SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended September 30, 2000
Commission File Number 0-27283
THE HATHAWAY CORP.
(Exact name of registrant as specified in its corporate charter)
Nevada 11-3499197
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
Route 1 Box 400 Idabel, OK 74745
(Address of principal executive offices)
(580) 245-1003
(Registrant's telephone number, including area code)
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
State the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Class Outstanding as of November 2, 2000
Common Stock 13,545,000
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
<PAGE>
THE HATHAWAY CORP.
[A Development Stage Company]
UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
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THE HATHAWAY CORP.
[A Development Stage Company]
CONTENTS
PAGE
Unaudited Condensed Balance Sheets,
September 30, 2000 and December 31, 1999 2
Unaudited Condensed Statements of Operations,
for the three and nine months ended
September 30, 2000 and 1999 and from
inception on July 9, 1998 through
September 30, 2000 3
Unaudited Condensed Statements of Cash Flows,
for the nine months ended September 30,
2000 and 1999 and from inception on July 9,
1998 through September 30, 2000 4
Notes to Unaudited Condensed Financial
Statements 5 - 8
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THE HATHAWAY CORP.
[A Development Stage Company]
CONDENSED BALANCE SHEETS
[Unaudited]
ASSETS
September 30, December 31,
2000 1999
___________ ___________
CURRENT ASSETS:
Cash held by shareholder $ - $ 6,946
___________ ___________
Total Current Assets $ - $ 6,946
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 950 $ 807
___________ ___________
Total Current Liabilities 950 807
___________ ___________
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.001 par value,
1,000,000 shares authorized,
no shares issued and outstanding - -
Common stock, $.001 par value,
100,000,000 shares authorized,
13,545,000 shares issued and
outstanding 13,545 3,045
Capital in excess of par value 11,290 11,290
Deficit accumulated during the
development stage (25,785) (8,196)
___________ ___________
Total Stockholders' Equity
(Deficit) (950) 6,139
___________ ___________
$ - $ 6,946
___________ ___________
Note: The balance sheet at December 31, 1999 was taken from the
audited financial statements at that date and condensed.
The accompanying notes are an integral part of these unaudited
financial statements.
2
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THE HATHAWAY CORP.
[A Development Stage Company]
CONDENSED STATEMENTS OF OPERATIONS
[Unaudited]
For the Three For the Nine From Inception
Months Ended Months Ended on July 9,
September 30, September 30, 1998 through
______________________________________ September 30,
2000 1999 2000 1999 2000
_________ _________ _________ _________ ______________
REVENUE, net $ - $ - $ - $ - $ -
_________ _________ _________ _________ ______________
EXPENSES:
General and
administrative 11,450 - 11,450 - 11,450
_________ _________ _________ _________ ______________
LOSS FROM
CONTINUING
OPERATIONS
BEFORE
INCOME TAXES (11,450) - (11,450) - (11,450)
CURRENT TAX
EXPENSE - - - - -
DEFERRED TAX
EXPENSE - - - - -
_________ _________ _________ _________ ______________
LOSS FROM
CONTINUING
OPERATIONS (11,450) - (11,450) - (11,450)
_________ _________ _________ _________ ______________
DISCONTINUED
OPERATIONS:
Loss from
discontinued
operations
(net of $0
income taxes) (1,582) (5,499) (6,139) (6,699) (13,335)
Loss on disposal
of discontinued
operations
(net of $0
income taxes) - - - - -
_________ _________ _________ _________ ______________
LOSS FROM DISCONITINUED
OPERATIONS (1,582) (5,499) (6,139) (6,699) (13,335)
_________ _________ _________ _________ ______________
CUMULATIVE EFFECT
OF CHANGE IN
ACCOUNTING
PRINCIPLE - - - (1,000) (1,000)
_________ _________ _________ _________ ______________
NET LOSS $ (13,032)$ (5,449)$ (17,589)$ (7,699)$ (25,785)
_________ _________ _________ _________ ______________
LOSS PER COMMON
SHARE:
Continuing
operations $ (.00)$ - $ (.00) $ - $ (.00)
Discontinued
operations (.00) (.00) (.00) (.00) (.00)
Cumulative
effect of
change in
accounting
principle - - - (.00) (.00)
_________ _________ _________ _________ ______________
Net Loss Per
Common Share $ (.00)$ (.00)$ (.00)$ (.00)$ (.00)
_________ _________ _________ _________ ______________
The accompanying notes are an integral part of these unaudited
financial statements.
3
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THE HATHAWAY CORP.
[A Development Stage Company]
CONDENSED STATEMENTS OF CASH FLOWS
[Unaudited]
For the Nine From Inception
Months Ended on July 9,
September 30, 1998 Through
___________________ September 30,
2000 1999 2000
_________ _________ ____________
Cash Flows From Operating Activities:
Net loss $ (17,589)$ (7,699) $ (25,785)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Non cash expense 10,500 - 10,500
Effect of change in
accounting principle - 1,000 1,000
Change in assets and
liabilities:
Increase in accounts
payable 143 - 950
_________ _________ ____________
Net Cash (Used) by Operating
Activities (6,946) (6,699) (13,335)
_________ _________ ____________
Cash Flows From Investing
Activities - - -
_________ _________ ____________
Net Cash (Used) by
Investing Activities - - -
_________ _________ ____________
Cash Flows From Financing
Activities:
Proceeds from common stock
issuance - 15,000 15,000
Payment of stock offering costs - (1,665) (1,665)
_________ _________ ____________
Net Cash Provided by
Financing Activities - 13,335 13,335
_________ _________ ____________
Net Increase (Decrease) in Cash (6,946) 6,636 -
Cash at Beginning of Period (6,946) - -
_________ _________ ____________
Cash at End of Period $ - $ 6,636 $ -
_________ _________ ____________
Supplemental Disclosures of Cash
Flow Information:
Cash paid during the periods for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing
Activities:
For the nine months ended September 30, 2000:
The Company issued 10,500,000 shares of common stock for
$10,500 in services rendered in lieu of cash.
For the nine months ended September 30, 1999:
None
The accompanying notes are an integral part of these unaudited
financial statements.
4
<PAGE>
THE HATHAWAY CORP.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - The Hathaway Corp. (the Company) was organized
under the laws of the State of Nevada on July 9, 1998, and
intended to develop and operate a handyman business. The
services were to include home repair, light construction,
carpentry, furniture moving, picture and mirror hanging, yard
work, and other related services. However, during July 2000 the
Company discontinued its planned operations and sought a merger
or acquisition with an existing business. During July the
existing shareholders transferred control of the Company with
the issuing 10,500,000 shares of the Company's common stock for
$10,500. The Company plans to provide thoroughbred consultant or
bloodstock agent services. The Company has, at the present time,
not paid any dividends and any dividends that may be paid in the
future will depend upon the financial requirements of the Company
and other relevant factors. The Company has not generated
significant revenues and is considered a development stage
company as defined in Statement of Financial Accounting Standards
(SFAS) No. 7.
Organization Costs - The Company has expensed its organization
costs, which reflect amounts expended to organize the Company, in
accordance with the Financial Accounting Standards Board's
Statement of Position 98-5.
Condensed Financial Statements - The accompanying financial
statements have been prepared by the Company without audit. In
the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows at
September 30, 2000 and 1999 and for the periods then ended have
been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
It is suggested that these condensed financial statements be read
in conjunction with the financial statements and notes thereto
included in the Company's December 31, 1999 audited financial
statements. The results of operations for the periods ended
September 30, 2000 are not necessarily indicative of the
operating results for the full year.
Income Taxes - The Company accounts for income taxes in
accordance with Statement of Financial Accounting Standards
(SFAS) No. 109, "Accounting for Income Taxes." This statement
requires an asset and liability approach for income taxes.
Advertising Costs - The Company expenses its advertising costs as
incurred.
Loss Per Share - The computation of loss per share is based on
the weighted average number of shares outstanding during the
periods presented in accordance with Statement of Financial
Accounting Standards (SFAS) No. 128, "Earnings Per Share". [See
Note 5]
Revenue Recognition - The Company recognizes revenue at the
completion of services performed.
Cash and Cash Equivalents - For purposes of the financial
statements, the Company considers all highly liquid debt
investments purchased with a maturity of three months or less to be
cash equivalents.
Accounting Estimates - The preparation of 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, the disclosures of
contingent assets and liabilities at the date of the financial
statements, and the reported amount of revenues and expenses
during the reported period. Actual results could differ from
those estimated.
5
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THE HATHAWAY CORP.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [CONTINUED]
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 136, "Transfers of Assets to a
not for profit organization or charitable trust that raises or
holds contributions for others", SFAS No. 137, "Accounting
for Derivative Instruments and Hedging Activities - deferral of
the effective date of FASB Statement No. 133 (an amendment of
FASB Statement No. 133.)," SFAS No. 138 "Accounting for Certain
Derivative Instruments and Certain Hedging Activities - and
Amendment of SFAS No. 133", SFAS No. 139, "Rescission of SFAS
No. 53 and Amendment to SFATS No 63, 89 and 21", and SFAS No. 140,
"Accounting to Transfer and Servicing of Financial Assets and
Extinguishment of Liabilities", were recently issued, SFAS No.
136, 137, 138, 139 and 140 have no current applicability to the
Company or their effect on the financial statements would not
have been significant.
NOTE 2 - CAPITAL STOCK
Common Stock - During July 2000, the Company's Board of Directors
approved a three for one forward stock split, which has been
reflected in the accompanying financial statements. The Company
also approved the issuance of 10,500,000 shares of common stock
for services rendered by Kelli Emery effectively changing control
of the Company.
On July 9, 1998, the Company issued 3,000,000 shares of its
previously authorized, but unissued common stock to its attorney
for providing services valued at $1,000 related to organizing the
Company.
In July 1999, the Company issued 45,000 shares of its previously
authorized, but unissued common stock. Total proceeds from the
sale of stock amounted to $15,000 (or $1.00 per share). Offering
costs in the amount of $1,665 have been charged to additional
paid in capital.
On August 15 2000, the Company amended its Articles of
Incorporation increasing the authorized common shares from
25,000,000 to 100,000,000 with a par value of $.001 par value.
NOTE 3 - RELATED PARTY TRANSACTIONS
Professional Services - A shareholder of the Company provides
professional, legal and managerial services to the Company.
Cash - A shareholder holds cash in the amount of $3,962
belonging to the Company in a non-interest-bearing and non-
insured account.
6
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THE HATHAWAY CORP.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 4- INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes". SFAS No. 109 requires the Company to provide
a net deferred tax asset/liability equal to the expected future
tax benefit/expense of temporary reporting differences between
book and tax accounting methods and any available operating loss
or tax credit carryforwards. At September 30, 2000 the Company
has available unused operating loss carryforwards of
approximately $10,300, which may be applied against future
taxable income and which expire in various years through 2020.
The amount of and ultimate realization of the benefits from the
operating loss carryforwards for income tax purposes is
dependent, in part, upon the tax laws in effect, the future
earnings of the Company, and other future events, the effects of
which cannot be determined. Because of the uncertainty
surrounding the realization of the loss carryforwards the Company
has established a valuation allowance equal to the tax effect of
the loss carryforwards and, therefore, no deferred tax asset has
been recognized for the loss carryforwards. The net deferred tax
assets are approximately $3,500 as of September 30, 2000, with an
offsetting valuation allowance at the end of the period of the
same amount resulting in a change in the valuation allowance of
approximately $1,500 for the six months ended September 30, 2000.
NOTE 5 - LOSS PER SHARE
The following data show the amounts used in computing loss per
share for the periods:
For the Three For the Nine From Inception
Months Ended Months Ended on July 9,
September 30, September 30, 1998 through
______________________________________ September 30,
2000 1999 2000 1999 2000
__________ __________ _________ _________ ______________
Loss from
continuing
operations
available to
common
shareholders
(numerator) $ (11,450)$ - $ (11,450)$ - $ (11,450)
__________ __________ _________ _________ ______________
Loss from
discontinued
operations
(numerator) $ (1,582)$ (5,499)$ (6,139)$ (6,699)$ (13,335)
__________ __________ _________ _________ ______________
Cumulative
effect of
change in
accounting
principle
(numerator) $ - $ - $ - $ (1,000)$ (1,000)
__________ __________ _________ _________ ______________
Weighted
average number
Of common
shares
outstanding
used in loss
per share
for the
period
(denominator) 9,803,043 1,010,109 3,965,730 1,003,407 1,007,887
__________ __________ _________ _________ ______________
7
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THE HATHAWAY CORP.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 5 - LOSS PER SHARE [CONTINUED]
Dilutive loss per share was not presented, as the Company had
no common equivalent shares for all periods presented that
would affect the computation of diluted loss per share.
During 1999, the Company adopted Statement of Position 98-5
and accordingly expensed its organization costs of $1,000.
This has been reflected as a cumulative effect of change in
accounting principle.
NOTE 6 - GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles,
which contemplate continuation of the Company as a going
concern. However, the Company has incurred losses since its
inception, and has not yet been successful in establishing
profitable operations. These factors raise substantial doubt
about the ability of the Company to continue as a going
concern. In this regard, management is proposing to raise any
necessary additional funds not provided by operations through
loans and/or through additional sales of its common stock.
There is no assurance that the Company will be successful in
raising this additional capital or in achieving profitable
operations. The financial statements do not include any
adjustments that might result from the outcome of these
uncertainties.
NOTE 7 - DISCONTINUED OPERATIONS
During July 2000, The Company management decided to abandon
the Company's original business plan of developing and
operating a handyman business, services to include home
repair, light construction, carpentry, furniture moving,
picture and mirror hanging, yard work, and other related
services, and is currently seeking new business opportunities
or a merger or acquisition with an existing business.
The following is a condensed proforma statement of operations
that reflects what the presentation would have been for the
periods ended September 30, 2000 and 1999 and from inception
on July 9, 1998 through September 30, 2000 if the Company had not
discontinued it's previous operations:
For the Nine From Inception
Months Ended on July 9,
September 30, 1998 Through
___________________ September 30,
2000 1999 2000
_________ _________ ____________
NET REVENUE $ - $ - $ 310
OTHER OPERATION EXPENSES (17,589) (6,699) (25,095)
OTHER INCOME (EXPENSE) - - -
PROVISION FOR INCOME TAXES - - -
CHANGE IN ACCOUNTING PRINCIPLE - (1,000) (1,000)
_________ _________ ____________
NET LOSS $ (17,589)$ (7,699) $ (25,785)
_________ _________ ____________
LOSS PER COMMON SHARE: $ (.00)$ (.00) $ (.00)
_________ _________ ____________
8
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of
Operation.
The Hathaway Corp. is a company in the startup phase;
it was primarily engaged in the business of performing handyman-
type services for private homeowners and businesses. Its first
advertisements yielded a large number of responses, but only $310
in actual income. The Company believed that additional
advertising in a larger number of local papers might yield more
business. The results of these advertisements proved
unsuccessful. At such time, Management decided to abandon the
Company's original business plan and seek a merger or acquisition
with an existing business.
The Hathaway Corp. (herein, the "Issuer", the "Registrant"
or the "Company") conducted an offering of its securities
pursuant to Regulation D, Rule 504 during July 1999. The Issuer's
initial business plan involved performing services for households
and businesses in the handyman area, including the moving of
furniture, interior and exterior painting, construction of
bookcases, etc. After numerous advertisements to secure new
business proved unsuccessful the Board met and re-examined its
options and decided that the Company must either pursue another
business or a merger or acquisition with another on going
business; In July 2000, pursuant to a meeting of the Board, the
Company issued 10,500,000 shares of the Company's common stock to
Kelli Emery, for services rendered valued at $10,500, giving her
control of the Company, appointed her the President and Director
and resigned as Officers and Directors of the Company. At this
point, the newly appointed Officer and Director continued
development of the Company's new Business Plan.
Plan of Operation
The Company has assembled an experienced team that has
demonstrated the ability to customize its thoroughbred consultant
or bloodstock agent services to a client's needs and serve
customers cost effectively. The Company has developed and refined
the processes and procedures to provide thoroughbred consultant
or bloodstock agent services.
The Company's new headquarters are located in Idabel,
Oklahoma. The location of the headquarters will allow the Company
the opportunity to be a major part of the industry. The Company
will also closely monitor additional markets that can be cost
effectively and successfully entered. The Company is currently
seeking to expand and move its base of operations to Kentucky,
which is considered the heart of the thoroughbred industry.
Adding staff and additional geographic markets can increase
revenues and opportunities. The Company's growth plan involves
leveraging current management, organization and infrastructure
assets to build a large client base. In addition
9
<PAGE>
to the customer base providing substantial sales margins, the
opportunity exists to cross-sell additional products and
services related to thoroughbreds in the future at low cost.
The Company is ideally placed to assist clients in their
continual quest to find the right horse, whether at public
auction or privately. The Company will buy, sell, ship and manage
its clients' bloodstock interests, be they foals, yearlings,
horses in training, stallions or broodmares.
Buying, selling, breeding, training and racing horses are
all very different yet integrated functions of the overall
thoroughbred industry. There is more to a good thoroughbred
consultant or bloodstock agent, than being an intermediary
during a transaction. The Company, as would be expected of true
bloodstock professionals, will perform many functions for our
clients, ranging from assisting clients with identifying the
right racehorses that fit their individual needs, advising
clients on what actions to take to fulfill their particular
thoroughbred related ambitions, helping clients with the various
training functions, answering clients' questions on specifics
such as the characteristics of certain horses, their history and
pedigree, and much more. The Company has a no-nonsense and
straightforward approach to servicing its clients, and it
encompasses assisting clients through all steps of racehorse
ownership, breeding and management.
Forward-Looking Statements
When used in this Form 10-Q or other filings by the Company
with the Securities and Exchange Commission, in the Company's
press releases or other public or shareholder communications, or
in oral statements made with the approval of an authorized
officer of the Company's executive officers, the words or phrases
"would be", "will allow", "intends to", "will likely result",
"are expected to", "will continue", "is anticipated", "estimate",
"project", or similar expressions are intended to identify
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995.
The Company cautions readers not to place undue reliance on
any forward-looking statements, which speak only as of the date
made, and advises readers that forward-looking statements involve
various risks and uncertainties. The Company does not undertake,
and specifically disclaims any obligation to update any forward-
looking statements to reflect occurrences or unanticipated events
or circumstances after the date of such statement.
10
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities and Use of Proceeds.
On July 31, 2000, pursuant to a meeting of the Board of
Directors the Company authorized a Three (3) for One (1) forward
split of its common stock, the Board also authorized the issuance
of Ten Million Five Hundred Thousand (10,500,000) post split
shares of the Company's common stock to its new President and
Director, for services provided, therefore increasing the issued
and outstanding shares from One Million Fifteen Thousand
(1,015,000) shares to Thirteen Million Five Hundred Forty Five
Thousand (13,545,000) shares
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to Vote of Security holders.
None.
Item 5. Other Information.
The Company is filing this report to inform shareholders of the
change in control that has occurred.
Change in Control of Registrant.
On July 31, 2000, pursuant to a meeting of the Board of
Directors the Company authorized a Three (3) for One (1) forward
split of its common stock so that the current issued and
outstanding shares are increased from 1,015,000 shares to
3,045,000 shares, the Board also authorized the issuance of Ten
Million Five Hundred Thousand post split shares of the Company's
treasury stock to Kelli Emery ("Emery") for services rendered,
therefore transferring control of the Company to Kelli Emery and
resulting in Emery's ownership of 77.5% of the issued and
outstanding shares of the Company. The Company also accepted the
resignations of Dzidedi Ofori ("Ofori") as the President,
Director and Robert Capezzano ("Capezzano"), as the Secretary-
Treasurer, Director and appointed Kelli Emery as the Company's
sole Officer and Director.
11
<PAGE>
Security Ownership of Management
Name Title Class No. of Shares Percent
Kelli Emery President, Director Common 10,500,000 77.5
MANAGEMENT
The following is a brief Bio of the officer, director and
key employee of the Company as of the date hereof:
Name Age Position
Kelli Emery 35 President and Director
Kelli Emery is in the business of racing, breeding, buying and
selling of Thoroughbred racing horses. She has been in this
industry for the last three years. Ms. Emery deals only with the
most high bloodline horses such as: Native Dancer, Secretariat,
Unbridled, Lost Code, and Risen Dancer etc. She currently has
ownership in 38 Thoroughbreds. Her race horses are currently
ready to be run at tracks such as Churchhill Downs, Turfway and
Ellis Park to name a few.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits - None
(b) Reports on Form 8-K - None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant has caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized.
THE HATHAWAY CORP.
By: /s/ Kelli Emery .
Kelli Emery, Pres.
Date: November 2, 2000
12
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