10-Q 1 a6023699.txt SUNSHINE PCS CORPORATION 10-Q ================================================================================ UNITED STATES SECRITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q --------- (Mark One) (X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2009 ( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from _____________ to _______________ Commission file number 333-50948 --------- Sunshine PCS Corporation ------------------------ (Exact name of small business issuer as specified in its charter) Delaware 30-0076986 -------- ---------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 65 Highland Road, Rye New York 10580 ------------------------------------ (Address of principal executive offices) (701) 924-1000 -------------- (Issuer's telephone number) -------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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. [X] Yes [ ] No 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 the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X] (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [X] Yes [ ] No State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practical date. Class Outstanding at July 30, 2009 ----- ---------------------------- Common Stock 4,588,653 ================================================================================ SUNSHINE PCS CORPORATION ------------------------ PART I FINANCIAL INFORMATION ------------------------------ Item 1 . Unaudited Financial Statements Condensed Balance Sheets as of June 30, 2009 and December 31, 2008 Condensed Statements of Operations for the Three and Six months ended June 30, 2009 and 2008 Condensed Statements of Cash Flows for the Six months ended June 30, 2009 and 2008 Notes to Condensed Financial Statements as of June 30, 2009 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Item 3. Quantitative and Qualitative Analysis of Market Risk Item 4. Controls and Procedures PART II. OTHER INFORMATION -------------------------- Item 6. Exhibits and Reports SIGNATURES ---------- Item 1. Financial Statements Sunshine PCS Corporation Condensed Balance Sheets (Unaudited)

See accompanying notes to financial statements. 1 Sunshine PCS Corporation Condensed Statements of Operations (Unaudited)

See accompanying notes to financial statements. 2 Sunshine PCS Corporation Condensed Statements of Cash Flows (Unaudited)

See accompanying notes to financial statements. 3 Sunshine PCS Corporation Notes to Financial Statements June 30, 2009 Note - 1 Organization --------------------- Sunshine PCS Corporation was incorporated in the state of Delaware on July 13, 2000. Prior to December 31, 2003, the Company was in the business of developing three personal communications services (PCS) licenses in Florida. At that date the Company sold all of the licenses to Cingular Wireless LLC ("Cingular") for total net proceeds of $13.6 million, and during 2004 disposed of all equipment and wound down our Florida operations. Since the sale of the PCS licenses and wind down of the Florida operations, the Company has no appreciable operations other than maintenance status as a public company and, therefore is no longer in the development stage. The Company is currently evaluating all options available to us at this time. We filed a preliminary proxy with the Securities and Exchange Commission on May 14, 2009 to effect a reverse stock split. Under the proposals in this preliminary proxy statement, the Company's stockholders are being asked to approve the Company's ability to implement a 1 for 1,000 reverse stock split and to give the Company continuing authority to purchase shares in order limit the number of stockholders to fewer than 300. In addition, the preliminary proxy described a potential transaction whereby the Company would acquire Inter-Community Telephone Company, LLC, a North Dakota limited liability company, and Valley Communications, Inc., through a merger in which approximately 158,000 shares of the Company's Common Stock (on a post-reverse stock split basis) would be issued to LICT Corporation ("LICT"). As a result of such a merger, the Company would be approximately 97% owned by LICT, or a wholly-owned subsidiary thereof. No merger agreement has been drafted, no negotiation has taken place and no more specific terms have been determined. The potential merger remains subject to the negotiation of definitive terms and the approval of both the Company's and LICT's boards of directors. Note - 2 Basis of Presentation ------------------------------ The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and to the instructions to Form 10-Q and Article 8 to Regulation S-X. Accordingly, they are not audited and do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended June 30, 2009 are not necessarily indicative of the results that may be expected for the year ending December 31, 2009. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Recently Issued Accounting Pronouncements In May, 2008, the Financial Accounting Standards Board ("FASB") issued FASB Statement No. 162. "The Hierarchy of Generally Accepted Accounting Principles." FASB Statement No.162 identifies the sources for accounting principles and the framework for selecting the principles used in the preparation of financial statements that are presented in conformity with generally accepted accounting principles ("GAAP") in the United States. The statement is effective for financial statements issued for interim and annual periods ending after September 15, 2009. This statement is not expected to affect the Company's financial statements. 4 Note - 3 Income Taxes --------------------- During the three and six months ended June 30, 2009, the Company recorded a combined federal and state tax benefit of approximately $16,422 and $34,115 respectively. The Company recorded a valuation allowance for such benefit as the realization of such assets is dependent upon the generation of future taxable income during a period when such losses would be utilized, which is not anticipated to occur at this time. Pursuant to Sections 382 and 383 of the Internal Revenue Code, annual use of any of the Company's net operation loss and credit carry forwards may be limited if cumulative changes in ownership of more than 50% occur during any three year period. Note - 4 Commitments and Contingencies -------------------------------------- The Company has no commitments and no contingencies. Item 2. Management's Discussion and Analysis of Financial Condition and Plan of -------------------------------------------------------------------------------- Operations. ----------- Overview Included in this Management Discussion and Analysis of Financial Condition and Results of Operations are certain forward looking financial and other information, including without limitation, the Company's Liquidity and Capital Resources and reference to its preliminary proxy statement filed with the Securities and Exchange Commission on May 14, 2009. It should be recognized that such information are estimates or forecasts based upon various assumptions, including the matters, risks, and cautionary statements referred to therein. As a result, such information is subject to uncertainties, risks and inaccuracies, which could be material. Results of Operations During the three months ended June 30, 2009, our net loss was $52,039 as compared to net loss of $14,291 for the three months ended June 30, 2008. For the six months ended June 30, 2009 our net loss was $100,338 as compared to a net loss of $24,508 for the six months ended June 30, 2008. During the three months ended June 30, 2009, the Company recorded $192 of interest income as compared to $2,327 for the three months ended June 30, 2008. For the six months ended June 30, 2009 and 2008, interest income was $602 and $ $6,243 respectively. The decline in interest income for both periods was the result of lower interest rates in the Company investments in the United States Treasury Securities and lower average investment balances. Professional fees were $40,147 for the three months ended June 30, 2009 as compared to $5,618 for the three months ended June 30, 2008. For the six months ended June 30, 2009, professional fees were $77,566 and $10,618 incurred during the six months ended June 30, 2008. The primary reason for the increase in Professional Fees were legal and accounting fees incurred in connection with the preparation of our preliminary proxy statement which was filed with the Securities and Exchange Commission on May 14, 2009 on Schedule 14A. General and administration expenses were $12,084 during the three months ended June 30, 2009 as compared to $11,000 recorded during the three-month period ended June 30, 2008. For the six months ended June 30, 2009 and June 30, 2008, general and administrative expenses were $23,374 and $20,133 respectively. The increase is the result of travel expenses incurred by one our member of our Board of Directors. 5 Liquidity and Capital Resources As of June 30, 2009, the Company's primary asset was $320,329 in cash as compared to $442,026 at December 31, 2008. During year 2009 and subject to the outcome of the shareholder proposals included in the preliminary proxy statements that were filed with Securities and Exchange Commission on May 14, and July 24, 2009, the Company expects to pay about $75,000 in costs and expenses. These costs do not include the costs incurred in connection with that proxy statement, estimated at $97,000, or any other unusual transactions that may incur during the year. Off Balance Sheet Arrangements None Item 3. Quantitative and Qualitative Analysis of Market Risk -------------------------------------------------------------- The Company is a smaller reporting company and is not required to provide the information required by this Item. Item 4. Controls and Procedures -------------------------------- (a) Evaluation of Disclosure Controls and Procedures Our Chief Executive Officer and Principal Financial Officer have evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the "Act")) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Principal Financial Officer have concluded that the Company's disclosure controls and procedures as of the end of the period covered by this report were designed and were functioning effectively to provide reasonable assurance that the information required to be disclosed by the Company in reports filed under the Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. The Company believes that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. (b) Changes in Internal Controls During the period covered by this report, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our financial statements. 6 PART II. OTHER INFORMATION ---------------------------- Item 6. Exhibits and Reports ----------------------------- Exhibit 31.1 - Chief Executive Officer Rule 15d-14(a) Certification. Exhibit 31.2 - Principal Financial Officer Rule 15d-14(a) Certification. Exhibit 32.1 - Chief Executive Officer Section 1350 Certification. Exhibit 32.2 - Principal Financial Officer Section 1350 Certification. 7 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York on the 5th of August 2009. SUNSHINE PCS CORPORATION By: /s/ David S. Ahl ------------------------------------ David S. Ahl Chief Executive Officer 8

SUNSHINE PCS CORP 10-Q