U.S. Securities and Exchange Commission
Washington, DC 20549
FORM 10-QSB-A1
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
[ ] 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)
282 S. Main Street, Suite C-D
Alpharetta, Georgia 30004
---------------------------------------
(Address of Principal Executive Offices)
(770) 619-9420
-----------------------------------------------
(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 14,782,000 shares of common stock, $.001 par value, outstanding
as of August 18, 1998.
Item 2. Management's Discussion and Analysis and Plan of Operations.
Plan of Operation.
- ------------------
The acquisition of certain companies within the manufacturing and energy
related industries and the realization of certain contracts and anticipated
revenues were delayed pending the completion of negotiations that were in the
best interest of the Company. Therefore, the Company's plan to generate
$38,000,000 in 1998-1999 revenue will spill over into 1999-2000 fiscal year.
The Company believes that these mergers and acquisitions and other activity,
such as production commitments out of South and Central America can generate
revenues in excess of $38,000,000 for the 1999-2000 fiscal year.
In terms of the generation of revenues, it is anticipated that key acquisition
of companies, and other substantial assets to include, but not limited to the
following, will add substantially to the Company's revenues and the bottom-
line:
Funtastix Footwear, Inc. ("Funtastix") a Denver, Colorado based marketer of
children's athletic footwear. Terms of this acquisition are a tax-free
exchange of corporate stock whereby the Company acquires all of the assets of
Funastix;
A U.S. domestic fabric footwear company with multiple distribution and
manufacturing facilities in the United States and the Caribbean. Terms of this
acquisition are that the Company will acquire 100% of the fabric footwear's
company's Virgin Island Corporation's stock for $3,000,000.00. This enables
the Company to carry the acquired assets at a depreciated value. The
agreement between the parties has been extended indefinitely and is currently
closed in escrow with work in process;
Corona Energy Corporation ("Corona"). Corona will facilitate the electrical
energy requirements of the above-referenced Caribbean footwear manufacturing
facilities. These manufacturing facilities currently generate their own
electrical power and have the ability to sell surplus electrical output to the
host government for additional revenues. Terms of this acquisition are a tax-
free exchange of corporate stock whereby the Company acquires all of the
assets of Corona.
State-of-the-art leather goods manufacturing, and tanning facilities in
Nicaragua. The purchase of these assets will enhance the Company's image in
South and Central America, thus facilitating its "Made in America's" marketing
plan. The original cost of these facilities was approximately $30,000,000.00
in 1985. The facilities are currently producing approximately 5,000 hides per
month and the shoe factory is producing approximately 20,000 pairs of shoes
for Central American consumption. The terms of these purchases will be a cash
price of $250,000.00 or less; the assumption of a long-term government loan
(approximately $1,000,000.00); and Company stock (owned by Donald J. Hallisy,
President and CEO) issued to purchase 100% of the assets.
The Company believes that the aforementioned acquisition(s) will require
approximately $6,100,000.00 in cash and/ or stock. With this infrastructure in
place, the Company is confident that it can exceed its revenue projections of
$38,000,000.00. If in the event, any or all of the aforementioned acquisitions
do not materialize, the Company is confident that it can meet its financial
projections through "stand alone" production commitments from certain South
and Central American manufacturing companies.
In terms of financing and the potential liquidity needs of the Company,
agreements with recognized financial institutions, such as Financial Solutions
of New York (Line of Credit up to $20,000,000 as needed), and the Commercial
Division of NationsBank (Receivables Financing and Letters of Credit) have
been initiated. The Lines of Credit and Receivables Financing are primarily
for raw material and are to be used for all work in progress and production
commitments for the Company and its subsidiaries; These Lines of Credit and
Receivables Financing are not contingent upon any pending acquisitions.
In addition, other financial agreements are in place with both Sigma Holdings
Corporation and S L Williams LLC whereby Donald J. Hallisy, President and CEO
of the Company has agreed to leverage personal assets (i.e. stock and/ or
$8,000,000.00 in equipment) to raise the aforementioned $6,100,000.00.
In addition, the Company is contemplating a secondary offering of common stock
for additional acquisitions if deemed necessary by Management. This may or may
not happen in concert with the Company's plans to move to the NASDAQ markets,
once the acquisitions intended to reach the required minimum assets of these
markets are completed. However, for the moment, Management does not foresee a
secondary offering as necessary to attain its financial goals. Management is
of the opinion that the Company is sufficiently capitalized to maintain its
current level of operations, and has access to sufficient Lines of Credit and
other types of capitalization to maintain its current and proposed Business
Plan.
The net result for 1998-1999 has been:
The establishment of significant contract vendor relationships for the
specific categories of product for fiscal year 1999-2000. This has
entailed the investment in specific manufacturing equipment and
supplies to facilitate production, to include but is not limited
to injection molds, injecting machinery, and other footwear
manufacturing equipment;
The establishment of significant production commitments with numerous
South and Central manufacturing companies;
Work in Process: The value of this work in process is currently
undetermined. However, the Company is of the opinion that it will
be substantial;
Agreements towards the acquisition of key support companies (see
above); and,
The establishment of crucial financing with recognized leading
financial institutions.
This Plan of Operations should be read in conjunction with the Results of
Operations and Liquidity sections below.
Results of Operations
- ---------------------
Revenues for the quarter ended June 30, 1998 were $0.
The Company had a net loss of ($56,962) for the three quarters ended June
30, 1998 and ($6) for the three quarters ended June 30, 1997.
Liquidity
- ---------
During the quarter ended June 30, 1998, the Company and its subsidiaries
had total expenses of $56,962, while receiving $0 in revenues.
Year 2000.
- ---------
There are no know "Year 2000 Issues" with Graystone World Wide, Inc. 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 World Wide, Inc. 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, 1998, filed August 19, 1998
Amended Annual Report on Form 10-KSB for the **
year ended March 31, 1998, filed in conjunction
with this Report
(b) REPORTS ON FORM 8-K
SEC Form 8-K, dated March 26, 1998, Regarding **
the Plan with Graystone Nevada
** 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: 2/12/99 By/s/Donald J. Hallisy
-----------------------------
Donald J. Hallisy
Director and President
Date: 2/12/99 By/s/John L. Melcher
-----------------------------
John L. Melcher
Vice President and Treasurer
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: 2/12/99 By/s/Donald J. Hallisy
------------------------------
Donald J. Hallisy
Director and President
Date: 2/12/99 By/s/John L. Melcher
------------------------------
John L. Melcher
Vice President and Treasurer
