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 February 28, 2001.
....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: __000-23559__
SUNBURST ACQUISITIONS III, INC.
---------------------------------------
(Name of small business in its charter)
Colorado 84-14320001
- ---------------------- -----------------------
(State or other (IRS Employer Id. No.)
jurisdiction of Incorporation)
4807 South Zang Way Morrison, Colorado 80465
- -------------------------------------------------------------------
(Address of Principal Office) Zip Code
Issuer's telephone number: (303) 979-2404
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 _____
At 2/28/01 the following shares of common were outstanding: Common Stock,
no par value, 33,303,840 shares.
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 February 28, 2001, 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.
(A Development Stage Company)
FINANCIAL STATEMENTS
Quarter Ended February 28, 2001
CONTENTS
Balance Sheet 1
Statements of Operations 2
Statements of Cash Flows 3
Notes to Financial Statements 4
Sunburst Acquisitions III, Inc.
(A Development Stage Company)
BALANCE SHEET
February 28, 2001
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 338
----------
Total current assets 338
TOTAL ASSETS $ 338
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 4,305
----------
Total current liabilities 4,305
STOCKHOLDERS' EQUITY
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 24,388
Deficit accumulated
during the
development stage (2,048,790)
---------
Total stockholders' equity (3,967)
---------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 338
=========
The accompanying notes are an integral part of the financial statements.
1
Sunburst Acquisitions III, Inc.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
For the
period from
inception
(August 27, For the three For the six
1997) to months ended months ended
February 28, February 28/29, February 28/29,
2001 2001 2000 2001 2000
----------- --------- --------- --------- --------
REVENUES $ - $ - $ - $ - $ -
----------- --------- --------- --------- ---------
EXPENSES
Amortization 300 - - - -
Consulting fees 4,935 - - - -
General office 966 - 36 - 162
Legal fees 17,873 - 557 195 560
Professional fees 17,537 3,487 4,556 3,831 4,556
Rent 2,100 150 150 300 300
Taxes and licenses 107 - - - -
Transfer agent 4,972 - 440 276 2,254
Valuation allowance 2,000,000 - - - -
----------- --------- --------- --------- ---------
Total expense 2,048,790 3,637 5,739 4,602 7,832
----------- --------- --------- --------- ---------
NET LOSS (2,048,790) (3,637) (5,739) (4,602) (7,832)
Accumulated deficit
Balance, Beginning
of period - (2,045,153) (23,364)(2,044,188) (21,271)
----------- --------- --------- --------- ---------
Balance,
End of period $(2,048,790)(2,048,790) $ (29,103)(2,048,790) (29,103)
=========== ========= ========= ========= =========
NET LOSS PER SHARE $ (0.06) $ (NIL) $ (NIL) $ (NIL) $ (NIL)
=========== ========= ========= ========= =========
WEIGHTED AVERAGE NUMBER
OF SHARES OF COMMON
STOCK AND COMMON STOCK
EQUIVALENTS
OUTSTANDING 34,948,999 33,303,840 33,303,840 33,303,840 33,380,932
=========== ========= ========= ========= =========
The accompanying notes are an integral part of the financial statements.
2
Sunburst Acquisitions III, Inc.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For the period
from inception
(August 27, For the six For the six
1997) to months ended months ended
February 28, February 28, February 29,
2001 2001 2000
--------------- ------------- -------------
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net Loss $ (2,048,790) $ (4,602) $ (7,832)
Adjustments to reconcile
net loss to net cash used
by operating activities:
Amortization expense 300 - 30
Rent expense 2,100 300 300
Stock issued for
consulting fees 4,935 - -
Decrease in prepaid expenses - - 474
Increase (decrease) in
accounts payable 4,305 (16,542) 7,158
-------------- ------------- -----------
Net cash flows from
operating activities (2,037,150) (20,844) (374)
CASH FLOWS FROM
INVESTING ACTIVITIES
Increase in organization costs (300) - -
-------------- ------------- -----------
Net cash flows from
investing activities (300) - -
CASH FLOWS FROM
FINANCING ACTIVITIES
Issuance of common stock 2,007,500 - -
Issuance of preferred
stock 8,000 - -
Additional paid-in capital 22,288 20,844 -
----------- ------------- -----------
Net cash flows from
financing activities 2,037,788 20,844 -
----------- ------------- -----------
Net increase (decrease)
in cash and cash
equivalents 338 - (374)
CASH AND CASH EQUIVALENTS
Beginning of Period - 338 1,512
----------- ------------- -----------
CASH AND CASH EQUIVALENTS,
End of Period $ 338 $ 338 $ 1,138
=========== ============= ===========
The accompanying notes are an integral part of the financial statements.
3
Sunburst Acquisitions III, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
February 28, 2001
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, 2000.
2. Agreement and Plan of Reorganization
- ------------------------------------
On August 30, 1999, the Company entered into an Agreement and Plan of
Reorganization by and among the Company, Sunburst Subsidiary, Inc., a
California corporation ("Subsidiary"), Workseek.com, a California corporation
("WorkSeek") and American Recruitment Conferences, Inc., a California
corporation ("American"). The Agreement contemplated the merger of American
and WorkSeek ("the Affiliated Companies") into Subsidiary subject to the
satisfaction of certain prescribed conditions, including additional Sunburst
funding through private placements of its securities.
In connection with the Agreement, the Company underwent a 16.16 for 1 forward
stock split of its then outstanding common shares. In addition, and in
anticipation of the merger mentioned above, the Company sold in a private
placement, a total of 1,000,000 post-split common shares at $2.00 per share.
Proceeds were received in the form of $1,400,000 cash and $600,000 in assigned
conversion agreements, under which creditors of American had agreed to convert
prior loans to American into common shares at the rate of $2.00 per share. The
private placement was completed in September 1999.
The cash proceeds from the private placement were advanced to American pursuant
to a promissory note and security agreement in the amount of $1,400,000. The
loan, was due and payable with interest at 10% per year on January 23, 2000.
The company also agreed to voluntarily cancel approximately 25,822,240
(post-split) common shares as part of the agreement, such that the total number
of shares outstanding after the private placement would be 7,481,600.
No payment has been made as to the note receivable and assigned conversion
agreements, and collection is doubtful. These amounts have been offset by
a full allowance for realization in the August 31, 2000 fiscal year.
4
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATIONS.
Liquidity and Capital Resources
The Company remains in the development stage. Until it conducted
the private placement in contemplation of the ARC/Workseek acquisition,
it had experienced no significant change in liquidity or capital resources
or stockholders' equity other than the amount of $20,844 from its inside
capitalization funds, and the expenditure of such funds in futherance of
the Company's business plan, including primarily expenditure of funds to
pay legal and accounting expenses. Consequently, the company's balance
sheet for the quater ended February 28, 2001, reflects a current asset
value of $338.
Results of operations
During the period from August 27, 1997 (inception) through February
28,2001, the Company engaged in no significant operations other than
organizational activities, acquisition of capital, preparation and filing
of the registration of its securities under the Securities Exchandge Act
of 1934, as amended, compliance with its periodic reporting requirements,
efforts to locate a suitable merger or acquisition candidate, and
the advance of funds to Workseek as discussed above. No revenues were
received by the Company during this period and the Company incurred
a net loss of $2,048,790.
For the quarter ended February 28, 2001, the Company incurred a net
loss of $3,637 as a result of expenses associated with compliance with the
reporting requirements of the Securities Exchange Act of 1934, and expenses
associated with locating and evaluating acquisiton candidates.
The company anticipates that until a business combination is completed with
an acquisition candidate, it will not generate revenue. It may also continue
to operate at a net loss after completing a business combination, depending
upon the performance of the acquired business,
Need for Additional Financing
The Company will require additional capital in order to meet its cash needs
for the next year, including the costs of compliance with the continuing
reporting requirements of the Securities Exchange Act of 1934, as amended.
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 availabe 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 throught the private placement
of restricted securities rather than through a public offering. The
Company does not currently contemplate making a Regulation S offering.
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBIT 27 - FINANCIAL DATA SCHEDULE
There have been no reports on Form 8-K for the quarter ending
February 28, 2001.
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.
(Registrant)
Date: March 30, 2001
/s/
Michael R. Quinn, Secretary/Treasurer