10-Q 1 sunrise10q12312009.htm Unassociated Document
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 December 31, 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 x     No   o
 
 
 
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 January 26, 2010.

Transitional Small Business Disclosure Format (Check one): Yes  o  No x


SUNRISE HOLDINGS LIMITED

INDEX

   
     
   
     
Consolidated Balance Sheets as of December 31, 2009 and September 30, 2009 (unaudited)
  
4
     
Consolidated Statements of Expenses for the three months ended December 31, 2009 and 2008, and from October 25, 2005 (inception) to December 31, 2009 (unaudited)
  
5
     
Consolidated Statements of Cash Flows for the three months ended December 31, 2009 and 2008, and from October 25, 2005 (inception) to December 31, 2009 (unaudited)
  
6
     
Notes to the Consolidated Financial Statements (unaudited)
  
7
     
Item 2: Management's Discussion and Analysis or Plan of Operations
  
8
     
Item 3: Quantitative and Qualitative Disclosures About Market Risk
  
9
     
Item 4: Controls and Procedures
  
9
     
   
     
 
10
     
 
10
     
 
10
     
 
10
     
 
10
     
 
10
     
 
11

 
 
3 
 
 

ITEM 1. UNAUDITED FINANCIAL STATEMENTS
 
SUNRISE HOLDINGS LIMITED
(an Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2009 AND SEPTEMBER 30, 2009
(Unaudited)
 
   
DECEMBER 31, 2009
    
SEPTEMBER 30, 2009
  
ASSETS:
            
Current assets:
            
   Cash
  
$
9,475
    
$
12,396
  
   Prepaid expenses
    
1,646
      
2,195
  
                 
      Total current assets
    
11,121
      
14,591
  
                 
TOTAL ASSETS
  
$
11,121
    
$
14,591
  
                 
                 
               
Current liabilities:
                
   Accounts payable
  
$
3,290
    
$
1,440
  
   Advances from company officers
    
36
      
18
  
                 
Total Current Liabilities
    
3,326
      
1,458
  
                 
TOTAL LIABILITIES
    
3,326
      
1,458
  
                 
Stockholders' Equity:
                
Preferred Stock, $.001par 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 shares issued and outstanding at December 31, 2009 and September 30, 2009
    
6,282
      
6,282
  
Additional paid-in capital
    
146,465
      
146,465
  
Subscription receivable
    
-
      
-
  
Deficit accumulated during the exploration stage
    
(154,952
)
    
(149,614
)
                 
Total Stockholders' Equity
    
7,795
      
13,133
  
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  
$
11,121
    
$
14,591
  
  
  
 
The accompanying notes are an integral part of these financial statements.
 
 
4 
 
 
 
 (an Exploration Stage Company)
CONSOLIDATED STATEMENTS OF EXPENSES
FOR THE THREE MONTHS ENDED DECEMBER 31, 2009 AND 2008 AND THE PERIOD
FROM OCTOBER 25, 2005 (INCEPTION) THROUGH DECEMBER 31, 2009
(Unaudited)

               
October 25, 2005
  
   
Three Months Ended
    
(Inception) to
  
   
December 31,
    
December 31,
  
   
2009
    
2008
    
2009
  
Expenses:
                  
    Exploration costs
  
$
-
    
$
-
    
$
37,956
  
    General and administrative expenses
    
5,359
      
7,296
      
179,530
  
Total Operating Expenses
    
5,359
      
7,296
      
217,486
  
Net operating loss
    
(5,359
)
    
(7,296
)
    
(217,486
)
                         
Operating Income (Expense)
                        
Interest income
    
21
      
11,131
      
64,950
  
Gain on extinguishment of accounts payable
    
-
      
-
      
5,669
  
Interest expense
    
-
      
-
      
(8,085
)
Total Other Income and Expense
    
21
      
11,131
      
62,534
  
                         
Net Income (Loss)
  
$
(5,338)
    
$
3,834
    
$
(154,952
)
                         
Net Income (Loss) per Common Share - Basic and Diluted
  
$
(0.00
) 
  
$
0.00
          
                         
Per Share Information:
                        
   Weighted  Average Number of Common Stock
                        
   Shares Outstanding - Basic and Diluted
    
6,282,273
      
31,007,548
          
 
 
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 THREE MONTHS ENDED DECEMBER 31, 2009 AND 2008 AND THE PERIOD
FROM OCTOBER 25, 2005 (INCEPTION) THROUGH DECEMBER 31, 2009
 (Unaudited)

               
October 25, 2005
  
   
For Three Months Ended
    
(Inception) to
  
   
December 31,
    
December 31,
  
   
2009
    
2008
    
2009
  
                   
Cash Flows from Operating Activities:
                  
Net Income (Loss)
  
$
(5,338
) 
  
$
3,834
    
$
(154,952
)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
                        
       Stocks issued for services
    
-
      
-
      
45,831
  
       Deprecation
    
-
      
-
      
3,795
  
       Gain on extinguishment of accounts payable
    
-
      
-
      
(5,669
)
       Imputed interest on shareholder advance
    
-
      
-
      
2,711
  
   (Increase) decrease in prepaid expenses
    
549
      
300
      
(1,646
)
   (Increase) in interest receivable
    
-
      
(6,752
) 
    
(33,259
)
   Increase (decrease) in accounts payable
    
1,849
      
3,260
      
8,959
  
                         
Net Cash Flows Provide by (Used by) Operations
    
(2,940
) 
    
642
      
(134,230
)
                         
Cash Flows from Investing Activities:
                        
    Purchase of assets
    
-
      
-
      
(1,795
)
                         
Net Cash Flows Used for Investing Activities
    
-
      
-
      
(1,795
)
                         
Cash Flows from Financing Activities:
                        
   Stocks issued for cash
    
-
      
-
      
3,045,464
  
   Shares Rescinded
    
-
      
(2,400,000
) 
    
(2,400,000
)
   Issuance of note receivable
    
-
      
-
      
(500,000
)
   Repayment for advance from company officer
    
-
      
(99
)
    
(62,200
)
   Advance from company officer
    
18
      
43
      
62,236
  
   
                        
Net Cash Flows (Used in) Provided by Financing Activities
    
18
      
(2,400,056
) 
    
145,500
  
                         
Net Increase (Decrease) in Cash
    
(2,921
)
    
(2,399,414
) 
    
9,475
  
                         
Cash and cash equivalents - Beginning of period
    
12,396
      
2,421,222
      
-
  
                         
Cash and cash equivalents - End of period
  
$
9,475
    
$
21,808
    
$
9,475
  
                         
SUPPLEMENTARY INFORMATION
                        
   Interest Paid
  
$
-
    
$
-
    
$
-
  
   Taxes Paid
  
$
-
    
$
-
    
$
-
  
Supplemental 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 
 
 
SUNRISE HOLDINGS LIMITED
(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 2009 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 2009 annual financial statements have been omitted.

Recently Adopted Accounting Pronouncements

Effective June 30, 2009, the Company adopted a new accounting standard issued by the FASB related to the disclosure requirements of the fair value of the financial instruments. This standard expands the disclosure requirements of fair value (including the methods and significant assumptions used to estimate fair value) of certain financial instruments to interim period financial statements that were previously only required to be disclosed in financial statements for annual periods. In accordance with this standard, the disclosure requirements have been applied on a prospective basis and did not have a material impact on the Company's financial statements.

On September 30, 2009, the Company adopted changes issued by the Financial Accounting Standards Board (FASB) to the authoritative hierarchy of GAAP. These changes establish the FASB Accounting Standards Codification (Codification) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts; instead the FASB will issue Accounting Standards Updates. Accounting Standards Updates will not be authoritative in their own right as they will only serve to update the Codification. These changes and the Codification itself do not change GAAP. Other than the manner in which new accounting guidance is referenced, the adoption of these changes had no impact on the Financial Statements.

Recently Issued Accounting Standards

In August 2009, the FASB issued an amendment to the accounting standards related to the measurement of liabilities that are recognized or disclosed at fair value on a recurring basis. This standard clarifies how a company should measure the fair value of liabilities and that restrictions preventing the transfer of a liability should not be considered as a factor in the measurement of liabilities within the scope of this standard. This standard was effective for the Company on October 1, 2009. The Company does not expect the impact of its adoption to be material to its financial statements.

In October 2009, the FASB issued an amendment to the accounting standards related to the accounting for revenue in arrangements with multiple deliverables including how the arrangement consideration is allocated among delivered and undelivered items of the arrangement. Among the amendments, this standard eliminated the use of the residual method for allocating arrangement considerations and requires an entity to allocate the overall consideration to each deliverable based on an estimated selling price of each individual deliverable in the arrangement in the absence of having vendor-specific objective evidence or other third party evidence of fair value of the undelivered items. This standard also provides further guidance on how to determine a separate unit of accounting in a multiple-deliverable revenue arrangement and expands the disclosure requirements about the judgments made in applying the estimated selling price method and how those judgments affect the timing or amount of revenue recognition. This standard, for which the Company is currently assessing the impact, will become effective for the Company on January 1, 2011.

In October 2009, the FASB issued an amendment to the accounting standards related to certain revenue arrangements that include software elements. This standard clarifies the existing accounting guidance such that tangible products that contain both software and non-software components that function together to deliver the product's essential functionality, shall be excluded from the scope of the software revenue recognition accounting standards. Accordingly, sales of these products may fall within the scope of other revenue recognition standards or may now be within the scope of this standard and may require an allocation of the arrangement consideration for each element of the arrangement. This standard, for which the Company is currently assessing the impact, will become effective for the Company on January 1, 2011.
 
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 $154,952 and has insufficient working capital to meet operating needs for the next twelve months as of December 31, 2009, all of which raise substantial doubt about Sunrise's ability to continue as a going concern.

Note 3 - Related Party Transactions

For the three months ended December 31, 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 4 - Interest Income

For the three months ended December 31, 2009 and 2008, the Company earned $21 and $11,131, respectively, in interest income from cash invested in a money market account.

Note 5 - 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 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 have returned investors in 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 and its accrued interests of $33,128 from SJ Electronics, Inc. to Xuguang Sun and cancelled all the outstanding shares of common stock and stock purchase warrants previously issued to them.

Note 6 - Subsequent Events

There have been no subsequent events since December 31, 2009 through February 1, 2010.
 

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 December 31, 2009, which are included in another section of this document and with our Form 10-K as of September 30, 2009 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 December 31, 2009.

Sunrise is a mining resource company that currently is working to identify and develop projects in Asia. At present, the Company doesn’t own any mining property and has no current operating income.

Results of Operations

Comparison of the three months ended December 31, 2009 and 2008

For the three-month period ended December 31, 2009 compared to the three month period ended December 31, 2008, Sunrise had a net loss of  $5,338 compared to a net income of  $3,834, respectively. This increase was due to a decrease in interest income.

There were no mining exploration costs during the three month period ended December 31, 2009 and the comparable period in 2008 because there was no exploration activity during those periods.  

General and administrative expenses decreased 27% to $5,359 during the three month period ended December 31, 2009 as compared to $7,296 for the comparable period in 2008. This decrease was mainly due to a decrease in professional fees.

Liquidity and Capital Resources

At December 31, 2009, Sunrise had current assets of $11,121, working capital surplus of $7,883, and had $2,940 of net cash used by operations during the three month period ended December 31, 2009.

One current director and officer of the Company, has advanced $18 to pay for costs incurred by the Company during the quarter ended December 31, 2009.


8 
 
 
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 December 31, 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.
 

PART II - OTHER INFORMATION

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

 
10 
 
 

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.

 
     
     February 1, 2010
Sunrise Holdings Limited
 
By:  
/s/ Xuguang Sun
 
 Xuguang Sun, Chief Executive Officer and President