SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
x QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2009
o TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE
EXCHANGE ACT
Commission File Number: 0-52518
Exact name of small business issuer as specified in its charter
NEVADA | 20-8051714 | |
(State or other jurisdiction of | I.R.S. Employer | |
incorporation or organization) | Identification No. |
1108 West Valley Blvd, STE 6-399
Alhambra, CA 91803
(Address of principal executive offices)
(626) 407-2618
Issuer's telephone number
Check whether the registrant (1) filed all documents and reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer |_| Accelerated filer |_|
Non-accelerated filer |_| Smaller reporting company |X|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes o No x
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant 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 o No o
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 6,282,273 shares as of July 24, 2009.
Transitional Small Business Disclosure Format (Check one): Yes o No x
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SUNRISE HOLDINGS LIMITED
INDEX
PART I: FINANCIAL INFORMATION | ||||
Item 1: Financial Statements: | ||||
Consolidated Balance Sheets as of June 30, 2009 and September 30, 2008 (unaudited) | 4 | |||
Consolidated Statements of Expenses for the three months and nine months ended June 30, 2009 and 2008, and from October 25, 2005 (inception) to June 30, 2009 (unaudited) | 5 | |||
Consolidated Statements of Cash Flows for the nine months ended June 30, 2009 and 2008, and from October 25, 2005 (inception) to June 30, 2009 (unaudited) | 6 | |||
Notes to the Consolidated Financial Statements (unaudited) | 7 | |||
8 | ||||
Item 3: Quantitative and Qualitative Disclosures About Market Risk | 9 | |||
Item 4: Controls and Procedures | 9 | |||
10 | ||||
10 | ||||
10 | ||||
10 | ||||
10 | ||||
10 | ||||
11 |
PART I. FINANCIAL INFORMATION
ITEM 1. UNAUDITED FINANCIAL STATEMENTS
SUNRISE HOLDINGS LIMITED
(an Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2009 AND SEPTEMBER 30, 2008
(Unaudited)
June 30, 2009 | September 30, 2008 | |||||||
ASSETS: | ||||||||
Current assets: | ||||||||
Cash | $ | 16,401 | $ | 2,421,222 | ||||
Prepaid expenses | 300 | 1,200 | ||||||
Total current assets | 16,701 | 2,422,422 | ||||||
TOTAL ASSETS | $ | 16,701 | $ | 2,422,422 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY: | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 900 | $ | 900 | ||||
Advances from company officers | 18 | 99 | ||||||
Total Current Liabilities | 918 | 999 | ||||||
TOTAL LIABILITIES | 918 | 999 | ||||||
Stockholders' Equity: | ||||||||
Preferred Stock, $.001 par value; 10,000,000 shares authorized, | ||||||||
10,000,000 shares issued and outstanding | 10,000 | 10,000 | ||||||
Common Stock, $.001 par value; 190,000,000 shares authorized, | ||||||||
6,282,273 and 81,282,273 shares issued and outstanding at June 30, 2009 and September 30, 2008, respectively | 6,282 | 81,282 | ||||||
Additional paid-in capital | 146,465 | 3,002,724 | ||||||
Subscription receivable | - | (526,507 | ) | |||||
Deficit accumulated during the exploration stage | (146,964 | ) | (146,077 | ) | ||||
Total Stockholders' Equity | 15,783 | 2,421,423 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 16,701 | $ | 2,422,422 |
The accompanying notes are an integral part of these financial statements.
4
(an Exploration Stage Company)
CONSOLIDATED STATEMENTS OF EXPENSES
FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2009 AND 2008, AND THE PERIOD
FROM OCTOBER 25, 2005 (INCEPTION) THROUGH JUNE 30, 2009
(Unaudited)
October 25, 2005 | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | (Inception) to | ||||||||||||||||||
June 30, | June 30, | June 30, | ||||||||||||||||||
2009 | 2008 | 2009 | 2008 | 2009 | ||||||||||||||||
Expenses: | ||||||||||||||||||||
Exploration costs | $ | - | $ | - | $ | - | $ | - | $ | 37,956 | ||||||||||
General and administrative expenses | 2,390 | 5,185 | 12,109 | 61,367 | 171,500 | |||||||||||||||
Total Operating Expenses | 2,390 | 5,185 | 12,109 | 61,367 | 209,456 | |||||||||||||||
Net operating loss | (2,390 | ) | (5,185 | ) | (12,109 | ) | (61,367 | ) | (209,456 | ) | ||||||||||
Operating Income (Expense) | ||||||||||||||||||||
Interest income | 32 | 8,474 | 11,222 | 19,010 | 64,908 | |||||||||||||||
Gain on extinguishment of accounts payable | - | 5,669 | - | 5,669 | 5,669 | |||||||||||||||
Interest expense | - | - | - | (8,085 | ) | (8,085 | ) | |||||||||||||
Total Other Income and Expense | 32 | 14,143 | 11,222 | 16,594 | 62,492 | |||||||||||||||
Net Income (Loss) | $ | (2,358 | ) | $ | 8,958 | $ | (888 | ) | $ | (44,773 | ) | $ | (146,964 | ) | ||||||
Net Income (Loss) per Common Share - Basic and Diluted | $ | (0.00 | ) | $ | 0.00 | $ | (0.00 | ) | $ | (0.00 | ) | |||||||||
Per Share Information: | ||||||||||||||||||||
Weighted Average Number of Common Stock | ||||||||||||||||||||
Shares Outstanding - Basic and Diluted | 6,282,273 | 81,280,113 | 14,554,332 | 81,280,113 |
See the accompanying summary of accounting policies and notes to the financial statements.
5
(an Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JUNE 30, 2009 AND 2008 AND THE PERIOD
FROM OCTOBER 25, 2005 (INCEPTION) THROUGH JUNE 30, 2009
October 25, 2005 | ||||||||||||
For Nine Months Ended | (Inception) to | |||||||||||
June 30, | June 30, | |||||||||||
2009 | 2008 | 2009 | ||||||||||
Cash Flows from Operating Activities: | ||||||||||||
Net Loss | $ | (888 | ) | $ | (44,773 | ) | $ | (146,964 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
Stocks issued for services | - | 40,000 | 45,831 | |||||||||
Depreciation | - | 2,846 | 3,795 | |||||||||
Gain on extinguishment of accounts payable | - | (5,669 | ) | (5,669 | ) | |||||||
Imputed interest on shareholder advance | - | 2,711 | 2,711 | |||||||||
(Increase) decrease in prepaid expenses | 900 | (1,200 | ) | (300 | ) | |||||||
(Increase) in interest receivable | (6,752 | ) | (6,710 | ) | (33,259 | ) | ||||||
Increase (decrease) in accounts payable | - | (16,143 | ) | 6,569 | ||||||||
Net Cash Flows Provide by (Used by) Operations | (6,740 | ) | (28,938 | ) | (127,286 | ) | ||||||
Cash Flows from Investing Activities: | ||||||||||||
Sale (Purchase) of assets | 2,000 | - | (1,795 | ) | ||||||||
Net Cash Flows Provided by (Used in) Investing Activities | 2,000 | - | (1,795 | ) | ||||||||
Cash Flows from Financing Activities: | ||||||||||||
Stocks issued for cash | - | 3,000,000 | 3,045,464 | |||||||||
Shares Rescinded | (2,400,000 | ) | - | (2,400,000 | ) | |||||||
Issuance of note receivable | - | (500,000 | ) | (500,000 | ) | |||||||
Repayment for advance from company officer | (99 | ) | (62,101 | ) | (62,200 | ) | ||||||
Advance from company officer | 18 | 2,161 | 62,218 | |||||||||
Net Cash Flows (Used in) Provided by Financing Activities | (2,400,081 | ) | 2,440,060 | 145,482 | ||||||||
Net Increase (Decrease) in Cash | (2,404,821 | ) | 2,411,122 | 16,401 | ||||||||
Cash and cash equivalents - Beginning of period | 2,421,222 | - | - | |||||||||
Cash and cash equivalents - End of period | $ | 16,401 | $ | 2,411,122 | $ | 16,401 | ||||||
SUPPLEMENTARY INFORMATION | ||||||||||||
Interest Paid | $ | - | $ | - | $ | - | ||||||
Taxes Paid | $ | - | $ | - | $ | - | ||||||
Supplement disclosure of non cash investing and financing activities: | ||||||||||||
Reduction of note in connection with share recission | $ | 500,000 | $ | - | $ | 500,000 |
See the accompany summary of accounting policies and notes to the financial statements.
6
(an Exploration Stage Company)
(Unaudited)
Note 1 - Basis of Presentation
The accompanying unaudited interim consolidated financial statements of Sunrise Holdings Limited have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with Sunrise's audited 2008 annual financial statements and notes thereto filed with the SEC on form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the result of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements, which would substantially duplicate the disclosure required in Sunrise's 2008 annual financial statements have been omitted.
Note 2 - Going Concern
Sunrise's financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business for the foreseeable future. Since inception, the Company has accumulated losses aggregating to $146,964 and has insufficient working capital to meet operating needs for the next twelve months as of June 30, 2009, all of which raise substantial doubt about Sunrise's ability to continue as a going concern.
Note 3 - Rescission of Previous Sales of Common Stock
On October 30, 2008, the Board of Directors of Sunrise authorized the termination and rescission of its previous sales of its common 75,000,000 stock and stock purchase warrants in the aggregate amount of $3,000,000 that were sold by the Corporation to three non-us investors during January 2008. The Corporation returned to investors the aggregate amount of $2,933,128, which includes (1): $750,000 cash to Weiquan Tian; (2) $750,000 cash to Xuding Jiao; (3) $900,000 cash and a convertible secured promissory note in the principal amount of $500,000 (U.S.) and its accrued interests of $33,128 (U.S.) from SJ Electronics, Inc. to Xuguang Sun and cancelled all the 75,000,000 outstanding shares of common stock and stock purchase warrants previously issued to them.
The Corporation and the stockholders mutually agreed to rescind the stock purchase due to changes in the prospective business planning of the Corporation and the recent material changes in the natural resources industry, particularly the decline in prices of natural resources.
Note 4 – Sale of Common Stock of eFuture International Limited
On February 5, 2008, Sunrise incorporated a new wholly owned subsidiary named “eFuture International Limited” in the British Virgin Islands. The Company intended to conduct its business through this new subsidiary.
On March 2, 2009, the Board of Directors of Sunrise approved the sale of all the Common Stock of eFuture International Limited to the Chief Executive Officer of the Company for $2,000. At the closing day of the sale, eFuture had no assets and liabilities.
Note 5 - Related Party Transactions
On October 30, 2008, the Company returned $900,000 cash and a convertible secured promissory note in the principal amount of $500,000 (U.S.) and its accrued interest of $33,128 (U.S.) from SJ Electronics, Inc. to our president Xuguang Sun and cancelled all the 38,750,000 shares of common stock and stock purchase warrants previously issued to him for his $1,500,000 investment made to the Company.
On March 2, 2009, Mr. Xuguang Sun, the Chief Executive Officer of the Company purchased all the Common Stock of eFuture International Limited for $2,000.
As of June 30, 2009, an officer of the Company advanced $18 to the Company. These advances are unsecured, non-interest bearing and have no fixed terms of repayment. No imputed interest was included due to the amount being immaterial.
Note 6 - Interest Income
For the three and nine months ended June 30, 2009, the Company earned $32 and $11,222, respectively in interest income from cash invested in a money market account.
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Item 2. Management's Discussion and Analysis of Financial Condition or Results of Operations
Forward-looking Information
This quarterly report contains forward-looking statements. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. These statements relate to future events or to our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. There are a number of factors that could cause our actual results to differ materially from those indicated by such forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Moreover, we do not assume responsibility for the accuracy and completeness of such forward-looking statements. We are under no duty to update any of the forward-looking statements after the date of this report to conform such statements to actual results.
The following discussion should be read along with our financial statements as of June 30, 2009, which are included in another section of this document and with our Form 10-K as of September 30, 2008 which contains a more detailed discussion of our plan. This discussion contains forward-looking statements about our expectations for our business and financial needs. These expectations are subject to a variety of uncertainties and risks that may cause actual results to vary significantly from our expectations. The cautionary statements made in our Report on Form 10-K should be read as applying to all forward-looking statements in any part of this report.
General
The following discussion and analysis summarizes the results of operations of Sunrise Holdings Limited, Inc. (the "Sunrise" or "we") for the quarter ended June 30, 2009.
Sunrise currently is working on to identify and develop some projects in China. At present, the Company has no current operating income.
Results of Operations
Comparison of the three months ended June 30, 2009 and 2008
For the three-month period ended June 30, 2009 compared to the three month period ended June 30, 2008, Sunrise had a net loss of $2,358 compared to a net income of $8,958, respectively. The increase in net loss was mainly due to a decrease in interest income, though the administrative cost was decreased.
No mining exploration cost during the three month period ended June 30, 2009 and the comparable period in 2008 because there was no exploration activity going on during those periods.
General and administrative expenses decreased 53.91% to $2,390 during the three month period ended June 30, 2009 as compared to $5,185 for the comparable period in 2008. This decrease was mainly due to a decrease in professional fees.
Comparison of the nine months ended June 30, 2009 and 2008
For the nine month period ended June 30, 2009 compared to the nine month period ended June 30, 2008, Sunrise had net loss of $888 compared to a net loss of $44,773, respectively. This decrease in net loss was mainly due to a decrease in professional fees, stock-based compensation and interest expense.
No mining exploration cost during the nine month period ended June 30, 2009 and the comparable period in 2008 because there was no exploration activity going on during those periods.
General and administrative expenses decreased 80.27% to $12,109 during the nine month period ended June 30, 2009 as compared to $61,367 for the comparable period in 2008. This decrease was mainly due to a decrease in professional fees and stock-based compensation.
Liquidity and Capital Resources
At June 30, 2009, Sunrise had current assets of $16,701, working capital surplus of $15,783, and had $6,740 of net cash used by operations during the nine month period ended June 30, 2009.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is subject to certain market risks, including changes in interest rates and currency exchange rates. The Company does not undertake any specific actions to limit those exposures.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act (defined below). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act") is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to 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, have been detected. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.
Changes in Internal Control Over Financial Reporting
In addition, our management with the participation of our Principal Executive Officer and Principal Financial Officer have determined that no change in our internal control over financial reporting occurred during or subsequent to the quarter ended June 30, 2009 that has materially affected, or is (as that term is defined in Rules 13(a)-15(f) and 15(d)-15(f) of the Securities Exchange Act of 1934) reasonably likely to materially affect, our internal control over financial reporting.
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Item 1 Legal Proceedings
N/A
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
N/A
Item 3 Defaults Upon Senior Securities
N/A
Item 4 Submission of Matters to a Vote of Security Holders
N/A
Item 5 Other Information
N/A
Item 6 Exhibits
Exhibit Number, Name and/or Identification of Exhibit
31.1 | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2 | Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1 | Certification of the Chief Executive Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
32.2 | Certification of the Chief Financial Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
July 24, 2009 | Sunrise Holdings Limited | |
By: | /s/ Xuguang Sun | |
Xuguang Sun, Chief Executive Officer and President |
11