U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB/A
General Form for Registration of Securities
of Small Business Issuers
Under Section 12(b) or (g) of
the Securities Exchange Act of 1934
FORESTAY CORPORATION
-----------------------------
(Name of Small Business Issuer)
Delaware 52-2175692
- ------------------------------- -------------------------------
(State or Other Jurisdiction of I.R.S. Employer Identification Number
Incorporation or Organization)
1504 R Street, N.W., Washington, D.C. 20009
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(Address of Principal Executive Offices including Zip Code)
202/387-5400
_____________
(Issuer's Telephone Number)
Securities to be Registered Under Section 12(b) of the Act: None
Securities to be Registered Under Section 12(g) of the Act: Common Stock,
$.0001 Par Value
(Title of Class)
PART I
ITEM 1. BUSINESS.
Forestay Corporation (the "Company") was incorporated on June 7,
1999 under the laws of the State of Delaware to engage in any lawful
corporate undertaking, including, but not limited to, selected
mergers and acquisitions. The Company has been in the developmental
stage since inception and has no operations to date other than
issuing shares to its original shareholder.
The Company will attempt to locate and negotiate with a
business entity for the combination of that target company with the
Company. The combination will normally take the form of a merger,
stock-for-stock exchange or stock-for-assets exchange. In most
instances the target company will wish to structure the business
combination to be within the definition of a tax-free reorganization
under Section 351 or Section 368 of the Internal Revenue Code of
1986, as amended.
No assurances can be given that the Company will be successful
in locating or negotiating with any target company.
The Company has been formed to provide a method for a foreign
or domestic private company to become a reporting ("public") company
with a class of registered securities.
ASPECTS OF A REPORTING COMPANY
There are certain perceived benefits to being a reporting
company. These are commonly thought to include the following:
* increased visibility in the financial community;
* provision of information required under Rule 144 for
trading of eligible securities;
* compliance with a requirement for admission to quotation
on the OTC Bulletin Board maintained by Nasdaq or on the
Nasdaq SmallCap Market;
* the facilitation of borrowing from financial institutions;
* improved trading efficiency;
* shareholder liquidity;
* greater ease in subsequently raising of capital;
* compensation of key employees through stock options for
which there may be a market valuation;
* enhanced corporate image.
There are also certain perceived disadvantages to being a
reporting company. These are commonly thought to include the
following:
* requirement for audited financial statements;
* required publication of corporate information;
* required filings of periodic and episodic reports with
the Securities and Exchange Commisison;
* increased rules and regulations governing management,
corporate activities and shareholder relations.
COMPARISON WITH INITIAL PUBLIC OFFERING
Certain private companies may find a business combination more
attractive than an initial public offering of their securities.
Reasons for this may include the following:
* inability to obtain underwriter;
* possible larger costs, fees and expenses;
* possible delays in the public offering process;
* greater dilution of their outstanding securities.
Certain private companies may find a business combination less
attractive than an initial public offering of their securities.
Reasons for this may include the following:
* no investment capital raised through a business
combination;
* no underwriter support of after-market trading.
POTENTIAL TARGET COMPANIES
A business entity, if any, which may be interested in a
business combination with the Company may include the following:
* a company for which a primary purpose of becoming public
is the use of its securities for the acquisition of
assets or businesses;
* 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;
* a company which wishes to become public with less
dilution of its common stock than would occur upon an
underwriting;
* a company which believes that it will be able to obtain
investment capital on more favorable terms after it has
become public;
* a foreign company which may wish an initial entry into
the United States securities market;
* a special situation company, such as a company seeking a
public market to satisfy redemption requirements under a
qualified Employee Stock Option Plan;
* a company seeking one or more of the other perceived
benefits of becoming a public company.
A business combination with a target company will normally
involve the transfer to the target company of the majority of the
issued and outstanding common stock of the Company, and the
substitution by the target company of its own management and board
of directors.
No assurances can be given that the Company will be able to
enter into a business combination, as to the terms of a business
combination, or as to the nature of the target company.
The proposed business activities described herein classify the
Company as a "blank check" company. The Securities and Exchange
Commission and certain states have enacted statutes, rules and
regulations limiting the sale of securities of blank check
companies. The Company will not issue or sell additional shares or
take any efforts to cause a market to develop in the Company's
securities until such time as the Company has successfully
implemented its business plan and it is no longer classified as a
blank check company.
The sole shareholder of the Company has executed and delivered
a "lock-up" agreement affirming that it will not sell or otherwise
transfer its shares except in connection with or following a
business combination resulting in the Company no longer being
classified as a blank check company.
The Company is voluntarily filing this Registration Statement
with the Securities and Exchange Commission and is under no
obligation to do so under the Securities Exchange Act of 1934. The
Company will voluntarily continue to file all reports required of it
under the Exchange Act until a business combination has occurred. A
business combination will normally result in a change in control and
management of the Company. Since a benefit of a business
combination with the Company would normally be considered its status
as a reporting company, it is anticipated that the Company will
continue to file reports under the Exchange Act following a business
combination. No assurance can be given that this will occur or, if
it does, for how long.
James M. Cassidy is the sole officer and director of the
Company and the controlling shareholder of the Company's sole
shareholder, TPG Capital Corporation. The Company has no employees
nor are there any other persons than Mr. Cassidy who devote any of
their time to its affairs. All references herein to management of
the Company are to Mr. Cassidy. The inability at any time of Mr.
Cassidy to devote sufficient attention to the Company could have a
material adverse impact on its operations.
GLOSSARY
"Blank Check" Company As used herein, a "blank check" company is a
development stage company that has no
specific business plan or purpose or has
indicated that its business plan is to
engage in a merger or acquisition with an
unidentified company or companies.
Business Combination Normally a merger, stock-for-stock exchange
or stock-for-assets exchange between the
Registrant and a target company.
The Company or The corporation whose common stock is the
the Registrant subject of this Registration Statement.
Exchange Act The Securities Exchange Act of 1934, as
amended.
Securities Act The Securities Act of 1933, as amended.
RISK FACTORS
The Company's business is subject to numerous risk factors,
including the following:
THE COMPANY HAS NO OPERATING HISTORY NOR REVENUE AND MINIMAL
ASSETS. The Company has had no operating history nor any revenues
or earnings from operations. The Company has no significant assets
or financial resources. The Company has operated at a loss to date
and will, in all likelihood, continue to sustain operating expenses
without corresponding revenues, at least until the consummation of a
business combination. TPG Capital Corporation has agreed to pay all
expenses incurred by the Company until a business combination
without repayment by the Company. TPG Capital Corporation is the
sole shareholder of the Company. To date, expenses of approximately
$4,800 have been incurred by the Company.
COMPANY HAS ONLY ONE DIRECTOR AND ONE OFFICER. The Company's
president, its sole officer, is James M. Cassidy who is also its
sole director and the controlling shareholder of its sole
shareholder. Because management consists of only one person, the
Company does not benefit from multiple judgments that a greater
number of directors or officers would provide and the Company will
rely completely on the judgment of its sole officer and director
when selecting a target company. The decision to enter into a
business combination will likely be made without detailed
feasibility studies, independent analysis, market surveys or similar
information which, if the Company had more funds available to it,
would be desirable. Mr. Cassidy anticipates devoting only a limited
amount of time per month to the business of the Company. Mr.
Cassidy has not entered into a written employment agreement with the
Company and he is not expected to do so. The Company has not
obtained key man life insurance on Mr. Cassidy. The loss of the
services of Mr. Cassidy would adversely affect development of the
Company's business and its likelihood of continuing operations.
CONFLICTS OF INTEREST. Mr. Cassidy, the Company's president,
participates in other business ventures which may compete directly
with the Company. Additional conflicts of interest and non-arms
length transactions may also arise in the future. The Company has
adopted a policy that it will not enter into a business combination
with any entity in which any member of management serves as an
officer, director or partner, or in which such person or such
person's affiliates or associates hold any ownership interest. The
terms of business combination may include such terms as Mr. Cassidy
remaining a director or officer of the Company and/or the continuing
securities or other legal work of the Company being handled by the
law firm of which Mr. Cassidy is the principal. The terms of a
business combination may provide for a payment by cash or otherwise
to TPG Capital Corporation for the purchase or retirement of all or
part of its common stock of the Company by a target company or for
services rendered incident to or following a business combination.
Mr. Cassidy would directly benefit from such employment or payment.
Such benefits may influence Mr. Cassidy's choice of a target
company. The Certificate of Incorporation of the Company provides
that the Company may indemnify officers and/or directors of the
Company for liabilities, which can include liabilities arising under
the securities laws. Therefore, assets of the Company could be used
or attached to satisfy any liabilities subject to such
indemnification. See "ITEM 5. DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS--Conflicts of Interest."
THE PROPOSED OPERATIONS OF THE COMPANY ARE SPECULATIVE. The
success of the Company's proposed plan of operation will depend to a
great extent on the operations, financial condition and management
of the identified target company. While business combinations with
entities having established operating histories are preferred, there
can be no assurance that the Company will be successful in locating
candidates meeting such criteria. In the event the Company
completes a business combination the success of the Company's
operations will be dependent upon management of the target company
and numerous other factors beyond the Company's control. There is
no assurance that the Company can identify a target company and
consummate a business combination.
PURCHASE OF PENNY STOCKS CAN BE RISKY. In the event that a
public market develops for the Company's securities following a
business combination, such securities may be classified as a penny
stock depending upon their market price and the manner in which they
are traded. The Securities and Exchange Commission has adopted Rule
15g-9 which establishes the definition of a "penny stock," for
purposes relevant to the Company, as any equity security that has a
market price of less than $5.00 per share or with an exercise price
of less than $5.00 per share whose securities are admitted to
quotation but do not trade on the Nasdaq SmallCap Market or on a
national securities exchange. For any transaction involving a penny
stock, unless exempt, the rules require delivery of a document to
investors stating the risks, special suitability inquiry, regular
reporting and other requirements. Prices for penny stocks are often
not available and investors are often unable to sell such stock.
Thus an investor may lose his investment in a penny stock and
consequently should be cautious of any purchase of penny stocks.
THERE IS A SCARCITY OF AND COMPETITION FOR BUSINESS
OPPORTUNITIES AND COMBINATIONS. The Company is and will continue to
be an insignificant participant in the business of seeking mergers
with and acquisitions of business entities. A large number of
established and well-financed entities, including venture capital
firms, are active in mergers and acquisitions of companies which may
be merger or acquisition target candidates for the Company. Nearly
all such entities have significantly greater financial resources,
technical expertise and managerial capabilities than the Company
and, consequently, the Company will be at a competitive disadvantage
in identifying possible business opportunities and successfully
completing a business combination. Moreover, the Company will also
compete with numerous other small public companies in seeking merger
or acquisition candidates.
THERE IS NO AGREEMENT FOR A BUSINESS COMBINATION AND NO
MINIMUM REQUIREMENTS FOR BUSINESS COMBINATION. The Company has no
current arrangement, agreement or understanding with respect to
engaging in a business combination with a specific entity. There
can be no assurance that the Company will be successful in
identifying and evaluating suitable business opportunities or in
concluding a business combination. No particular industry or
specific business within an industry has been selected for a target
company. The Company has not established a specific length of
operating history or a specified level of earnings, assets, net
worth or other criteria which it will require a target company to
have achieved, or without which the Company would not consider a
business combination with such business entity. Accordingly, the
Company may enter into a business combination with a business entity
having no significant operating history, losses, limited or no
potential for immediate earnings, limited assets, negative net worth
or other negative characteristics. There is no assurance that the
Company will be able to negotiate a business combination on terms
favorable to the Company.
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION.
Pursuant to the requirements of Section 13 of the Securities
Exchange Act of 1934 (the "Exchange Act"), the Company is required
to provide certain information about significant acquisitions
including audited financial statements of the acquired company.
These audited financial statements must be furnished within 75 days
following the effective date of a business combination. Obtaining
audited financial statements are the economic responsibility of the
target company. The additional time and costs that may be incurred
by some potential target companies to prepare such financial
statements may significantly delay or essentially preclude
consummation of an otherwise desirable acquisition by the Company.
Acquisition prospects that do not have or are unable to obtain the
required audited statements may not be appropriate for acquisition
so long as the reporting requirements of the Exchange Act are
applicable. Notwithstanding a target company's agreement to obtain
audited financial statements within the required time frame, such
audited financials may not be available to the Company at the time
of effecting a business combination. In cases where audited
financials are unavailable, the Company will have to rely upon
unaudited information that has not been verified by outside auditors
in making its decision to engage in a transaction with the business
entity. This risk increases the prospect that a business
combination with such a business entity might prove to be an
unfavorable one for the Company.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The
Company has neither conducted, nor have others made available to it,
market research indicating that demand exists for the transactions
contemplated by the Company. Even in the event demand exists for a
transaction of the type contemplated by the Company, there is no
assurance the Company will be successful in completing any such
business combination.
REGULATION UNDER INVESTMENT COMPANY ACT. In the event the
Company engages in business combinations which result in the Company
holding passive investment interests in a number of entities, the
Company could be subject to regulation under the Investment Company
Act of 1940. In such event, the Company would be required to
register as an investment company and could be expected to incur
significant registration and compliance costs. The Company has
obtained no formal determination from the Securities and Exchange
Commission as to the status of the Company under the Investment
Company Act of 1940 and, consequently, any violation of such Act
could subject the Company to material adverse consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business
combination involving the issuance of the Company's common stock
will, in all likelihood, result in shareholders of a target company
obtaining a controlling interest in the Company. As a condition of
the business combination agreement, TPG Capital Corporation, the
sole shareholder of the Company, may agree to sell or transfer all
or a portion of its Company's common stock so to provide the target
company with all or majority control. The resulting change in
control of the Company will likely result in removal of the present
officer and director of the Company and a corresponding reduction in
or elimination of his participation in the future affairs of the
Company.
POSSIBLE DILUTION OF VALUE OF SHARES UPON BUSINESS
COMBINATION. A business combination normally will involve the
issuance of a significant number of additional shares. Depending
upon the value of the assets acquired in such business combination,
the per share value of the Company's common stock may increase or
decrease, perhaps significantly.
TAXATION. Federal and state tax consequences will, in all
likelihood, be major considerations in any business combination the
Company may undertake. Currently, such transactions may be
structured so as to result in tax-free treatment to both companies,
pursuant to various federal and state tax provisions. The Company
intends to structure any business combination so as to minimize the
federal and state tax consequences to both the Company and the
target company; however, there can be no assurance that such
business combination will meet the statutory requirements of a
tax-free reorganization or that the parties will obtain the intended
tax-free treatment upon a transfer of stock or assets. A
non-qualifying reorganization could result in the imposition of both
federal and state taxes which may have an adverse effect on both
parties to the transaction.
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. It is impossible to predict
what computer programs will be affected, the impact any such
computer disruption will have on other industries or commerce or the
severity or duration of a computer disruption.
YEAR 2000 PROBLEM MAY ADVERSELY AFFECT THE COMPANY. The
Company does not have operations and does not maintain computer
systems. Before the Company enters into any business combination,
it may inquire as to the status of any target company's Year 2000
Problem, the steps such target company has taken or intends to take
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 enter into a business
combination with a target company that has an uncorrected Year 2000
Problem or that any planned Year 2000 Problem corrections will be
sufficient. The extent of the Year 2000 Problem of a target company
may be impossible to ascertain and any impact on the Company will
likely be impossible to predict. If the Company does not determine
the Year 2000 Problem readiness of a target company, or if that
target company is unsure of its own readiness or vulnerability, then
the Company may suffer severe consequences if the disruptions
predicted by the Year 2000 Problem materialize. In addition to the
those disruptions that may be suffered by region, such erratic
distribution of electricity, gas, food, water, telephone and
transportation systems, the Company may be specifically harmed by
computer hardware or software failure on which the target company
may have been dependent.
ITEM 2. PLAN OF OPERATION
SEARCH FOR TARGET COMPANY
The Company intends to enter into a business combination with
a target company in exchange for the Company's securities. The
Company has not engaged in any negotiations with any specific entity
regarding the possibility of a business combination with the
Company. The Company has entered into an agreement with TPG Capital
Corporation, the sole shareholder of the Company, to supervise the
search for target companies as potential candidates for a business
combination. The agreement will continue until such time as the
Company has effected a business combination. TPG Capital
Corporation has agreed to pay all expenses of the Company without
repayment until such time as a business combination is effected.
James M. Cassidy, who is the sole officer and director of the
Company, is the sole officer and director and controlling
shareholder of TPG Capital Corporation.
TPG Capital Corporation may only locate potential target
companies for the Company and is not authorized to enter into any
agreement with a potential target company binding the Company. The
Company's agreement with TPG Capital Corporation is not exclusive
and TPG Capital Corporation has entered into agreements with other
companies similar to the Company on similar terms. TPG Capital
Corporation may provide assistance to target companies incident to
and following a business combination, and receive payment for such
assistance from a target companies.
TPG Capital Corporation owns 5,000,000 shares of the Company's
common stock for which it paid $500, or $.0001, par value, per
share.
TPG Capital Corporation has entered, and anticipates that it
will enter, into agreements with other consultants to assist it in
locating a target company and TPG Capital Corporation may share its
stock in the Company with or grant options on such stock to such
referring consultants and may make payment to such consultants from
its own resources. There is no minimum or maximum amount of stock,
options, or cash that TPG Capital Corporation may grant or pay to
such consultants. TPG Capital Corporation is solely responsible for
the costs and expenses of its activities in seeking a potential
target company, including any agreements with consultants, and the
Company has no obligation to pay any costs incurred or negotiated by
TPG Capital Corporation.
TPG Capital Corporation anticipates that it may seek to locate
a target company through solicitation. Such solicitation may
include newspaper or magazine advertisements, mailings and other
distributions to law firms, accounting firms, investment bankers,
financial advisors and similar persons, the use of one or more World
Wide Web sites and similar methods. No estimate can be made as to
the number of persons who may be contacted or solicited. To date
TPG Capital Corporation has not utilized solicitation, does not
anticipate that it will do so, and expects to rely on referrals from
consultants in the business and financial communities for referrals
of potential target companies.
James M. Cassidy is the sole officer of TPG Capital
Corporation and is also the principal of Cassidy & Associates, a
Washington, D.C. law firm specializing in securities and corporate
law, and as such, is regularly in communication with numerous
persons, including corporate officers, attorneys, accountants,
financial advisors, brokers, dealers, investment counselors,
financial advisors and others. Some of these individuals may be
interested in utilizing the services of the law firm for their
companies or clients in regard to a wide variety of possible
securities-related work including mergers, acquisitions, initial
public offerings, stock distributions, incorporations, or other
activities. It is possible over time that certain of the companies
or clients represented by these persons may develop into possible
target companies. In addition, TPG Capital Corporation has contact
with many consultants, accountants, attorneys, brokers, investment
bankers, businessmen, financial advisors and others who work with
businesses which may desire to go public. From time to time such
contacts may refer their contacts, clients, acquaintances and others
to TPG Capital Corporation.
MANAGEMENT OF THE COMPANY
The Company has no full time employees. James M. Cassidy is
the sole officer of the Company and its sole director. Mr. Cassidy
is also the controlling shareholder of TPG Capital Corporation, the
Company's sole shareholder. Mr. Cassidy, as president of the
Company, has agreed to allocate a portion of his time to the
activities of the Company without compensation. Potential conflicts
may arise with respect to the limited time commitment by Mr. Cassidy
and the potential demands of the Company's activities.
The amount of time spent by Mr. Cassidy on the activities of
the Company is not predictable. Such time may vary widely from an
extensive amount when reviewing a target company and effecting a
business combination to an essentially quiet time when activities of
management focus elsewhere, or some amount in between. It is
impossible to predict with any precision the exact amount of time
Mr. Cassidy will actually be required to spend to locate a suitable
target company. Mr. Cassidy estimates that the business plan of the
Company can be implemented by devoting approximately 10 to 25 hours
per month over the course of several months but such figure cannot
be stated with precision.
GENERAL BUSINESS PLAN
The Company's purpose is to seek, investigate and, if such
investigation warrants, acquire an interest in a business entity
which desires to seek the perceived advantages of a corporation
which has a class of securities registered under the Exchange Act.
The Company will not restrict its search to any specific business,
industry, or geographical location and the Company may participate
in a business venture of virtually any kind or nature. Management
anticipates that it will be able to participate in only one
potential business venture because the Company has nominal assets
and limited financial resources. See PART F/S, "FINANCIAL
STATEMENTS." This lack of diversification should be considered a
substantial risk to the shareholders of the Company because it will
not permit the Company to offset potential losses from one venture
against gains from another.
The Company may seek a business opportunity with entities
which have recently commenced operations, or which wish to utilize
the public marketplace in order to raise additional capital in order
to expand into new products or markets, to develop a new product or
service, or for other corporate purposes.
The Company anticipates that the selection of a business
opportunity in which to participate will be complex and extremely
risky. Management believes (but has not conducted any research to
confirm) that there are business entities seeking the perceived
benefits of a reporting corporation. Such perceived benefits may
include facilitating or improving the terms on which additional
equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, increasing the
opportunity to use securities for acquisitions, providing liquidity
for shareholders and other factors. Business opportunities may be
available in many different industries and at various stages of
development, all of which will make the task of comparative
investigation and analysis of such business opportunities difficult
and complex.
The Company has, and will continue to have, no capital with
which to provide the owners of business entities with any cash or
other assets. However, management believes the Company will be able
to offer owners of acquisition candidates the opportunity to acquire
a controlling ownership interest in a reporting company without
incurring the cost and time required to conduct an initial public
offering. Management has not conducted market research and is not
aware of statistical data to support the perceived benefits of a
business combination for the owners of a target company.
The analysis of new business opportunities will be undertaken
by, or under the supervision of, the officer and director of the
Company, who is not a professional business analyst. In analyzing
prospective business opportunities, management may consider such
matters as the available technical, financial and managerial
resources; working capital and other financial requirements; history
of operations, if any; prospects for the future; nature of present
and expected competition; the quality and experience of management
services which may be available and the depth of that management;
the potential for further research, development, or exploration;
specific risk factors not now foreseeable but which then may be
anticipated to impact the proposed activities of the Company; the
potential for growth or expansion; the potential for profit; the
perceived public recognition or acceptance of products, services, or
trades; name identification; and other relevant factors. This
discussion of the proposed criteria is not meant to be restrictive
of the Company's virtually unlimited discretion to search for and
enter into potential business opportunities.
The Company is subject to all of the reporting requirements
included in the Exchange Act. Included in these requirements is the
duty of the Company to file audited financial statements as part of
or within 60 days following the due date for filing its Form 8-K
which is required to be filed with the Securities and Exchange
Commission within 15 days following the completion of the business
combination. The Company intends to acquire or merge with a company
for which audited financial statements are available or for which it
believes audited financial statements can be obtained within the
required period of time. The Company may reserve the right in the
documents for the business combination to void the transaction if
the audited financial statements are not timely available or if the
audited financial statements provided do not conform to the
representations made by the target company.
The Company will not restrict its search for any specific kind
of business entities, but may acquire a venture which is in its
preliminary or development stage, which is already in operation, or
in essentially any stage of its business life. It is impossible to
predict at this time the status of any business in which the Company
may become engaged, in that such business may need to seek
additional capital, may desire to have its shares publicly traded,
or may seek other perceived advantages which the Company may offer.
Following a business combination the Company may benefit from
the services of others in regard to accounting, legal services,
underwritings and corporate public relations. If requested by a
target company, management may recommend one or more underwriters,
financial advisors, accountants, public relations firms or other
consultants to provide such services.
A potential target company may have an agreement with a
consultant or advisor providing that services of the consultant or
advisor be continued after any business combination. Additionally,
a target company may be presented to the Company only on the
condition that the services of a consultant or advisor be continued
after a merger or acquisition. Such preexisting agreements of
target companies for the continuation of the services of attorneys,
accountants, advisors or consultants could be a factor in the
selection of a target company.
TERMS OF A BUSINESS COMBINATION
In implementing a structure for a particular business
acquisition, the Company may become a party to a merger,
consolidation, reorganization, joint venture, or licensing agreement
with another corporation or entity. On the consummation of a
transaction, it is likely that the present management and
shareholders of the Company will no longer be in control of the
Company. In addition, it is likely that the Company's officer and
director will, as part of the terms of the acquisition transaction,
resign and be replaced by one or more new officers and directors.
It is anticipated that any securities issued in any such
reorganization would be issued in reliance upon exemption from
registration under applicable federal and state securities laws. In
some circumstances, however, as a negotiated element of its
transaction, the Company may agree to register all or a part of such
securities immediately after the transaction is consummated or at
specified times thereafter. If such registration occurs, it will be
undertaken by the surviving entity after the Company has entered
into an agreement for a business combination or has consummated a
business combination and the Company is no longer considered a blank
check company. The issuance of additional securities and their
potential sale into any trading market which may develop in the
Company's securities may depress the market value of the Company's
securities in the future if such a market develops, of which there
is no assurance.
While the terms of a business transaction to which the Company
may be a party cannot be predicted, it is expected that the parties
to the business transaction will desire to avoid the creation of a
taxable event and thereby structure the acquisition in a tax-free
reorganization under Sections 351 or 368 of the Internal Revenue
Code of 1986, as amended.
With respect to negotiations with a target company, management
expects to focus on the percentage of the Company which target
company shareholders would acquire in exchange for their
shareholdings in the target company. Depending upon, among other
things, the target company's assets and liabilities, the Company's
shareholders will in all likelihood hold a substantially lesser
percentage ownership interest in the Company following any merger or
acquisition. The percentage of ownership may be subject to
significant reduction in the event the Company acquires a target
company with substantial assets. Any merger or acquisition effected
by the Company can be expected to have a significant dilutive effect
on the percentage of shares held by the Company's shareholders at
such time.
The Company will participate in a business opportunity only
after the negotiation and execution of appropriate agreements.
Although the terms of such agreements cannot be predicted, generally
such agreements will require certain representations and warranties
of the parties thereto, will specify certain events of default, will
detail the terms of closing and the conditions which must be
satisfied by the parties prior to and after such closing and will
include miscellaneous other terms.
TPG Capital Corporation will pay all expenses in regard to its
search for a suitable target company. The Company does not
anticipate expending funds itself for locating a target company.
James M. Cassidy, the officer and director of the Company, will
provide his services without charge or repayment by the Company. To
date, TPG Capital Corporation has incurred expenses on behalf of the
Company aggregating approximately $4,800, including incorporation
and accounting expenses. The Company will not borrow any funds to
make any payments to the Company's management, its affiliates or
associates.
The Board of Directors has passed a resolution which contains
a policy that the Company will not seek a business combination with
any entity in which the Company's officer, director, shareholders or
any affiliate or associate serves as an officer or director or holds
any ownership interest.
UNDERTAKINGS AND UNDERSTANDINGS REQUIRED OF TARGET COMPANIES
As part of a business combination agreement, the Company
intends to obtain certain representations and warranties from a
target company as to its conduct following the business combination.
Such representations and warranties may include (i) the agreement
of the target company to make all necessary filings and to take all
other steps necessary to remain a reporting company under the
Exchange Act (ii) imposing certain restrictions on the timing and
amount of the issuance of additional free-trading stock, including
stock registered on Form S-8 or issued pursuant to Regulation S and
(iii) giving assurances of ongoing compliance with the Securities
Act, the Exchange Act, the General Rules and Regulations of the
Securities and Exchange Commission, and other applicable laws, rules
and regulations.
A prospective target company should be aware that the market
price and volume of its securities, when and if listed for secondary
trading, may depend in great measure upon the willingness and
efforts of successor management to encourage interest in the Company
within the United States financial community. The Company does not
have the market support of an underwriter that would normally follow
a public offering of its securities. Initial market makers are
likely to simply post bid and asked prices and are unlikely to take
positions in the Company's securities for their own account or
customers without active encouragement and a basis for doing so. In
addition, certain market makers may take short positions in the
Company's securities, which may result in a significant pressure on
their market price. The Company may consider the ability and
commitment of a target company to actively encourage interest in its
securities following a business combination in deciding whether to
enter into a transaction with such company.
A business combination with the Company separates the
process of becoming a public company from the raising of investment
capital. As a result, a business combination with Company normally
will not be a beneficial transaction for a target company whose
primary reason for becoming a public company is the immediate
infusion of capital. The Company may require assurances from the
target company that it has or that it has a reasonable belief that
it will have sufficient sources of capital to continue operations
following the business combination. However, it is possible that a
target company may give such assurances in error, or that the basis
for such belief may change as a result of circumstances beyond the
control of the target company.
Prior to completion of a business combination, the Company
will generally require that it be provided with written materials
regarding the target company containing such items as a description
of products, services and company history; management resumes;
financial information; available projections, with related
assumptions upon which they are based; an explanation of proprietary
products and services; evidence of existing patents, trademarks, or
service marks, or rights thereto; present and proposed forms of
compensation to management; a description of transactions between
such company and its affiliates during relevant periods; a
description of present and required facilities; an analysis of risks
and competitive conditions; a financial plan of operation and
estimated capital requirements; audited financial statements, or if
they are not available, unaudited financial statements, together
with reasonable assurances that audited financial statements would
be able to be produced within a reasonable period of time not to
exceed 75 days following completion of a business combination; and
other information deemed relevant.
COMPETITION
The Company will remain an insignificant participant among the
firms which engage in the acquisition of business opportunities.
There are many established venture capital and financial concerns
which have significantly greater financial and personnel resources
and technical expertise than the Company. In view of the Company's
combined extremely limited financial resources and limited
management availability, the Company will continue to be at a
significant competitive disadvantage compared to the Company's
competitors.
ITEM 3. DESCRIPTION OF PROPERTY
The Company has no properties and at this time has no
agreements to acquire any properties. The Company currently uses
the offices of management at no cost to the Company. Management has
agreed to continue this arrangement until the Company completes an
acquisition or merger.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth each person known by the
Company to be the beneficial owner of five percent or more of the
Company's Common Stock, all directors individually and all directors
and officers of the Company as a group. Except as noted, each
person has sole voting and investment power with respect to the
shares shown.
Name and Address Amount of Beneficial Percentage
of Beneficial Owner Ownership of Class
------------------ -------------------- -------------
TPG Capital Corporation (1) 5,000,000 100%
1504 R Street, N.W.
Washington, D.C. 20009
James M. Cassidy (2) 5,000,000 100%
1504 R Street, N.W.
Washington, D.C. 20009
All Executive Officers and
Directors as a Group (1 Person) 5,000,000 100%
(1) Mr. Cassidy is the controlling shareholder and sole
director and officer of TPG Capital Corporation. TPG Capital
Corporation serves as a marketing and consulting company for Cassidy
& Associates and its affiliated companies. TPG Capital Corporation
has agreed to provide certain assistance to the Company in locating
potential target companies, and to pay all costs of the Company
until a business combination, without reimbursement. See "PLAN OF
OPERATIONS General Business Plan".
(2) As the controlling shareholder, sole director and officer
of TPG Capital Corporation, Mr. Cassidy is deemed to be the
beneficial owner of the common stock of the Company owned by TPG
Capital Corporation.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The Company has one Director and Officer as follows:
Name Age Positions and Offices Held
----------- ---- ----------------------
James M. Cassidy 64 President, Secretary, Director
There are no agreements or understandings for the officer or
director to resign at the request of another person and the
above-named officer and director is not acting on behalf of nor will
act at the direction of any other person.
Set forth below is the name of the director and officer of the
Company, all positions and offices with the Company held, the period
during which he has served as such, and the business experience
during at least the last five years:
James Michael Cassidy, Esq., LL.B., LL.M., received a Bachelor
of Science in Languages and Linguistics from Georgetown University
in 1960, a Bachelor of Laws from The Catholic University School of
Law in 1963, and a Master of Laws in Taxation from The Georgetown
University School of Law in 1968. From 1963-1964, Mr. Cassidy was
law clerk to the Honorable Inzer B. Wyatt of the United States
District Court for the Southern District of New York. From
1964-1965, Mr. Cassidy was law clerk to the Honorable Wilbur K.
Miller of the United States Court of Appeals for the District of
Columbia. From 1969-1975, Mr. Cassidy was an associate of the law
firm of Kieffer & Moroney and a principal in the law firm of Kieffer
& Cassidy, Washington, D.C. From 1975 to date, Mr. Cassidy has been
a principal in the law firm of Cassidy & Associates, Washington,
D.C. and its predecessors, specializing in securities law and
related corporate and federal taxation matters. Mr. Cassidy is a
member of the bars of the District of Columbia and the State of New
York, and is admitted to practice before the United States Tax Court
and the United States Supreme Court.
PREVIOUS BLANK CHECK COMPANIES
In 1988, management was involved in two blank check offerings.
Mr. Cassidy was vice president, a director and a shareholder of
First Agate Capital Corporation and Consolidated Financial
Corporation. In August, 1988, First Agate Capital Corporation
offered 50,000 units at $10.00 for an aggregate of $500,000 in an
underwritten offering of its common stock and warrants. First Agate
Capital is no longer a public company and has had no activity since
1991. In November, 1988, Consolidated Financial Corporation offered
50,000 units at $10.00 for an aggregate of $500,000 in an
underwritten offering of its common stock and warrants. In 1990, in
connection with the change in control of Consolidated Financial
Corporation, Mr. Cassidy transferred all his shares of Consolidated
Financial Corporation common stock and resigned as an officer and
director of that company. Mr. Cassidy has had no further
relationship or transactions with Consolidated Financial Corporation
since 1990. In June, 1991, the new management of Consolidated
Financial Corporation effected its merger with A.B.E Industrial
Holdings.
CURRENT BLANK CHECK COMPANIES
James M. Cassidy, the president of the Company, is currently
involved with other blank check companies, and is involved in
creating additional companies similar to this one. The initial
business purpose of each of these companies was or is to engage in a
business combination with an unidentified company or companies and
each were or will be classified as a blank check company until
completion of a business combination.
Target companies will be located for the Company and other
identical blank check companies in chronological order of the date
of formation of such blank check companies or, in the case of blank
check companies formed on the same date, alphabetically. However,
certain blank check companies may differ from the Company in certain
items such as place of incorporation, number of shares and
shareholders, working capital, types of authorized securities,
preference of a certain blank check company name by management of
the target company, or other items. It may be that a target company
may be more suitable for or may prefer a certain blank check company
formed after the Company. In such case, a business combination
might be negotiated on behalf of the more suitable or preferred
blank check company regardless of date of formation.
The following chart summarizes certain information concerning
blank check companies with which Mr. Cassidy is or has been involved
which filed a registration statement on Form 10-SB. In most
instances that a business combination is transacted with one of
these companies, it is required to file a Current Report on Form 8-K
describing the transaction. Reference is made to the Form 8-K filed
for any company listed below for detailed information concerning the
business combination entered into by that company.
Registration
Form/Effective
Date/File
Corporation Number Status
Tunlaw International Form 10-SB Has not entered into
Corporation (1) 8/31/97; 0-22785 an agreement for a
business combination
Corcoran Technologies Form 10-SB Merger effected December
Corporation (2) 9/30/97; 0-22919 30, 1997. Form 8-K
filed January 13, 1998.
Aberdeen Acquisition Form 10-SB Anticipates merger with
Corporation (1) 4/11/98; 0-23761 specific company.
Form 8-K will be filed
if business combination
occurs.
Barhill Acquisition Form 10-SB Merger effected August
Corporation (2) 10/12/98; 0-24801 31, 1999. Form 8-K filed
September 1, 1999.
Sunderland Acquisition Form 10-SB Stock exchange and asset
Corporation (3) 10/12/98; 0-24803 acquisition effected
April 27, 1999.
Form 8-K filed May 4,
1999. Registration
statement on Form SB-2
filed October 1, 1999.
Westford Acquisition Form 10-SB Stock exchange effected
Corporation (2) 10/27/98; 0-24839 June 15, 1999. Merger
effected July 30, 1999.
Form 8-K filed August
13, 1999.
Chatsworth Acquisition Form 10-SB Merger effected
Corporation (2) 4/12/98; 0-23769 December 4, 1998.
Form 8-K filed December
18, 1998.
Blencathia Acquisition Form 10-SB Has not entered into
Corporation (1) 4/8/99; 0-25367 an agreement for a
business combination.
Warwick Acquisition Form 10-SB Stock-for-stock
Corporation (2) 4/18/99; 0-25419 exchange of subsidiary
effected May 27, 1999.
Form 8-K filed
May 27, 1999.
Registration statement
on Form SB-2 filed July
23, 1999.
Torbay Acquisition Form 10-SB Anticipates merger with
Corporation (1) 4/18/99; 0-25417 specific company. Form
8-K will be filed if
business combination
occurs.
Abbacy Corporation (1) Form 10-SB Has not entered into
6/17/99; 0-26405 an agreement for a
business combination
Aterian Corporation (1) Form 10-SB Has not entered into
6/17/99; 0-26409 an agreement for a
business combination
Baroque Corporation (1) Form 10-SB Has not entered into
6/17/99; 0-26407 an agreement for a
business combination
Borough Corporation (1) Form 10-SB Has not entered into
6/17/99; 0-26411 an agreement for a
business combination
Canticle Corporation (1) Form 10-SB Has not entered into
6/17/99; 0-26413 an agreement for a
business combination
Caprock Corporation (1) Form 10-SB Has not entered into
6/17/99; 0-26415 an agreement for a
business combination
Decurion Corporation (1) Form 10-SB Has not entered into
6/17/99; 0-26417 an agreement for a
business combination
Epilogue Corporation (1) Form 10-SB Has not entered into
6/17/99; 0-26425 an agreement for a
business combination
Erebus Corporation (1) Form 10-SB Has not entered into
6/17/99; 0-26419 an agreement for a
business combination
Forestay Corporation (1) Form 10-SB Has not entered into
6/17/99; 0-26421 an agreement for a
business combination
(1) Mr. Cassidy is the sole officer, director and beneficial
shareholder.
(2) Mr. Cassidy was the sole officer and director and remains a
beneficial shareholder.
(3) Mr. Cassidy was the sole officer and director and was a
beneficial shareholder.
RECENT TRANSACTIONS BY BLANK CHECK COMPANIES
On December 30, 1997, Prime Management, Inc., a California
corporation, merged with and into Corcoran Technologies Corporation.
Corcoran Technologies Corporation was formed on March 27, 1997 to
engage in a merger or acquisition with an unidentified company or
companies and was structured substantially identically to the
Company, including identical management and beneficial shareholders.
At the time of the merger, Prime Management, Inc. was an operating
transportation company with two wholly-owned subsidiaries, Mid-Cal
Express, a long-haul trucking company hauling shipments of general
commodities, including temperature-sensitive goods, in both
intrastate and interstate commerce and Mid-Cal Logistics, a freight
brokerage company. Pursuant to the merger, Corcoran Technologies
Corporation changed its name to Prime Companies, Inc. and Corcoran
Technologies Corporation filed a Form 8-K on January 13, 1998 with
the Securities and Exchange Commission describing the merger. The
common stock of Prime Companies, Inc. trades on the NASD OTC
Bulletin Board under the symbol PRMC. Detailed information
concerning Prime Companies, Inc. subsequent to the business
combination may be obtained from its filings under the Exchange Act
which are found the EDGAR archives page of the Securities and
Exchange Commission's Website at www.sec.gov.
On December 4, 1998, AmeriCom USA, Inc., a Delaware
corporation, merged with and into Chatsworth Acquisition
Corporation. Chatsworth Acquisition Corporation was formed on
December 3, 1997 to engage in a merger or acquisition with an
unidentified company or companies and was structured substantially
identically to the Company, including identical management and
beneficial shareholders. AmeriCom USA, Inc. is an operating
Internet advertising company with a wholly-owned subsidiary,
Diversified Associates International, a California company.
Pursuant to the merger, Chatsworth Acquisition Corporation changed
its name to AmeriCom USA, Inc. and Chatsworth Acquisition
Corporation filed a Form 8-K on December 18, 1998, with the
Securities and Exchange Commission describing the merger. On
January 24, 1999, AmeriCom USA, Inc. entered into an agreement to
acquire, through a subsidiary, Kiosk Software, Inc., a company
specializing in kiosk design and multimedia software development.
On February 26, 1999, AmeriCom USA, Inc. entered into an agreement
to acquire, through a subsidiary, all the assets of Jim and John
Tech, a California company. Detailed information concerning
AmeriCom USA, Inc. may be obtained from its filings under the
Exchange Act which are found the EDGAR archives page of the
Securities and Exchange Commission's Website at www.sec.gov.
On April 27, 1999, Capsource, Inc., a Nevada company, Del Mar
Mortgage, Inc., a Nevada company, and Del Mar Holdings, Inc. a
Nevada company, entered into a stock exchange agreement and asset
acquisition agreements, respectively, with Sunderland Acquisition
Corporation. Sunderland Acquisition Corporation was formed on June
2, 1998 to engage in a merger or acquisition with an unidentified
company or companies and was structured substantially identically to
the Company, including identical management and beneficial
shareholders. Capsource, Inc. and Del Mar Mortgage, Inc. are
operating loan origination companies and Del Mar Holdings, Inc.
serves as a holding company. Pursuant to the transactions,
Sunderland Acquisition Corporation changed its name to Sunderland
Corporation and filed a Form 8-K on May 4, 1999 with the Securities
and Exchange Commission describing the transactions. On October 1,
1999, Sunderland Corporation filed a registration statement on Form
SB-2. Detailed information concerning Sunderland Corporation
subsequent to the business combination may be obtained from its
filings under the Exchange Act which are found the EDGAR archives
page of the Securities and Exchange Commission's Website at
www.sec.gov.
On May 27, 1999, ThinWeb Software Incorporated, a Nova Scotia
corporation, entered into a stock exchange agreement with
Thinweb.com Inc., the wholly-owned Nova Scotia subsidiary of Warwick
Acquisition Corporation. Warwick Acquisition Corporation was formed
on June 2, 1998 to engage in a merger or acquisition with an unidentified
company or companies and was structured substantially identically to the
Company,including identical management and beneficial shareholders. ThinWeb
Software Incorporated is a development-stage computer software
company. Pursuant to the transaction, Warwick Acquisition
Corporation changed its name to thinWEB.com, Inc. and filed a Form
8-K on May 27, 1999 with the Securities and Exchange Commission
describing the transaction. On July 23, 1999, thinWEB.com
Corporation filed a registration statement on Form SB-2. Detailed
information concerning thinWEB.com, Inc. subsequent to the business
combination may be obtained from its filings under the Exchange Act
which are found the EDGAR archives page of the Securities and
Exchange Commission's Website at www.sec.gov.
On July 30, 1999, Westford Acquisition Corporation merged with
and into South Beach Concepts, Inc., a Florida corporation.
Westford Acquisition Corporation was formed on June 2, 1998 to
engage in a merger or acquisition with an unidentified company or
companies and was structured substantially identically to the
Company, including identical management and beneficial shareholders.
South Beach Concepts, Inc. develops, operates and franchises
take-out and eat-in restaurants with specific and consistent themes,
logos, and menus (i.e. "chains") and roasts, produces and markets
coffee beans and teas. It has two theme restaurant chains, Pizza
World Gourmet Pizza and South Beach Cafe. Pursuant to the
transaction, South Beach Concepts, Inc. was the surviving
corporation and the successor issuer to Westford Acquisition
Corporation and filed a Form 8-K on August 13, 1999. Detailed
information concerning South Beach Concepts, Inc. subsequent to the
business combination may be obtained from its filings under the
Exchange Act which are found the EDGAR archives page of the
Securities and Exchange Commission's Website at www.sec.gov.
On August 31, 1999, Barhill Acquisition Corporation merged
with and into Aqua Vie Beverage Corporation, a Delaware corporation.
Barhill Acquisition Corporation was formed June 2, 1998 to engage
in a merger or acquisition with an unidentified company or companies
and was structured substantially identically to the Company,
including identical management and beneficial shareholders. Aqua
Vie Beverage Corporation develops, bottles and distributes naturally
flavored bottled spring water offering such flavors as Avalanche
(pear and guava flavored spring water), Bamboo (cherry flavored
spring water), Paradise (orange and peach flavored spring water),
Harvest (strawberry flavored spring water) and other flavors.
Pursuant to the transaction, Aqua Vie Beverage Corporation was the
surviving corporation and the successor issuer to Barhill
Acquisition Corporation and filed a Form 8-K on September 1, 1999.
The common stock of Aqua Vie Beverage Corporation trades on the OTC
Bulletin Board under the symbol AVBC. Detailed information
concerning Aqua Vie Beverage Corporation subsequent to the business
combination may be obtained from its filings under the Exchange Act
which are found the EDGAR archives page of the Securities and
Exchange Commission's Website at www.sec.gov.
CONFLICTS OF INTEREST
James M. Cassidy, the Company's sole officer and director, has
organized and expects to organize other companies of a similar
nature and with a similar purpose as the Company. Consequently,
there are potential inherent conflicts of interest in acting as an
officer and director of the Company. In addition, insofar as Mr.
Cassidy is engaged in other business activities, he may devote only
a portion of his time to the Company's affairs.
A conflict may arise in the event that another blank check
company with which Mr. Cassidy is affiliated also actively seeks a
target company. It is anticipated that target companies will be
located for the Company and other blank check companies in
chronological order of the date of formation of such blank check
companies or, in the case of blank check companies formed on the
same date, alphabetically. However, other blank check companies may
differ from the Company in certain items such as place of
incorporation, number of shares and shareholders, working capital,
types of authorized securities, or other items. It may be that a
target company may be more suitable for or may prefer a certain
blank check company formed after the Company. In such case, a
business combination might be negotiated on behalf of the more
suitable or preferred blank check company regardless of date of
formation.
Mr. Cassidy is the principal of Cassidy & Associates, a
securities law firm located in Washington, D.C. As such, demands
may be placed on the time of Mr. Cassidy which will detract from the
amount of time he is able to devote to the Company. Mr. Cassidy
intends to devote as much time to the activities of the Company as
required. However, should such a conflict arise, there is no
assurance that Mr. Cassidy would not attend to other matters prior
to those of the Company. Mr. Cassidy estimates that the business
plan of the Company can be implemented in theory by devoting
approximately 10 to 25 hours per month over the course of several
months but such figure cannot be stated with precision.
Mr. Cassidy is the president, director and controlling
shareholder of TPG Capital Corporation, a Delaware corporation,
which owns 5,000,000 shares of the Company's common stock. At the
time of a business combination, some or all of the shares of common
stock owned by TPG Capital Corporation may be purchased by the
target company or retired by the Company. The amount of common
stock sold or continued to be owned by TPG Capital Corporation
cannot be determined at this time.
The terms of business combination may include such terms as
Mr. Cassidy remaining a director or officer of the Company and/or
the continuing securities or other legal work of the Company being
handled by the law firm of which Mr. Cassidy is the principal. The
terms of a business combination may provide for a payment by cash or
otherwise to TPG Capital Corporation for the purchase or retirement
of all or part of its common stock of the Company by a target
company or for services rendered incident to or following a business
combination. Mr. Cassidy would directly benefit from such
employment or payment. Such benefits may influence Mr. Cassidy's
choice of a target company. However, Mr. Cassidy's beneficial and
economic interest in all blank check companies with which he is
currently involved is identical.
The Company will not enter into a business combination, or
acquire any assets of any kind for its securities, in which
management of the Company or any affiliates or associates have any
interest, direct or indirect.
There are no binding guidelines or procedures for resolving
potential conflicts of interest. Failure by management to resolve
conflicts of interest in favor of the Company could result in
liability of management to the Company.
INVESTMENT COMPANY ACT OF 1940
Although the Company will be subject to regulation under the
Securities Act of 1933 and the Securities Exchange Act of 1934,
management believes the Company will not be subject to regulation
under the Investment Company Act of 1940 insofar as the Company will
not be engaged in the business of investing or trading in
securities. In the event the Company engages in business
combinations which result in the Company holding passive investment
interests in a number of entities the Company could be subject to
regulation under the Investment Company Act of 1940. In such event,
the Company would be required to register as an investment company
and could be expected to incur significant registration and
compliance costs. The Company has obtained no formal determination
from the Securities and Exchange Commission as to the status of the
Company under the Investment Company Act of 1940. Any violation of
such Act would subject the Company to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION.
The Company's officer and director does not receive any
compensation for his services rendered to the Company, has not
received such compensation in the past, and is not accruing any
compensation pursuant to any agreement with the Company. However,
the officer and director of the Company anticipates receiving
benefits as a beneficial shareholder of the Company, as the officer
and director and controlling shareholder of TPG Capital Corporation
and, possibly, as principal of Cassidy & Associates, which may
perform legal services for the Company after the business
combination. See "ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS Conflicts of Interest".
No retirement, pension, profit sharing, stock option or
insurance programs or other similar programs have been adopted by
the Company for the benefit of its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Company has issued a total of 5,000,000 shares of Common
Stock to the following persons for a total of $500 in cash:
Name Number of Total Shares Consideration
- ------- ---------------------- --------------
TPG Capital Corporation 5,000,000 $500
Mr. Cassidy is the sole director, controlling shareholder
and president of TPG Capital Corporation. With respect to the
sales made to TPG Capital Corporation, the Company relied upon
Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act") and Rule 506 promulgated thereunder.
ITEM 8. DESCRIPTION OF SECURITIES.
The authorized capital stock of the Company consists of
100,000,000 shares of common stock, par value $.0001 per share, of
which there are 5,000,000 issued and outstanding and 20,000,000
shares of preferred stock, par value $.0001 per share, of which none
have been designated or issued. The following statements relating
to the capital stock set forth the material terms of the Company's
securities; however, reference is made to the more detailed
provisions of, and such statements are qualified in their entirety
by reference to, the Certificate of Incorporation and the By-laws,
copies of which are filed as exhibits to this registration statement.
COMMON STOCK
Holders of shares of common stock are entitled to one vote for
each share on all matters to be voted on by the stockholders.
Holders of common stock do not have cumulative voting rights.
Holders of common stock are entitled to share ratably in dividends,
if any, as may be declared from time to time by the Board of
Directors in its discretion from funds legally available therefor.
In the event of a liquidation, dissolution or winding up of the
Company, the holders of common stock are entitled to share pro rata
all assets remaining after payment in full of all liabilities. All
of the outstanding shares of common stock are fully paid and
non-assessable.
Holders of common stock have no preemptive rights to purchase
the Company's common stock. There are no conversion or redemption
rights or sinking fund provisions with respect to the common stock.
PREFERRED STOCK
The Board of Directors is authorized to provide for the
issuance of shares of preferred stock in series and, by filing a
certificate pursuant to the applicable law of Delaware, to establish
from time to time the number of shares to be included in each such
series, and to fix the designation, powers, preferences and rights
of the shares of each such series and the qualifications,
limitations or restrictions thereof without any further vote or
action by the shareholders. Any shares of preferred stock so issued
would have priority over the common stock with respect to dividend
or liquidation rights. Any future issuance of preferred stock may
have the effect of delaying, deferring or preventing a change in
control of the Company without further action by the shareholders
and may adversely affect the voting and other rights of the holders
of common stock. At present, the Company has no plans to issue any
preferred stock nor adopt any series, preferences or other
classification of preferred stock.
The issuance of shares of preferred stock, or the issuance of
rights to purchase such shares, could be used to discourage an
unsolicited acquisition proposal. For instance, the issuance of a
series of preferred stock might impede a business combination by
including class voting rights that would enable the holder to block
such a transaction, or facilitate a business combination by
including voting rights that would provide a required percentage
vote of the stockholders. In addition, under certain circumstances,
the issuance of preferred stock could adversely affect the voting
power of the holders of the common stock. Although the Board of
Directors is required to make any determination to issue such stock
based on its judgment as to the best interests of the stockholders
of the Company, the Board of Directors could act in a manner that
would discourage an acquisition attempt or other transaction that
some, or a majority, of the stockholders might believe to be in
their best interests or in which stockholders might receive a
premium for their stock over the then market price of such stock.
The Board of Directors does not at present intend to seek
stockholder approval prior to any issuance of currently authorized
stock, unless otherwise required by law or stock exchange rules.
The Company has no present plans to issue any preferred stock.
DIVIDENDS
Dividends, if any, will be contingent upon the Company's
revenues and earnings, if any, capital requirements and financial
conditions. The payment of dividends, if any, will be within the
discretion of the Company's Board of Directors. The Company
presently intends to retain all earnings, if any, for use in its
business operations and accordingly, the Board of Directors does not
anticipate declaring any dividends prior to a business combination.
TRADING OF SECURITIES IN SECONDARY MARKET
The National Securities Market Improvement Act of 1996 limited
the authority of states to impose restrictions upon sales of
securities made pursuant to Sections 4(1) and 4(3) of the Securities
Act of companies which file reports under Sections 13 or 15(d) of
the Exchange Act. Upon effectiveness of this registration
statement, the Company will be required to, and will, file reports
under Section 13 of the Exchange Act. As a result, sales of the
Company's common stock in the secondary market by the holders
thereof may then be made pursuant to Section 4(1) of the Securities
Act (sales other than by an issuer, underwriter or broker) without
qualification under state securities acts.
Following a business combination, a target company will
normally wish to cause the Company's common stock to trade in one or
more United States securities markets. The target company may elect
to take the steps required for such admission to quotation following
the business combination or at some later time.
In order to qualify for listing on the Nasdaq SmallCap Market,
a company must have at least (i) net tangible assets of $4,000,000
or market capitalization of $50,000,000 or net income for two of the
last three years of $750,000; (ii) public float of 1,000,000 shares
with a market value of $5,000,000; (iii) a bid price of $4.00; (iv)
three market makers; (v) 300 shareholders and (vi) an operating
history of one year or, if less than one year, $50,000,000 in market
capitalization. For continued listing on the Nasdaq SmallCap
Market, a company must have at least (i) net tangible assets of
$2,000,000 or market capitalization of $35,000,000 or net income for
two of the last three years of $500,000; (ii) a public float of
500,000 shares with a market value of $1,000,000; (iii) a bid price
of $1.00; (iv) two market makers; and (v) 300 shareholders.
If, after a business combination, the Company does not meet
the qualifications for listing on the Nasdaq SmallCap Market, the
Company may apply for quotation of its securities on the OTC
Bulletin Board. In certain cases the Company may elect to have its
securities initially quoted in the "pink sheets" published by the
National Quotation Bureau, Inc.
To have its securities quoted on the OTC Bulletin Board a
company must:
(1) be a company that reports its current financial
information to the Securities and Exchange Commission, banking
regulators or insurance regulators;
(2) has at least one market maker who completes and files a
Form 211 with NASD Regulation, Inc.
The OTC Bulletin Board is a dealer-driven quotation service.
Unlike the Nasdaq Stock Market, companies cannot directly apply to
be quoted on the OTC Bulletin Board, only market makers can initiate
quotes, and quoted companies do not have to meet any quantitative
financial requirements. Any equity security of a reporting company
not listed on the Nasdaq Stock Market or on a national securities
exchange is eligible.
TRANSFER AGENT
It is anticipated that StockTrans, Inc., Ardmore, Pennsylvania
will act as transfer agent for the common stock of the Company.
PART II
ITEM 1. MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
(A) MARKET PRICE. There is no trading market for the
Company's Common Stock at present and there has been no trading
market to date. There is no assurance that a trading market will
ever develop or, if such a market does develop, that it will
continue.
The Securities and Exchange Commission has adopted Rule 15g-9
which establishes the definition of a "penny stock," for purposes
relevant to the Company, as any equity security that has a market
price of less than $5.00 per share or with an exercise price of less
than $5.00 per share, subject to certain exceptions. For any
transaction involving a penny stock, unless exempt, the rules
require:
(i) that a broker or dealer approve a person's account for
transactions in penny stocks and
(ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased.
In order to approve a person's account for transactions in
penny stocks, the broker or dealer must
(i) obtain financial information and investment experience and
objectives of the person; and
(ii) make a reasonable determination that the transactions in
penny stocks are suitable for that person and that person has
sufficient knowledge and experience in financial matters to be
capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any
transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight
form,
(i) sets forth the basis on which the broker or dealer made
the suitability determination and
(ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure
also has to be made about the risks of investing in penny stocks in
both public offerings and in secondary trading, and about
commissions payable to both the broker-dealer and the registered
representative, current quotations for the securities and the rights
and remedies available to an investor in cases of fraud in penny
stock transactions.
Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and
information on the limited market in penny stocks.
(B) HOLDERS. There is one holder of the Company's Common
Stock. The issued and outstanding shares of the Company's Common
Stock were issued in accordance with the exemptions from
registration afforded by Section 4(2) of the Securities Act of 1933
and Rule 506 promulgated thereunder.
(C) DIVIDENDS. The Company has not paid any dividends to
date, and has no plans to do so in the immediate future.
ITEM 2. LEGAL PROCEEDINGS.
There is no litigation pending or threatened by or against the
Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
The Company has not changed accountants since its formation
and there are no disagreements with the findings of its accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, the Company has sold securities
which were not registered as follows:
Date Name Number of Shares Consideration
June 7, 1999 TPG Capital Corporation 5,000,000 $500
________
Mr. Cassidy is the sole director, controlling shareholder and
president of TPG Capital Corporation. With respect to the sales
made to TPG Capital Corporation, the Company relied upon Section
4(2) of the Securities Act of 1933, as amended and Rule 506
promulgated thereunder.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of
Delaware provides that a certificate of incorporation may contain a
provision eliminating the personal liability of a director to the
corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director provided that such provision shall not
eliminate or limit the liability of a director (i) for any breach of
the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 (relating to liability for unauthorized
acquisitions or redemptions of, or dividends on, capital stock) of
the General Corporation Law of the State of Delaware, or (iv) for
any transaction from which the director derived an improper personal
benefit. The Company's Certificate of Incorporation contains such a
provision.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, MAY BE PERMITTED TO DIRECTORS,
OFFICERS OR PERSONS CONTROLLING THE COMPANY PURSUANT TO THE
FOREGOING PROVISIONS, IT IS THE OPINION OF THE SECURITIES AND
EXCHANGE COMMISSION THAT SUCH INDEMNIFICATION IS AGAINST PUBLIC
POLICY AS EXPRESSED IN THE ACT AND IS THEREFORE UNENFORCEABLE.
PART F/S
FINANCIAL STATEMENTS.
Set forth below are the audited financial statements for the
Company for the period ended June 7, 1999. The following financial
statements are attached to this report and filed as a part thereof.
FORESTAY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
AS OF JUNE 7, 1999
FORESTAY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
PAGE 1 - INDEPENDENT AUDITORS' REPORT
PAGE 2 - BALANCE SHEET AS OF JUNE 7, 1999
PAGE 3 STATEMENT OF OPERATIONS FOR THE PERIOD
FROM JUNE 4, 1999 (INCEPTION) TO JUNE 7, 1999
PAGE 4 STATEMENT OF CHANGES IN STOCKHOLDER'S
EQUITY FOR THE PERIOD FROM JUNE 4, 1999
(INCEPTION) TO JUNE 7, 1999
PAGE 5 STATEMENT OF CASH FLOWS FOR THE PERIOD FROM
JUNE 4, 1999 (INCEPTION) TO JUNE 7, 1999
PAGES 6 8 NOTES TO FINANCIAL STATEMENTS AS OF
JUNE 7, 1999
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of:
Forestay Corporation
(A Development Stage Company)
We have audited the accompanying balance sheet of Forestay Corporation (a
development stage company) as of June 7, 1999 and the related statements of
operations, changes in stockholder's equity and cash flows for the period
from June 4, 1999 (inception) to June 7, 1999. These financial statements
are the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly in
all material respects, the financial position of Forestay Corporation (a
development stage company) as of June 7, 1999, and the results of its
operations and its cash flows for the period from June 4, 1999 (inception)
to June 7, 1999 in conformity with generally accepted accounting principles.
WEINBERG & COMPANY, P.A.
Boca Raton, Florida
June 11, 1999
FORESTAY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF JUNE 7, 1999
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.
2
FORESTAY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM JUNE 4, 1999
(INCEPTION) TO JUNE 7, 1999
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.
3
FORESTAY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN
STOCKHOLDER'S EQUITY
FOR THE PERIOD FROM JUNE 4, 1999
(INCEPTION) TO JUNE 7, 1999
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 June 7, 1999 - - (4,830) (4,830)
BALANCE AT JUNE 7, 1999 $ 500 $ 4,830 $ (4,830) $ 500
See accompanying notes to financial statements.
4
FORESTAY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JUNE 4, 1999
(INCEPTION) TO JUNE 7, 1999
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.
5
FORESTAY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 7, 1999
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. At June 7, 1999, the Company had not yet commenced any
formal business operations, and all activity to date relates to the
Company's formation and proposed fund raising. The Company's fiscal
year end is December 31.
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.
6
FORESTAY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 7, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
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.
7
FORESTAY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 7, 1999
NOTE 2 - STOCKHOLDER'S EQUITY (CONT'D)
C. Additional Paid-In Capital
Additional paid-in capital at June 7, 1999 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 Commission.
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)
8
PART III
ITEM 1. INDEX TO EXHIBITS.
EXHIBIT NUMBER DESCRIPTION
3.1* Certificate of Incorporation
3.2 * By-Laws
3.3 Specimen stock certificate
10.1 Agreement with TPG Capital Corporation
10.2 Lock up agreement
23.1 Consent of Accountants
27* Financial Data Schedule
* Previously filed
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the Registrant caused this Registration Statement to be signed on its behalf
by the undersigned thereunto duly authorized.
FORESTAY CORPORATION
By: /s/ James M. Cassidy
James M. Cassidy, Director and President
October 18, 1999