U.S. Securities and Exchange Commission
Washington, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission File No. 0-23498
GRAYSTONE WORLD WIDE, INC.
---------------------------------------------
(Name of Small Business Issuer in its Charter)
DELAWARE 33-0601487
------------------------------- --------------------
(State or Other Jurisdiction of (IRS Employer ID No.)
incorporation or organization)
68 South Main Street, Suite #600
Salt Lake City, Utah 84101
---------------------------------------
(Address of Principal Executive Offices)
(801) 355-5826
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(Issuer's Telephone Number, including Area Code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 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.
(1) Yes X No (2) Yes X No
There were 18,267,000 shares of common stock, $.001 par value, outstanding
as of November 29, 1999.
Part I. FINANCIAL INFORMATION
The Financial Statements of the Company required to be filed with
this 10-QSB Quarterly Report were prepared by management and commence on the
following page, together with related Notes. In the opinion of management,
the Financial Statements fairly present the financial condition of the
Company.
Item 1. Financial Statements
<TABLE>
GRAYSTONE WORLD WIDE, INC.
Formerly Achiote Corporation
(A Development Stage Company)
Balance Sheets
<CAPTION>
June 30, June 30,
1999 1998
<S> <C> <C>
ASSETS
Current assets
Cash $ - $ 65,439
Inventory - 331,602
Other current assets - 1,500
Total current assets - 398,541
Furniture and fixtures, less
accumulated depreciation of $1593 and $177 9,806 7,477
Other assets
Organization costs, net of accumulated
amortization of $286 and $286 - -
Total assets $ 9,806 $ 406,018
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities -
accounts payable and accrued liabilities $ 203,163 $ 677
Related Party Note Payable 400,000 -
Stockholders' equity
Preferred stock, $.001 par value; 1,000,000
shares authorized; no shares issued and
outstanding - -
Common stock, $.001 par value; 20,000,000
shares authorized; 16,807,000 shares and
14,682,360 shares issued and outstanding 16,807 14,682
Additional paid-in capital 562,193 457,868
Accumulated deficit during the development
stage (1,172,357) (67,209)
Total stockholders' equity (593,357) 405,341
Total liabilities and stockholders'
equity $ 9,806 $ 406,018
</TABLE>
See accompanying notes to financial statements
<PAGE>
<TABLE>
GRAYSTONE WORLD WIDE, INC.
Formerly Achiote Corporation
(A Development Stage Company)
Statements of Operations
<CAPTION>
Cumulative
From
For the three Inception
months ended (May 4, 1992)
June 30, to June 30,
1999 1998 1999
<S> <C> <C> <C>
Revenues $ - $ - $ -
Operating expenses
General and administrative 28,892 56,685 1,094,547
Depreciation 502 277 1,879
Amortization - - 286
Interest 9,500 - 75,645
Total operating expenses 38,894 56,962 (1,172,357)
Net (loss) $ (38,894) $ (56,962)$(1,172,357)
Net (loss) per share $ (.002) $ (.004)
Weighted average number of
shares outstanding 15,807,600 14,682,360
</TABLE>
See accompanying notes to financial statements
<TABLE>
GRAYSTONE WORLD WIDE, INC.
Formerly Achiote Corporation
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
April 1, 1995 Through June 30, 1999
<CAPTION>
Accumulated
Deficit
Common Stock Additional During the
Paid-In Development
Shares Amount Capital Stage Total
<S> <C> <C> <C> <C> <C>
Balance, April 1, 1995 1,160,200 $ 1,160 $ 1,042 $(1,554) $ 648
Retroactively Restated
Net (loss) - - - (430) (430)
Balance, March 31, 1996 1,160,200 $ 1,160 $ 1,042 $(1,984) $ 218
Net (loss) - - - (212) (212)
Balance, March 31, 1997 1,160,200 1,160 1,042 (2,196) 6
Shares issued to acquire 100%
of the outstanding shares of
Graystone World Wide, Inc.12,787,100 12,787 (12,787) - -
Shares issued for services
$0.01 per share 734,700 735 6,613 (7,348) -
Contribution to capital - - 1,000 - 1,000
Net (loss) - - - (703) (703)
Balance, March 31, 1998 14,682,000 $14,682 $(4,132) $(10,247) $ 303
Shares issued for
Cash 100,000 100 299,900 - 300,000
Services 25,000 25 76,525 - 76,550
Net (loss) - - - (1,123,216)(1,123,216)
Balance, March 31, 1999 14,807,000 14,807 372,293 (1,133,463) (746,363)
Shares issued for debt 2,000,000 2,000 189,900 191,900
Net (loss) (38,894) (38,894)
Balance, June 30, 1999 16,807,000 $16,807 $562,193$(1,172,357) $(593,357)
</TABLE>
See accompanying notes to financial statements
<TABLE>
GRAYSTONE WORLD WIDE, INC.
Formerly Achiote Corporation
(A Development Stage Company)
Statements of Cash Flows
<CAPTION>
Cumulative
From
For the three Inception
months ended (May 4, 1992)
June 30, to June 30,
1999 1998 1999
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net (loss) $ (38,894) $ (56,962) $ (1,172,357)
Add item not requiring the use of cash
Amortization - - 286
Depreciation 502 277 1,879
Common stock issued for services - - 83,898
Increase in inventory - (331,602) -
Increase in other current assets - (1,500) -
Increase in accounts payable
and accrued liabilities 20,597 - 203,163
Net cash flows from operating
activities (17,795) (389,787) (883,131)
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchases of furniture and fixtures - (7,754) (11,399)
Organization costs - - (286)
Net cash flows from investing
activities - (7,754) (11,685)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from related party notes
payable (174,043) - 400,000
Issuance of common stock 191,900 462,000 494,816
Contribution to capital - - -
Sale of common stock - - -
Net cash flows from financing
activities 17,857 462,000 894,816
Net increase in cash 62 64,459 -
Cash balance at beginning of period (62) 980 -
Cash balance at end of period $ 0 $ 65,439 $ -
</TABLE>
See accompanying notes to financial statements
GRAYSTONE WORLD WIDE, INC.
Formerly Achiote Corporation
(A Development Stage Company)
Notes to Financial Statements
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Graystone World Wide, Inc. (the "Company" or "Graystone") was incorporated
under the laws of the State of Nevada on January 18, 1998. The stated purpose
of the Company was to engage without qualification, in any lawful acts, or
activity for which a corporation may be organized under the laws of the state
of Nevada. Achiote Corporation was incorporated under the laws of the State
of Delaware on May 4, 1992, for the purpose of seeking out business
opportunities, including acquisitions.
On March 20, 1998, the Company entered into an Agreement and Plan of
Reorganization with Achiote Corporation, wherein it was agreed that Graystone
World Wide, Inc. (a Nevada corporation) would issue 12,787,398 shares of its
common stock to acquire 100% of the issued and outstanding shares of stock of
Achiote Corporation (a Deleware Corporation).
Prior to the reorganization, the sole director of Achiote Corporation
exercised his right to covert amounts owed by Achiote into 155,000 shares of
common stock. Also, prior to the reorganization, Achiote forward split its
outstanding shares 2 shares for 1 on March 20, 1998. As a consequence of this
action, Achiote Corporation had 1,160,200 shares issued and outstanding prior
to the Agreement and Plan of Reorganization in which Achiote Corporation was
acquired.
Method of Accounting
The Company uses the accrual method of accounting.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity
of three months or less to be cash equivalents.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles 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.
2. INCOME TAXES
The fiscal year end of the Company is March 31st and an income tax return
has not been filed. However, if an income tax return had been filed, the
Company would have a net operating loss carry forward of $10,247 that would
begin expiring in the year 2009.
3. SUBSEQUENT EVENT
In July 1998, 100,000 "unregistered" and "restricted" shares of common stock
were sold for $300,000 to an accredited investor.
Item 2. Management's Discussion and Analysis and Plan of Operations.
Plan of Operation.
- ------------------
Graystone is presently a start-up company, which commenced operations on
or about March 24, 1998, following the acquisition of Graystone Nevada, which
was organized in 1998. It has limited footwear assets; however, it has no
history of operations and has had no revenues.
In order to commence planned operations of manufacturing and marketing of
footwear and shoe products, Graystone will be required to raise approximately
$2,000,000 in debt or equity financing. No assurance can be given that it
will be successful in this respect.
Funds raised for this purpose will be utilized as working capital to
purchase the necessary equipment and supplies to engage in contemplated
operations, and to produce literature for marketing to potential clients.
Management believes that $2,000,000 will be sufficient operating capital
for the first six months of planned operations, at a maximum level, and for 18
months at a modest level.
Without any funding, Graystone will be unable to commence planned
operations.
Results of Operations
- ---------------------
Revenues for the quarter ended June 30, 1999 were $0.
The Company had a net loss of ($38,894) for the quarter ended June
30, 1999 and ($56,962) for the quarter ended June 30, 1998.
Liquidity
- ---------
During the quarter ended June 30, 1999, the Company and its subsidiaries
had total expenses of $38,894, while receiving $0 in revenues.
Year 2000.
- ---------
There are no known "Year 2000 Issues" with Graystone. All
of Graystone's computers, scanners, tape drives and monitors and other
information processing hardware and systems are fully Y2K compliant. Each
component is warranted by its manufacturer to be Y2K compliant. All software
is warranted by its manufacturer to be Y2K compliant. All forms used by the
company are Y2K compliant.
Graystone will ensure that all information processing systems that the
Company acquires in the future will be Y2K compliant.
Examples of current Graystone hardware and software that are Y2K
compliant are:
1. Gateway computers and other Gateway components.
2. Microsoft Word, Excel, Outlook, Powerpoint and Windows NT
4.0.
3. Intuit Quick Books Pro.
The Company can give no assurance that third parties with whom it does
business (e.g., banks and utilities) will ensure Year 2000 compliance in a
timely manner or that, if they do not, their computer systems will not have an
adverse effect on the Company. However, the Company does not believe that
Year 2000 compliance issues of such third parties will result in a material
adverse effect on its financial condition or results of operations.
Item 6. Exhibits and Reports on Form 8-K.
(a) EXHIBIT
Annual Report on Form 10-KSB for the year ended March 31, 1999, filed
November 30, 1999 **
(b) REPORTS ON FORM 8-K
8-K Current Report dated March 26, 1998, Regarding the Plan with
Graystone Nevada **
Agreement and Plan of Reorganization
Exhibit A - Graystone Stockholder
Exhibit B - Achiote Corporation Financial
Statements for the periods ended
March 31, 1997, 1996 and 1995
Exhibit B-1 - Achiote Corporation Unaudited
Financial Statements for the
period ended December 31, 1997
Exhibit C - Exceptions to Achiote Financial
Statements
Exhibit D - Graystone World Wide Financial
Statements for the period from
inception (January 16, 1998) to
January 31, 1998 (See Item 7 above)
Exhibit E - Exceptions to Graystone World
Wide Financial Statements
Exhibit F - Investment Letter
Exhibit G - Compliance Certificate of Achiote
Corporation
Exhibit H - Compliance Certificate of
Graystone World Wide, Inc.
Exhibit I - Consultant Shares
Certificate of Amendment to Certificate of
Incorporation reflecting name change to
"Graystone World Wide, Inc." and forward
split of shares
8-K Current Report dated May 24, 1999, regarding litigation against
Graystone **
8-K Current Report dated July 6, 1999, regarding the change in
accountants **
** This document and related exhibits have been previously filed with
the Securities and Exchange Commission and by this reference are incorporated
herein.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
GRAYSTONE WORLD WIDE, INC.
Date: 11/29/99 By/s/Donald J. Hallisy
-----------------------------
Donald J. Hallisy
Director and President
Date: 11/30/99 By/s/Todd L. Kinney
-----------------------------
Todd L. Kinney
Vice President and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated:
GRAYSTONE WORLD WIDE, INC.
Date: 11/29/99 By/s/Donald J. Hallisy
------------------------------
Donald J. Hallisy
Director and President
Date: 11/30/99 By/s/Todd L. Kinney
------------------------------
Todd L. Kinney
Vice President and Director
Date: 11/30/99 By/s/David E. Nelson
------------------------------
David E. Nelson
Secretary/Treasurer and Director
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 11399
<DEPRECIATION> 1593
<TOTAL-ASSETS> 9806
<CURRENT-LIABILITIES> 603163
<BONDS> 0
0
0
<COMMON> 16807
<OTHER-SE> (610164)
<TOTAL-LIABILITY-AND-EQUITY> 9806
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 29394
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9500
<INCOME-PRETAX> (38894)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (38894)
<EPS-BASIC> (0.002)
<EPS-DILUTED> (0.002)
</TABLE>
