U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
Form 10-QSB
(Mark One)
X...Quarterly report under section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended May 31, 2008.
....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 No: __0-23559__
SUNBURST ACQUISITIONS III, INC.
---------------------------------------
(Exact name of small business as specified in its charter)
Colorado 84-14320001
---------------------- -----------------------
(State or other (IRS Employer Id. No.)
jurisdiction of Incorporation)
6 Mt. Top Drive Park City, UT 84060
-----------------------------------------------------
(Address of Principal Office) (Zip Code)
Issuer's telephone number: (435) 615-6585
1776 Park Avenue #4, Suite 220 Park City, UT 84060
---------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities 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 ____
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
Yes __X___ No _____
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. At May 31, 2008,
33,303,840 shares were outstanding.
Transitional Small Business Disclosure
Format (Check one):
Yes ____ _ No __ X____
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS
(a) The financial statements of registrant for the
three months ended May 31, 2008, follow. The financial statements
reflect all adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the interim period
presented.
SUNBURST ACQUISITIONS III, INC.
FINANCIAL STATEMENTS
May 31, 2008
SUNBURST ACQUISITIONS III, INC.
(A Development Stage Company)
BALANCE SHEET
May 31, 2008
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 411
---------
Total current assets 411
---------
TOTAL ASSETS $ 411
=========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Notes payable - related party $ 76,120
Accounts payable 6,826
---------
Total current liabilities 82,946
STOCKHOLDERS' DEFICIT
Preferred stock, no par value
20,000,000 shares authorized;
no shares issued and outstanding -
Common stock, no par value;
100,000,000 shares authorized;
33,303,840 shares issued and
outstanding 2,020,435
Additional paid-in capital 53,217
Deficit accumulated
during the development stage (2,156,187)
---------
Total stockholders' deficit (82,535)
---------
TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIT $ 411
=========
The accompanying notes are an integral part of the financial statements.
F-1
SUNBURST ACQUISITIONS III, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
Period
August 27, 1997 For the three months For the nine months
(inception) to ended May 31, ended May 31,
May 31, 2008 2008 2007 2008 2007
----------------- ----------- ----------- ----------- -----------
REVENUES $ 1,079 $ - $ - $ 12 $ -
----------------- ----------- ----------- ----------- -----------
EXPENSES
Amortization 300 - - - -
Bank charges 138 18 18 66 54
Consulting fees 22,200 - 1,272 - 7,310
General office 3,756 239 85 636 305
Interest 15,416 1,513 1,253 4,516 3,345
Legal fees 53,757 - 122 551 4,117
Professional fees 38,696 6,050 - 6,911 1,775
Rent 6,450 150 150 450 450
Taxes and licenses 152 - - 10 10
Transfer agent 14,572 776 225 1,078 1,150
Travel 1,829 - - 1,829 -
Valuation allowance 2,000,000 - - - -
----------------- ----------- ----------- ----------- -----------
Total expense 2,157,266 8,746 3,125 16,047 18,516
----------------- ----------- ----------- ----------- -----------
NET INCOME(LOSS) (2,156,187) ( 8,746) (3,125) (16,035) (18,516)
Accumulated deficit
Balance, Beginning
of period - (2,147,441) (2,134.951) (2,140,152) (2,119,560)
----------------- ----------- ----------- ----------- -----------
Balance,
end of period $ (2,156,187) $(2,156,187) $(2,138,076) $(2,156,187) $(2,138,076)
================= =========== =========== =========== ===========
NET INCOME(LOSS)
PER SHARE $ (0.06) $ (0.00) $ (0.00) $ (0.00) $ (0.00)
================= =========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF SHARES OF COMMON
STOCK AND COMMON STOCK
EQUIVALENTS
OUTSTANDING 33,303,840 33,303,840 33,303,840 33,303,840 33,303,840
================= =========== =========== =========== ===========
The accompanying notes are an integral part of the financial statements.
F-2
Sunburst Acquisitions III, Inc.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
Period
August 27, 1997
(inception) For the nine months
to May 31, ended May 31,
2008 2008 2007
--------------- ------------- -----------
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net Loss $ (2,156,187) $ (16,035) $ (18,516)
Adjustments to reconcile
net loss to net cash flows
from operating activities:
Amortization 300 - -
Rent expense 5,250 450 450
Stock issued for
consulting fees 4,935 - -
Increase(Decrease) in
accounts payable 6,826 6,826 5,701
--------------- ------------- -----------
Net cash flows from
operating activities (2,138,876) (8,759) (12,365)
CASH FLOWS FROM
INVESTING ACTIVITIES
Increase in organization costs (300) - (300)
--------------- ------------- -----------
Net cash flows from
investing activities (300) - (300)
CASH FLOWS FROM
FINANCING ACTIVITIES
Issuance of common stock 2,007,500 - -
Increase in notes
Payable to related party 76,121 9,016 10,845
Issuance of preferred
Stock 8,000 - -
Aditional paid-in capital 47,967 - -
-------------- ------------- -----------
Net cash flows from
financing activities 2,139,588 9,016 10,845
-------------- ------------- -----------
Net increase (decrease) in
cash and cash equivalents 411 256 (1,520)
CASH AND CASH EQUIVALENTS,
Beginning of Period - 155 1,542
-------------- ------------- -----------
CASH AND CASH EQUIVALENTS,
End of Period $ 411 $ 411 $ 22
============== ============= ===========
The accompanying notes are an integral part of the financial statements.
F-3
Sunburst Acquisitions III, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
May 31, 2008
(Unaudited)
1. Management's Representation of Interim Financial Information
------------------------------------------------------------
The accompanying financial statements have been prepared by Sunburst
Acquisitions III, Inc. without audit pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
as allowed by such rules and regulations, and management believes that the
disclosures are adequate to make the information presented not misleading.
These financial statements include all of the adjustments which, in the opinion
of management, are necessary to a fair presentation of financial position and
results of operations. All such adjustments are of a normal and recurring
nature. These financial statements should be read in conjunction with the
audited financial statements at August 31, 2007.
F-4
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATIONS.
SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this report, including statements in the following
discussion, which are not statements of historical fact, are what are known as
"forward-looking statements," which are basically statements about the future.
For that reason, these statements involve risk and uncertainty since no one can
accurately predict the future. Words such as "plans," "intends," "will,"
"hopes," "seeks," "anticipates," "expects," and the like, often identify such
forward-looking statements, but are not the only indication that a statement is
a forward-looking statement. Such forward-looking statements include statements
concerning our plans and objectives with respect to the present and future
operations of the Company, and statements which express or imply that such
present and future operations will or may produce revenues, income or profits.
Numerous factors and future events could cause the Company to change such plans
and objectives, or fail to successfully implement such plans or achieve such
objectives, or cause such present and future operations to fail to produce
revenues, income or profits.
Therefore, the reader is advised that the following discussion should be
considered in light of the discussion of risks and other factors contained in
this report on Form 10QSB and in the Company's other filings with the Securities
and Exchange Commission. No statements contained in the following discussion
should be construed as a guarantee or assurance of future performance or future
results.
Liquidity and Capital Resources
As of May 31, 2008, the Company remains in the development stage. For the
period ended May 31, 2008, the Company's balance sheet reflects current and
total assets of $411, and current liabilities of $82,946.
Results of Operations
During the period from August 27, 1997 (inception) through May 31, 2008, the
Company has accumulated a deficit of $2,156,187. This deficit is primarily the
result of a $2,000,000 valuation allowance taken against a promissory note from
American Recruitment Conferences, Inc., a California corporation ("ARC") and
Workseek.com, Inc., a California corporation ("Workseek"). The promissory note
was issued to the Company to evidence a loan made in conjunction with execution
of an Agreement and Plan of Reorganization with ARC and Workseek, dated August
30, 1999. The proposed transaction was not consummated and recovery of the
amount due under the promissory note was doubtful. As a result, as of August 31,
2000, the promissory note receivable was offset by a full allowance for
realization.
2
During the period from inception to May 31, 2008, the Company has engaged in
no significant operations other than organizational activities, acquisition of
capital, preparation and filing of the registration of its securities under the
Securities Exchange Act of 1934, as amended, compliance with its periodical
reporting requirements, and efforts to locate a suitable merger or acquisition
candidate. No revenues were received by the Company during this period.
From the date of filing of its registration statement under the Securities
Exchange Act of 1934 (December 29, 1997) until the end of the fourth quarter of
its 2001 fiscal year, the Company filed all required periodic reports under the
Securities Exchange Act of 1934. After completing the filing of the report on
Form 10KSB for the fiscal year ended August 31, 2001, the Company ceased filing
reports in order to avoid incurring additional legal and accounting expenses.
After the 2001 fiscal year, the Company remained dormant throughout the fiscal
years ending August 31, 2002 and August 31, 2003. The Company incurred no
expenses for legal and accounting fees in 2002 and 2003, and it also ceased all
efforts related to seeking a suitable merger or acquisition candidate during the
period it remained dormant.
Plan of Operations and Need for Additional Financing
The Company's plan of operations since August 31, 2001 was to remain dormant in
order to avoid incurring legal and accounting fees related to compliance with
its reporting obligations. However, in February 2004 there was a change of
control, and the Company elected to begin taking the steps necessary to file all
delinquent reports and to once again become current in compliance with its
reporting obligations under the Securities Exchange Act of 1934. As of the date
of filing of this report on Form 10QSB for the period ended May 31, 2008, the
Company has completed the filing of all delinquent periodic reports and is
current with its periodic reporting obligations under the Securities Exchange
Act of 1934.
For the fiscal year ending August 31, 2008, the Company's plan of operations is
to remain current in compliance with its reporting obligations under the
Securities Exchange Act of 1934 and to engage in efforts to locate a suitable
merger or acquisition candidate. The Company will require additional capital in
order to pay the costs associated with making required filings and seeking out
suitable merger or acquisition candidates.
No specific commitments to provide additional funds have been made by management
or other stockholders, and the Company has no current plans, proposals,
arrangements or understandings with respect to the sale or issuance of
additional securities prior to the location of a merger or acquisition
candidate. Accordingly, there can be no assurance that any additional funds will
be available to the Company to allow it to cover its expenses. Notwithstanding
the foregoing, to the extent that additional funds are required, the Company
anticipates receiving such funds in the form of advancements from current
shareholders without issuance of additional shares or other securities, or
through the private placement of restricted securities rather than through a
public offering.
3
The Company may also seek to compensate providers of services by issuances of
stock in lieu of cash. For information as to the Company's policy in regard to
payment for consulting services, see "Certain Relationships and Transactions."
Item 3. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures: Disclosure controls and
procedures are designed to ensure that information required to be disclosed in
the reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported, within the time period specified in the SEC's rules and
forms. Disclosure controls and procedures include, without limitation, controls
and procedures designed to ensure that information required to be disclosed in
the reports filed under the Exchange Act is accumulated and communicated to
management, including the Chief Executive Officer and Chief Financial Officer,
as appropriate, to allow timely decisions regarding required disclosure. As of
the end of the period covered by this report, we carried out an evaluation,
under the supervision and with the participation of our management, including
our Chief Executive Officer and Chief Financial Officer, of the effectiveness of
the design and operation of our disclosure controls and procedures. Based upon
and as of the date of that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and procedures were
designed and were effective in ensuring that information required to be
disclosed in the reports submitted under the Exchange Act is recorded,
processed, summarized and reported as and when required.
Changes in Internal Control over Financial Reporting: There were no changes in
our internal controls or in other factors that could affect these controls
subsequent to the date of their evaluation, including any deficiencies or
material weaknesses of internal controls that would require corrective action.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS
The following exhibits are filed herewith:
31.1 Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the
Securities Exchange Act of 1934, as amended, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
4
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.
SUNBURST ACQUISITIONS III, INC.
By: /S/ Scott Mac Caughern
----------------------
Scott Mac Caughern
(Principal Executive, Financial
and Accounting Officer and Director)
Date: July 25, 2008
5