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 December 31, 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.
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(Name of Small Business Issuer in its Charter)
DELAWARE 33-0601487
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(State or Other Jurisdiction of (IRS Employer ID No.)
incorporation or organization)
2506 Regency Lake Drive
Marietta, Georgia 30062
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(Address of Principal Executive Offices)
(770) 973-0673
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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 March 13,1999.
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statement
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.
GRAYSTONE WORLD WIDE, INC.
Formerly Achiote Corporation
(A Development Stage Company)
Balance Sheets
December 31, December 31,
1999 1998
ASSETS
Current assets
Cash $ 109 $ 19
Inventory - 687,432
Total current assets 109 687,451
Furniture and fixtures, less
accumulated depreciation of $2597 and $554 8,802 10,846
Other assets
Organization costs, net of accumulated
amortization of $286 and $286 - -
Total assets $ 8,911 $698,297
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities $130,758 $100,646
Related party Notes payable 558,183 605,887
Total current liabilities 688,941 706,563
Total liabilities 688,941 706,563
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;
18,267,000 shares and 14,782,360
shares issued and outstanding 18,267 14,782
Additional paid-in capital 1,465,933 295,768
Accumulated deficit during the
development stage (2,164,230) (319,372)
Total stockholders' equity (680,030) (8,822)
Total liabilities and stockholders'
equity $ 8,911 $ 697,741
See accompanying notes to financial statements
GRAYSTONE WORLD WIDE, INC.
Formerly Achiote Corporation
(A Development Stage Company)
Statements of Operations
Cumulative
From
For the three For the nine Inception
months ended months ended (May 4, 1992)
December 31, December 31, to December 31,
1999 1998 1999 1998 1999
Revenues $ - $ - $ - $ - $ -
Operating expenses
General and administrative 941,220 204,846 970,112 261,351 2,035,767
Depreciation 502 277 1,004 554 2,381
Amortization - - - - 286
Interest 9,500 - 19,000 - 85,145
Total operating expenses 951,222 205,123 990,116 262,085 2,123,579
Net (loss) $(951,222)(205,123) (990,116) (262,085)(2,123,579)
Net (loss) per share $ (0.05) $ (0.01) $ (0.06) $ (0.02)
Weighted average number of
shares outstanding 18,267,000 14,807,000 16,537,000 14,721,158
See accompanying notes to financial statements
GRAYSTONE WORLD WIDE, INC.
Formerly Achiote Corporation
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
April 1, 1995 Through December 31, 1999
Accumulated
Deficit
Common Stock Additional During the
Paid-In Development
Shares Amount Capital Stage Total
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
Shares issued for 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
Shares issued for Services 1,460,000 1,460 903,740 - 905,200
Net loss - - - (990,116) (990,116)
Balance, December
31, 1999 18,267,000 $18,267$1,465,933$(2,123,579)$(639,379)
See accompanying notes to financial statements
GRAYSTONE WORLD WIDE, INC.
Formerly Achiote Corporation
(A Development Stage Company)
Statements of Cash Flows
Cumulative
From
For the three For the nine Inception
months ended months ended (May 4, 1992)
December 31, December 31, to December 31,
1999 1998 1999 1998 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $(951,222)$(205,123)$(990,116)$(262,085)$(2,123,579)
Add items not requiring the use of
cash
Amortization - - - - 286
Depreciation 502 277 1,004 554 2,381
Increase in inventory - (354,330) - (687,432) -
Increase in accounts
payable and accrued
liabilities 43,645 68,858 64,180 68,858 246,808
Common stock issued for
Services 905,200 - 905,200 - 995,098
Net cash flows from operating
activities 1,875 (490,318) (19,732)(880,105) (879,006)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of furniture and
fixtures - (3,646) - (11,400) (11,400)
Organization costs - - - - (286)
Net cash flows from investing
activities - (3,646) - (11,400) (11,686)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from related party
notes payable - 407,963 - 407,963 400,000
Proceeds from shareholder
loan 2,000 20,581 (172,043) 182,581 2,000
Payments on long-term debt - - - - -
Payments on shareholder loan - - - - -
Issuance of common stock - 100,000 191,900 300,000 488,817
Net cash flows from financing
activities 2,000 428,544 19,857 890,544 890,817
Net increase/(decrease) in cash 125 (65,420) 125 (961) 125
Cash balance at beginning of
period 0 65,439 - 980 -
Cash balance at end of period $ 125 19 125 19 125
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 Delaware 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. NOTE PAYABLE - SHAREHOLDER
During the period ended September 30, 1998, a company owned by a major
shareholder advanced the Company funds. The note is a demand note that
is non-interest bearing. The balance at December 31, 1999 is $174,043.
4. LONG-TERM DEBT
The long-term debt consists of the following at September 30, 1998:
1998 1997
Note payable to a financial institution;
a demand note that is non-interest
bearing $ 399,500 $ -
Total long-term debt 399,500 -
Less current portion (399,500) -
Long-term debt $ - $ -
Item 2. Management's Discussion and Analysis and Plan of Operations.
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
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Revenues for the quarter ended December 31, 1999 were $0.
The Company had a net loss of ($990,116) for the nine months ended
December 31, 1999 and ($262,085) for the nine months ended December 31, 1998.
Liquidity
- ---------
For the nine months ended December 31, 1999, the Company and its
subsidiaries had total expenses of $990,116, 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.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None
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 **
** These documents 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: 03/13/00 By/s/Donald J. Hallisy
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Donald J. Hallisy
Director and President
Date: 03/13/00 By/s/Norman J. McCallum
-----------------------------
Norman J. McCallum
Secretary 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: 03/13/00 By/s/Donald J. Hallisy
------------------------------
Donald J. Hallisy
Director and President
Date: 03/13/00 By/s/Norman J. McCallum
-----------------------------
Norman J. McCallum
Secretary and Director
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