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
September 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
Commission file number 0-26421
FORESTAY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 52-2175692
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1504 R Street, N.W., Washington, D.C. 20009
(Address of principal executive offices (zip code))
202/387-5400
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the last 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
Indicate the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.
Class Outstanding at September 30, 1999
Common Stock, par value $0.0001 5,000,000
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FORESTAY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Balance Sheet
September 30, 1999
(Unaudited)
ASSETS
Cash $ 500
TOTAL ASSETS $ 500
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES $ -
STOCKHOLDER'S EQUITY
Preferred Stock, $.0001 par value, 20 million
shares authorized, zero issued and outstanding -
Common Stock, $.0001 par value, 100 million
shares authorized, 5,000,000 issued
and outstanding 500
Additional paid-in capital 4,830
Deficit accumulated during development stage (4,830)
Total Stockholder's Equity 500
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 500
See accompanying notes to financial statements.
FORESTAY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
September 30, 1999
(unauditd)
Income $ -
Expenses
Executive services contributed by president 3,500
Organization expense 580
Professional fees 750
Total expenses 4,830
NET LOSS $ (4,830)
See accompanying notes to financial statements.
FORESTAY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN
STOCKHOLDER'S EQUITY
Ended September 30, 1999
(unaudited)
Deficit
Additional Accumulated
Common Paid-In During Devel-
Stock Capital opment Stage Total
Common stock issuance $ 500 $ - $ - $ 500
Fair value of services
and expenses contributed - 4,830 - 4,830
Net loss for the period
ended September 30, 1999 - - (4,830) (4,830)
BALANCE AT SEP 30, 1999 $ 500 $ 4,830 $ (4,830) $ 500
FORESTAY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
September 30, 1999
(unaudited)
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss $ (4,830)
Adjustment to reconcile net loss
to net cash used by operating activities:
Capitalized services and expenses 4,830
Net cash used in operating activities -
CASH FLOWS FROM INVESTING ACTIVITIES -
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 500
Net cash provided by financing activities 500
INCREASE IN CASH AND CASH EQUIVALENTS 500
CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD -
CASH AND CASH EQUIVALENTS END OF PERIOD $ 500
See accompanying notes to financial statements.
FORESTAY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Organization and Business Operations
Forestay Corporation (a development stage company) ("the Company")
was incorporated in Delaware on June 7, 1999 to serve as a vehicle to
effect a merger, exchange of capital stock, asset acquisition or
other business combination with a domestic or foreign private
business.
The Company's ability to commence operations is contingent upon its
ability to identify a prospective target business and raise the
capital it will require through the issuance of equity securities,
debt securities, bank borrowings or a combination thereof.
B. Use of Estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
C. Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers
all highly liquid investments purchased with an original maturity of
three months or less to be cash equivalents.
D. Income Taxes
The Company accounts for income taxes under the Financial Accounting
Standards Board of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("Statement 109"). Under Statement 109,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax basis. 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. Under Statement 109, the effect on deferred
tax assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date. There were no
current or deferred income tax expense or benefits due to the Company
not having any material operations for the period ending June 7, 1999.
NOTE 2 - STOCKHOLDER'S EQUITY
A. Preferred Stock
The Company is authorized to issue 20,000,000 shares of preferred
stock at $.0001 par value, with such designations, voting and other
rights and preferences as may be determined from time to time by the
Board of Directors.
B. Common Stock
The Company is authorized to issue 100,000,000 shares of common stock
at $.0001 par value. The Company issued 5,000,000 shares of its
common stock to TPG Capital Corporation pursuant to Rule 506 for an
aggregate consideration of $500.
C. Additional Paid-In Capital
Additional paid-in capital represents the fair value
of services contributed to the Company by its president and the
amount of organization and professional costs incurred by TPG Capital
on behalf of the Company. (See Note 3)
NOTE 3 AGREEMENT
On June 7, 1999, the Company signed an agreement with TPG Capital
Corporation (TPG), a related entity (See Note 4). The Agreement
calls for TPG to provide the following services, without
reimbursement from the Company, until the Company enters into a
business combination as described in Note 1A
1. Preparation and filing of required documents with the
Securities and Exchange Commssion;
2. Location and review of potential target companies;
3. Payment of all corporate, organizational, and other costs
incurred by the Company.
NOTE 4 - RELATED PARTIES
Legal counsel to the Company is a firm owned by a director of the
Company who also owns a controlling interest in the outstanding stock
of TPG Capital Corporation. (See Note 3)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company has registered its common stock on a Form 10-SB
registration statement filed pursuant to the Securities Exchange Act of
1934 (the "Exchange Act") and Rule 12(g) thereof. The Company files with
the Securities and Exchange Commission periodic and episodic reports under
Rule 13(a) of the Exchange Act, including quarterly reports on Form 10-QSB
and annual reports Form 10-KSB. As a reporting company under the Exchange
Act, the Company may register additional securities on Form S-8 (provided
that it is then in compliance with the reporting requirements of the
Exchange Act) and on Form S-3 (provided that is has during the prior 12
month period timely filed all reports required under the Exchange Act).
The Company was formed to engage in a merger with or acquisition of an
unidentified foreign or domestic private company which desires to become a
reporting company whose securities have been registered under
the Exchange Act. The Company may be deemed to meet the definition of a
"blank check" company contained in Section (7)(b)(3) of the Securities Act
of 1933, as amended.
Management believes that there are perceived benefits to being a
reporting company which may be attractive to foreign and domestic
private companies.
These benefits are commonly thought to include
(1) the ability to use securities to make acquisition of assets or
businesses;
(2) increased visibility in the financial community;
(3) the facilitation of borrowing from financial institutions;
(4) improved trading efficiency;
(5) the potential for shareholder liquidity;
(6) greater ease in subsequently raising capital;
(7) compensation of key employees through options for stock
for which there may be a public market;
(8) enhanced corporate image; and,
(9) a presence in the United States capital market.
A private company which may be interested in a business combination
with the Company may include
(1) a company for which a primary purpose of becoming a reporting
company is the use of its securities for the acquisition of
assets or businesses;
(2) a company which is unable to find an underwriter of its securities
or is unable to find an underwriter of securities on terms
acceptable to it;
(3) a company which wishes to become a reporting company with less
dilution of its common stock than would occur normally upon an
underwriting;
(4) a company which believes that it will be able obtain
investment capital on more favorable terms after it has become
a reporting company;
(5) a foreign company which may wish an initial entry into the
United States securities market;
(6) a special situation company, such as a company seeking to satisfy
redemption requirements under a qualified Employee Stock Option
Plan; and,
(7) a company seeking one or more of the other benefits believed to
attach to a reporting company.
Management is actively engaged in seeking a qualified private company
as a candidate for a business combination. The Company is
authorized to enter into a definitive agreement with a wide variety of
private businesses without limitation as to their industry or revenues. It
is not possible at this time to predict with which private company, if any,
the Company will enter into a definitive agreement or what will be the
industry, operating history, revenues, future prospects or other
characteristics of that company.
As of the date hereof, management has not made any final decision
concerning or entered into any agreements for a business combination. When
any such agreement is reached or other material fact occurs, the Company
will file notice of such agreement or fact with the Securities and Exchange
Commission on Form 8-K. Persons reading this Form 10-QSB are advised to
see if the Company has subsequently filed a Form 8-K.
The current shareholders of the Company have agreed not to sell or
otherwise transfer any of their common stock of the Company except in
connection with a business combination.
The Company does not intend to trade its securities in the secondary
market until completion of a business combination. It is anticipated that
following such occurrence the Company will take the steps required
to cause its common stock to be admitted to quotation on the
NASD OTC Bulletin Board or, if it then meets the financial and other
requirements thereof, on the Nasdaq SmallCap Market, National Market System
or regional or national exchange.
COMPUTER SYSTEMS REDESIGNED FOR YEAR 2000
Many existing computer programs use only two digits to identify a year
in such program's date field. These programs were designed and developed
without consideration of the impact of the change in the century for
which four digits will be required to accurately report the date. If not
corrected, many computer applications could fail or create erroneous results
by or following the year 2000 ("Year 2000 Problem"). Many of the computer
programs containing such date language problems have not been corrected by
the companies or governments operating such programs. The Company does not
have operations and does not maintain computer systems. However, it is
impossible to predict what computer programs will be effected, the impact
any such computer disruption will have on other industries or commerce or the
severity or duration of a computer disruption.
Before the company enters into any business combination, it will inquire
as to the status of any target company's Year 2000 Problem, the steps such
target company has taken to correct any such problem and the probable impact
on such target company of any computer disruption. However, there can be
no assurance that the Company will not combine with a target company that
has an uncorrected Year 2000 Problem or that any such Year 2000 Problem
corrections are sufficient. The extent of the Year 2000 Problem of a
target company may be impossible to ascertain and its impact on the
Company is impossible to predict.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no legal proceedings against the Company and the Company is
unaware of such proceedings contemplated against it.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 4
-- Certificate of Incorporation filed as an exhibit to the Company's
registration statement on Form 10-SB (File No. 0-26421) filed on
June 17, 1999 and is incorporated herein by reference.
-- By-Laws filed as an exhibit to the Company's registration
statement on Form 10-SB (File No. 0-26421) filed on June 17, 1999
which is incorporated herein by reference.
-- Lock up agreement filed as an exhibit to amendment no. 1 to
the Company's registration statement on Form 10-SB
(File No. 0-26421) filed on June 17, 1999 which is
incorporated herein by reference.
-- Agreement with TPG Capital Corporation filed as an exhibit to
amendment no. 1 to the Company's registration statement on Form
10-SB (File No. 0-26421) filed on June 17, 1999 which is
incoprorated herein by reference.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed by the Company during the
quarter.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
FORESTAY CORPORATION
By: /s/ James M. Cassidy
James M. Cassidy, President
Dated: November 12, 1999
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