern.
Going Concern
Our financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, we do not have cash, or material assets, nor does it have operations or a source of revenue sufficient to cover our operating costs and allow us to continue as a going concern. We will be dependent upon the raising of additional capital through placement of our common stock in order to implement its business plan, or merge with an operating company. There can be no assurance that we will be successful in either situation in order to continue as a going concern. Our officers and directors have committed to advancing certain operating costs.
Share Based Expenses
FASB ASC 718 "Compensation - Stock Compensation" prescribes accounting and reporting standards for all stock-based payments award to employees, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights, may be classified as either equity or liabilities. The Company determines if a present obligation to settle the share-based payment transaction in cash or other assets exists. A present obligation to settle in cash or other assets exists if: (a) the option to settle by issuing equity instruments lacks commercial substance or (b) the present obligation is implied because of an entity's past practices or stated polici es. If a present obligation exists, the transaction should be recognized as a liability; otherwise, the transaction should be recognized as equity The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50 "Equity - Based Payments to Non-Employees." Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.
ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable to small reporting companies.
ITEM 4. CONTROLS AND PROCEDURES.
(a) Evaluation of Disclosure Controls and Procedures.
Our senior management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act") designed to ensure that the information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its pri ncipal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures.
We have evaluated the effectiveness of the design and operation of its disclosure controls and procedures under the supervision of and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer has concluded that our disclosure controls and procedures are not effective. In particular, deficiencies in the design and operation of internal controls over financial reporting, which may be considered to be “material weaknesses,” have prevented us from detecting the inappropriate application of U.S. generally accepted accounting practices standards.
We will continue to create and refine a structure in which critical accounting policies and estimates are identified, and together with other complex areas, are subject to multiple reviews by accounting personnel. In addition, we will enhance and test our year-end financial close process. Finally, we plan to designate individuals responsible for identifying reportable developments. We believe these actions will remediate the material weakness by focusing additional attention and resources in our internal accounting functions. However, the material weakness will not be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.
(b) Changes in Internal Control Over Financial Reporting. There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during our most recently completed fiscal quarter which is the subject of this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
There are inherent limitations in any system of internal control. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that its objectives are met. Further, the design of a control system must consider that resources are not unlimited and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgment in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the indi vidual acts of some persons, by collusion of two or more people, or by management override of the controls.
PART II
Item 1A – RISK FACTORS.
There have been no material changes in the risk factors previously disclosed in the Registrant's Form 10-K for the fiscal year ended December 31, 2009, which are incorporated by reference into this report.
ITEM 6 - EXHIBITS
The following exhibits are filed with this report:
| 31.1 | Rule 13a-14(a)/15d-14(a) - Certification of Chief Executive and Financial Officer. |
| | |
| 32.1 | Section 1350 Certification - Chief Executive and Financial Officer. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | SUNNYSIDE ACRES MOBILE ESTATES | |
| | | | |
| Dated: May 7, 2010 | By: | /s/ Hui Ping Cheng | |
| | | Hui Ping Cheng | |
| | | President | |
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