SUN PACIFIC HOLDING CORP. The discussion and analysis of our financial condition and results of operations
are based on our financial statements, which we have prepared in accordance with
accounting principles generally accepted in
As used in this "Management's Discussion and Analysis of Financial Condition and
Results of Operation," except where the context otherwise requires, the term
"we," "us," "our," or "the Company," refers to the business of
Organizational Overview
Utilizing managements history in general contracting, coupled with our subject
matter expertise and intellectual property ("IP") knowledge of solar panels and
other leading-edge technologies,
Our green energy solutions can be customized to meet most enterprise and/or government mandated regulations and advanced system requirements. Our portfolio of products and services allow our clients to select a solution that enables them to establish a viable standard product offering that focuses on the goals of the client's entire organization.
Currently, the Company has five (5) subsidiary holdings.
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As of today, our principal source of revenues is derived from
On
Currently, the Company has been and is insolvent if you factor in the Company's debt obligations. Over its history and to augment the Company's strategy, it has sought out partnerships and other arrangements with professionals and companies at the operating subsidiary level to counter its insolvent state, coupled with the Company's use of debt and equity financings. The Company continues to look for opportunities that will allow it to partner with others in the form of debt and or equity and other contributions at the subsidiary level, and where possible attempt to keep control of at least fifty one percent (51%) of those subsidiaries. While it will also look for the means to correct its insolvent state at the holding company level, given its current negative economic condition, many parties continue to prefer to work with the Company at an operational subsidiary level. The Company is currently exploring other equity and or debt opportunities to correct its overall insolvent state. Although we continue operations through our subsidiary holdings, revenues generated do not fully produce cash flows sufficient to meet our basic capital requirements. In order to meet our reporting requirements, we may have to seek additional capital through debt or equity financing and/or request deferred payment or other in-kind payments for services. Street Smart Outdoor is undercapitalized making expansion of our advertising products highly unlikely or difficult to expand without the use of potential partnerships and or commission only sales representatives. Neither the Company nor Street Smart Outdoor have secured additional financing to support operations. We are attempting to partner or otherwise develop a capital strategy to allow us to grow the outdoor advertising business that includes financing outdoor structures with other parties, in which we arrange financing arrangements, and we continue to look for other professional organizations that we can partner with in expanding our contracts.
Strategic Vision
Our objective is to grow our business profitably as a premier green energy-based provider of both product and services to the public and private sectors. We are working to deploy our strategy in building upon our general and other contracting expertise in conjunction with our intellectual property and subject matter expertise in green energy that may allow us to grow a group of profitable business lines in solar, waste to energy, efficient lighting, and other unique energy related areas.
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Recent advances in a multitude of different yet converging technologies have significantly improved the ability to integrate energy efficient products and solutions into infrastructure related projects. These technological advances decrease the requirements needed to jointly operate a multitude of differing assets, devices, and tools that create new ways to integrate evolving new technologies. This technological change and convergence in energy efficient devices, integrated communications among devices, and societal needs to more effectively and environmentally friendly we believe presents a significant opportunity for us in providing and supporting simple to complex integrated solutions.
Our challenges continue to be reaching critical mass in our solar shelter business and expanding into other green energy related projects. While the Company has never been adequately funded from inception, the Company has attempted to use debt, equity, and other opportunistic in-kind compensation to further the Company's strategic vision.
Going Concern
The Company has an accumulated deficit of
In order to further implement its business plan and satisfy its working capital requirements, the Company will need to raise additional capital. There is no guarantee that the Company will be able to raise additional equity or debt financing at acceptable terms, if at all.
There is no assurance that the Company will ever be profitable. These consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.
Critical Accounting Policies and Estimates
Our significant accounting policies are more fully described in the notes to our consolidated financial statements. Those material accounting estimates that we believe are the most critical to an investor's understanding of our financial results and condition are discussed immediately below and are particularly important to the portrayal of our financial position and results of operations and require the application of significant judgment by our management to determine the appropriate assumptions to be used in the determination of certain estimates.
Use of estimates in the preparation of financial statements
Preparation of financial statements in conformity with accounting principles
generally accepted in
Consolidation
The consolidated financial statements include the accounts of the Company and its wholly owned, and less-than-wholly owned subsidiaries of which the Company holds a controlling interest. All significant intercompany balances and transactions have been eliminated. Amounts attributable to minority interests in the Company's less-than-wholly owned subsidiary are presented as non-controlling interest on the accompanying condensed consolidated balance sheets and statements of operations.
15 Cash and cash equivalents
For purposes of the consolidated statements of cash flows, cash includes demand
deposits and short-term liquid investments with original maturities of three
months or less when purchased. The
Accounts Receivable
In the normal course of business, we decide to extend credit to certain
customers without requiring collateral or other security interests. Management
reviews its accounts receivable at each reporting period to provide for an
allowance against accounts receivable for an amount that could become
uncollectible. This review process may involve the identification of payment
problems with specific customers. Periodically we estimate this allowance based
on the aging of the accounts receivable, historical collection experience, and
other relevant factors, such as changes in the economy and the imposition of
regulatory requirements that can have an impact on the industry. These factors
continuously change and can have an impact on collections and our estimation
process. The Company's allowance for doubtful accounts totaled
Leases
In
The Company, effective
We adopted Topic 842 using a modified retrospective approach for all existing
leases at
Contingencies
Certain conditions may exist as of the date financial statements are issued, which may result in a loss, but which will only be resolved when one or more future events occur or do not occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to pending legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a liability has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable would be disclosed.
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Fair value of financial instruments
The carrying amounts of the Company's accounts payable, accrued expenses, and accrued expenses due to related parties approximate fair value due to their short-term nature. The Company's long-term debt approximates fair value based on prevailing market rates.
Property and equipment
Property and equipment are stated at cost. Additions and improvements that significantly add to the productive capacity or extend the life of an asset are capitalized. Maintenance and repairs are expensed as incurred. Depreciation is computed using the straight-line method over three to five years for vehicles and five to ten years for equipment. Leasehold improvements are amortized over the lesser of the estimated remaining useful life of the asset or the remaining lease term.
Impairment of long-lived assets
The Company periodically reviews for the impairment of long-lived assets
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be realizable. An impairment loss would be recognized when
estimated future cash flows expected to result from the use of the asset and its
eventual disposition is less than its carrying amount. At
Income taxes
Under ASC Topic 740, "Income Taxes", the Company is required to account for its income taxes through the establishment of a deferred tax asset or liability for the recognition of future deductible or taxable amounts and operating loss and tax credit carry forwards. Deferred tax expense or benefit is recognized as a result of timing differences between the recognition of assets and liabilities for book and tax purposes during the year.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are recognized for deductible temporary differences and operating losses, and tax credit carry forwards. A valuation allowance is established to reduce that deferred tax asset if it is "more likely than not" that the related tax benefits will not be realized.
Revenue recognition
100% of the Company's revenue for the years ended
In
2021 2020
Outdoor Advertising Shelter Revenues $ 377,593 $ 252,443
Contracting Service Revenues - 36,585
$ 377,593 $ 289,028
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Earnings Per Share
Under ASC 260, "Earnings Per Share" ("EPS"), the Company provides for the
calculation of basic and diluted earnings per share. Basic EPS includes no
dilution and is computed by dividing income or loss available to common
shareholders by the weighted average number of common shares outstanding for the
period. Diluted EPS reflects the potential dilution of securities that could
share in the earnings or losses of the entity. For the year ended
Net Income Weighted Average Shares Outstanding
Basic $ 2,968,950 974,192,392
Convertible Debt 41,814 142,645,305
Diluted $ 3,010,764 1,116,837,697
Diluted Net Income Per Share
Results of Operations for the Year Ended
Revenues
During the year ended
Cost of Revenues
During the year ended
18 Operating Expenses
During the year ended
Other Expenses
During the year ended
Net Loss from Continuing Operations
As a result of the above, the Company incurred Net Losses from Continuing
Operations of
Liquidity and Capital Resources
Net Working Capital
We have, since inception, financed operations and capital expenditures through the sale of stock and convertible notes and debt. Our immediate sources of liquidity include cash and cash equivalents, accounts receivable, and unbilled receivables.
At
We intend to seek additional financing for our working capital, in the form of equity or debt, to provide us with the necessary capital to accomplish our plan of operation. There can be no assurance that we will be successful in our efforts to raise additional capital.
During the years ended
Generally, the Company has insufficient capital to maintain operations. Cashflows from operations of the Company and all its subsidiary holdings will not sustain the Company's operations, let alone its filing requirements, unless there is substantial influx of cash flow through either debt and/or equity financing.
Cash Flows from Operating Activities
Cash provided by operating activities provides an indication of our ability to generate sufficient cash flow from our recurring business activities. Fixed costs such as labor, direct materials, and office rent represent a significant portion of the Company's continuing operating costs.
For the year ended
For the year ended
19
Cash Flows from Investing Activities
There were no investing activities for the year ended
For the year ended
Cash Flows from Financing Activities
Cash provided by (used in) financing activities provides an indication of our debt financing and proceeds from capital raise transactions.
For the year ended
For the year ended
In the short term, we must raise additional capital through debt or equity financing to support our business operations and grow our business. Over the long term, we must successfully execute our growth plans to increase profitable revenue and income streams to generate positive cash flows to sustain adequate liquidity without impairing growth initiatives or requiring the infusion of additional funds from external sources to meet minimum operating requirements. We may need to raise additional capital to fund our operations and there can be no assurance that additional capital will be available on acceptable terms or at all.
Off-Balance Sheet Arrangements
We have no off-balance sheet financing arrangements.
Contractual Obligations
Not required of smaller reporting companies.
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