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 December 31, 2002.
....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: __000-24703__
SUNBURST ACQUISITIONS VII, INC.
---------------------------------------
(Name of small business in its charter)
Colorado 84-1466651
- ---------------------- -----------------------
(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 _____
Applicable only to issuers involved in bankruptcy proceedings during
the past five years
Check whether the issuer has 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 _____ 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 12/31/02 the
following shares of common were outstanding: Common Stock, no par value,
2,135,000 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 December 31, 2002, 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 VII, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
Quarter Ended December 31, 2002
CONTENTS
Balance Sheet F-1
Statements of Operations F-2
Statements of Cash Flows F-3
Notes to Financial Statements F-4
Sunburst Acquisitions VII, Inc.
(A Development Stage Company)
BALANCE SHEET
December 31, 2002
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 819
---------
Total current assets 819
---------
TOTAL ASSETS $ 819
=========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable-related party $ 7,527
---------
Total current liabilities 7,527
STOCKHOLDERS' EQUITY (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;
1,935,000 shares issued and
outstanding 11,935
Additional paid-in capital 5,200
Deficit accumulated
during the
development stage (23,843)
---------
(6,708)
---------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 819
=========
The accompanying notes are an integral part of the financial statements.
F-1
Sunburst Acquisitions VII, Inc.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<table> <c> <c> <c> <c> <c>
<s>
For the
period from
inception
(June 30,
1998) to For the three months For the six months
December ended December 31, ended December 31,
31, 2002 2002 2001 2002 2001
----------- --------- --------- --------- ---------
REVENUES $ - $ - $ - $ - $ -
----------- --------- --------- --------- ---------
EXPENSES
Amortization 300 - - - -
Bank charges 7 - - - -
Consulting fees 1,935 - - - -
General office 942 - - 25 -
Gifts 24 - - - -
Legal fees 6,976 - 2,599 - 2,599
Professional fees 10,959 - 828 - 2,224
Rent 2,700 150 150 300 300
----------- --------- --------- --------- ---------
Total expense 23,843 150 3,577 (325) 5,123
----------- --------- --------- --------- ---------
NET LOSS (23,843) (150) (3,577) (325) (5,123)
Accumulated deficit
Balance, Beginning
of period - (23,693) (18,685) (23,518) (17,139)
----------- --------- --------- --------- ---------
Balance,
end of period $ (23,843) $ (23,693) $ (22,262) $ (23,843) $ (22,262)
=========== ========= ========= ========= =========
NET LOSS PER SHARE $ (0.01) $ (0.00) $ (0.00) $ (0.00) $ (0.00)
=========== ========= ========= ========= =========
WEIGHTED AVERAGE NUMBER
OF SHARES OF COMMON
STOCK AND COMMON STOCK
EQUIVALENTS
OUTSTANDING 2,135,000 2,135,000 2,135,000 2,135,000 2,135,000
=========== ========= ========= ========= =========
</table>
The accompanying notes are an integral part of the financial statements.
F-2
Sunburst Acquisitions VII, Inc.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<table> <c> <c> <c>
<s>
For the period
from inception
(June 30, For the six For the six
1998) to months ended months ended
December 31, December 31, December 31,
2002 2002 2001
--------------- ------------- -------------
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net Loss $ (23,843) $ (325) $ (5,123)
Adjustments to reconcile
net loss to net cash flows
from operating activities:
Amortization 300 - -
Rent expense 2,700 300 300
Stock issued for
consulting fees 1,935 - -
Increase (decrease) in accounts
payable - (857) 1,224
Increase in accounts
payable - related party 7,527 857 2,599
-------------- ------------- -------------
Net cash flows from
operating activities (11,381) (25) (1,000)
CASH FLOWS FROM
INVESTING ACTIVITIES
Increase in organization costs (300) - -
-------------- ------------- -------------
Net cash flows from
investing activities (300) - -
CASH FLOWS FROM
FINANCING ACTIVITIES
Shareholder contributions 2,500 - -
Issuance of preferred
Stock, converted to
common stock 10,000 - -
-------------- ------------- -------------
Net cash flows from
financing activities 12,500 - -
-------------- ------------- -------------
Net increase (decrease)
in cash and cash
equivalents 819 (25) 1,000
CASH AND CASH EQUIVALENTS,
Beginning of Period - 844 1,844
-------------- ------------- -------------
CASH AND CASH EQUIVALENTS,
End of Period $ 819 $ 819 $ 844
============== ============= =============
</table>
The accompanying notes are an integral part of the financial statements.
F-3
Sunburst Acquisitions VII, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
1. Management's Representation of Interim Financial Information
------------------------------------------------------------
The accompanying financial statements have been prepared by Sunburst
Acquisitions VII, 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 June 30, 2002.
F-4
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATIONS.
Liquidity and Capital Resources
The Company remains in the development stage and, since
inception, has experienced no significant change in liquidity or capital
resources or stockholder's equity other than the receipt of net proceeds
in the amount of $12,500 from its inside capitalization funds.
The Company's balance sheet for the period ending December 31,
2002 reflects a current asset value and a total asset value
of $819, in the form of cash, as compared to $844 in current and
total assets as of December 31, 2001.
The Company's business plan is to seek, investigate, and, if
warranted, acquire one or more properties or businesses, and to pursue
other related activities intended to enhance shareholder value. The
acquisition of a business opportunity may be made by purchase, merger,
exchange of stock, or otherwise, and may encompass assets or a business
entity, such as a corporation, joint venture, or partnership. The
Company has very limited capital, and it is unlikely that the Company
will be able to take advantage of more than one such business
opportunity.
The Company will carry out its plan of business as discussed
above. The Company cannot predict to what extent its liquidity and
capital resources will be diminished prior to the consummation of a
business combination or whether its capital will be further depleted by
the operating losses (if any) of the business entity which the Company
may eventually acquire.
Results of Operations
During the period from June 30, 1998 (inception) through
December 31, 2002, the Company has engaged in no significant operations
other than organizational activities, acquisition of capital and preparation
for registration of its securities under the Securities Exchange Act of
1934, as amended. No revenues were received by the Company during
this period.
For the current fiscal year, the Company anticipates incurring a
loss as a result of expenses associated with registration under the Securities
Exchange Act of 1934, and expenses associated with locating and evaluating
acquisition candidates. The Company anticipates that until a business
combination is completed with an acquisition candidate, it will not generate
revenues and may continue to operate at a loss after completing a business
combination, depending upon the performance of the acquired business.
For the quarters ended December 31, 2002 and 2001, the Company
showed net losses of $150 and $3,577, respectively. The decrease in
loss is due primarily to the timing differences related to expenses
incurred in relation to reporting requirements, and general and
administrative expenses. For the six months ended December 31, 2002 and
2001, the Company showed net losses of $325 and $5,123, respectively.
The decrease in loss is due primarily to the timing differences related
to expenses incurred in relation to reporting requirements, and general
and administrative expenses.
Need for Additional Financing
The Company believes that its existing capital will be sufficient
to meet the Company's cash needs, including the costs of compliance
with the continuing reporting requirements of the Securities Exchange
Act of 1934, as amended, for a period of approximately one year.
Accordingly, in the event the Company is able to complete a business
combination during this period, it anticipates that its existing capital will
be sufficient to allow it to accomplish the goal of completing a business
combination. There is no assurance, however, that the available funds
will ultimately prove to be adequate to allow it to complete a business
combination, and once a business combination is completed, the
Company's needs for additional financing are likely to increase
substantially.
No commitments to provide additional funds have been made by
management or other stockholders. Accordingly, there can be no
assurance that any additional funds will be available to the Company to
allow it to cover its expenses.
The Company might seek to compensate providers of services by
issuances of stock in lieu of cash.
Item 3. CONTROLS AND PROCEDURES
As of the filing date of this report, we carried out an evaluation,
under the supervision and with the participation of Jay Lutsky, President,
of the effectiveness of the design and operation of our disclosure controls
and procedures. Based on this evaluation, Mr. Lutsky concluded that
our disclosure controls and procedures are effective in timely alerting
management to material information required to be included in our periodic
SEC reports. It should be noted that design of any system of controls is
based in part upon certain assumptions about the likelihood of future events,
and there can be no assurance that any design will succeed in achieving its
stated goals under all potential future conditions, regardless of how remote.
PART II
ITEM 5. OTHER INFORMATION
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
31 Certification of Chief Executive Officer and Chief Financial
and Accounting Officer of the Company Accompanying Periodic
Reports pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 (as filed herewith).
32 Certification of Chief Executive Officer and Chief Financial
and Accounting Officer of the Company pursuant to Section 906
of the Sarbanes-Oxley Act of 2002 (as filed herewith).
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 VII, INC.
(Registrant)
Date: November 8, 2005
/s/
Jay Lutsky, President