SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
October 26, 1999
Date of Report
(Date of Earliest Event Reported)
TORBAY HOLDINGS, INC.
(Exact Name of Registrant as Specified in its Charter)
Maison Soumarez
Route de Cobo
Castel, Guernsey GY5 7RZ
United Kingdom
(Address of principal executive offices)
011 44 1481 46044
(Registrant's telephone number)
TORBAY ACQUISITION CORPORATION
1504 R Street, N.W.
Washington, D.C. 20009
(Former name and former address)
Delaware 0-25417 98-0213494
(State of other jurisdiction (Commission file (IRS Employer
of incorporation) Number) Identification no.)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) Pursuant to an Agreement and Plan of Merger (the
"Merger Agreement") effective October 26, 1999 Torbay Holdings,
Inc., a Delaware corporation ("Holdings" or the "Company") acquired
all of the outstanding shares of common stock of Torbay Acquisition
Corporation ("TAC") in a transaction in which Holdings was the
surviving company.
The Merger Agreement was adopted by the unanimous consent of
the Board of Directors of TAC and approved by the unanimous consent
of the shareholders of TAC on September 27, 1999. The Merger
Agreement was adopted by the unanimous consent of the Board of
Directors of Holdings on September 27, 1999. The merger was
effected on October 26, 1999 by the filing of a certificate of
merger with the Secretary of State of Delaware.
Prior to the merger, TAC had 5,000,000 shares of common
stock outstanding. By virtue of the merger, Holdings acquired 100%
of the issued and outstanding common stock of TAC.
Prior to the merger, Holdings had an aggregate of 4,850,000
shares of common stock issued and outstanding, and 700,000 shares of
Series 1 Convertible Preferred Stock outstanding.
Each share of Series 1 Convertible Preferred Stock is
convertible into ten shares of common stock of Holdings at such time
or times, if any, that the subsidiary of Holdings, whose common
shares were acquired in exchange for the Series 1 Convertible
Preferred Stock, has returned a net profit to Holdings of $1,000,000
in any one year within five years of issuance of such Series 1
Convertible Preferred Shares. In the event that after such five
year term the Series 1 Convertible Preferred Shares have not been so
converted, each share not then converted shall be automatically
converted into one share of common stock of Holdings. Each share of
Series 1 Convertible Preferred Stock is entitled to one vote on all
matters on which such shareholders are entitled to vote and are
entitled to receive notice of or attend any annual or extraordinary
meeting of shareholders of Holdings.
Following the merger, Holdings had an aggregate of 5,100,000
shares of common stock, and 700,000 shares of Series 1 Convertible
Preferred Stock, outstanding.
Following the merger, Holdings became the successor issuer
to TAC for reporting purposes under the Securities Exchange Act of
1934, as amended. The officers, directors, and bylaws of Holdings
continued without change as the officers, directors, and bylaws of
the successor issuer. See "Management" and "Other Events" herein.
A copy of the Merger Agreement is filed as an exhibit to
this Form 8-K and is incorporated in its entirety herein. The
foregoing description is modified by such reference.
(b) The following table contains information regarding the
shareholdings of Holdings' current directors and executive officers
and those persons or entities who beneficially own more than 5% of
its common stock:
Amount of Common Percent of
Stock Beneficially Common Stock
Name Owned (1) Beneficially
Owned
Colin Peter Gervaise-Brazier 525,000 (2) 10.29%
President, Director
Francis Guy Lewis Askham 50,000 *
Vice President, Director
Alexander Gordon Lane 50,000 *
Secretary, Director
William Thomas Large 119,000 (3) 2.33%
Director
All directors and 744,000 14.59%
executive officers as
a group (4 persons)
Brewin Nominees Ltd. 350,000 6.86%
5 Giltspur Street
London EC1A 9DB
United Kingdom
Armadillo Worldwide Limited 500,000 9.80%
P.O. Box 313, Anson Court
La Route des Camps
St. Martins
Guernsey, Channel Islands
INC Limited 500,000 9.80%
c/o Trident Corporate
Services (Bahamas) Limited
1st Floor, Kings Court
Bay Street
P.O. Box N-3944
Nassau, Bahamas
Direct Trustees Limited 500,000 9.80%
P.O. Box 307
Guernsey GY1 3SH
United Kingdom
D.J. Limited 500,000 (4) 9.80%
10 Queen Street
P.O. Box HM1154
Hamilton HMEX
Bermuda
David G. Jones 750,000 (4) 14.71%
10 Queen Street
P.O. Box HM1154
Hamilton HMEX
Bermuda
Kevin W. Haddon-Harris 770,000 (4) 15.10%
48 Par La Ville Road
Hamilton, Bermuda HM11
Joanna Dorothy Gervaise-Brazier 375,000 7.35%
La Belle Epoque
Les Treacheries
L'Islet St. Sampsons
Guernsey, Channel Islands
GY2 4SN
United Kingdom
Martyn Paul Trebert 500,000 9.80%
Pleinmont, Torteaval
Guernsey, Channel Islands
GY8 0P
United Kingdom
* Less than 1% percent
(1) Based upon 5,100,000 shares outstanding following the
effectiveness of the merger.
(2) Includes 150,000 shares owned by Colin Peter
Gervaise-Brazier and 375,000 shares owned by Joanna Dorothy
Gervaise-Brazier, Mr. Gervaise-Brazier's wife.
(3) Common stock underlying Series 1 Convertible Preferred
Stock. Each share of Series 1 Convertible Preferred Stock
is convertible into ten shares of common stock of Holdings
at such time or times, if any, that the subsidiary of
Holdings, whose common shares were acquired in exchange for
the Series 1 Convertible Preferred Stock, has returned a net
profit to Holdings of $1,000,000 in any one year within five
years of issuance of such Series 1 Convertible Preferred
Shares. In the event that after such five year term the
Series 1 Convertible Preferred Shares have not been so
converted, each share not then converted shall be
automatically converted into one share of common stock of
Holdings. Includes 12,000 shares of Series 1 Convertible
Preferred Stock given by Mr. Large to his minor children.
(4) D.J. Limited is an investment partnership owned 50% each by
David G. Jones and Kevin W. Haddon-Harris. Half of D.J.
Limited's shares are allocated to Mr. Jones' beneficial
ownership and half of D.J Limited's shares are allocated to
Mr. Haddon-Harris. Mr. Haddon-Harris' ownership also
includes 20,000 shares owned by Mr. Haddon-Harris' wife.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) The consideration exchanged pursuant to the Merger
Agreement was negotiated between TAC and Holdings.
In evaluating Holdings as a candidate for the proposed
merger, TAC used criteria such as the value of the assets of
Holdings, particularly its Designer Appliances Ltd. subsidiary, its
product line, including the Telstar I and Telstar II vacuum cleaners
and the Mistral I desktop fan, other proposed products, marketing
research and experience, Holdings's current business operations and
anticipated operations, and Holdings' business name and reputation.
TAC determined that the consideration for the merger was reasonable.
In evaluating TAC as a candidate for the proposed merger,
Holdings used criteria such as TAC's status as a reporting company,
its lack of operating history and lack of potential related
liabilities. Holdings determined that the consideration for the
merger was reasonable.
(b) Holdings intends to continue developing and marketing
its products through its subsidiary Designer Appliances Ltd.
("Designer Appliances") with the further development, marketing, and
distribution of emerging products currently under development.
BUSINESS
Holdings is a development stage company that, through its
subsidiary Designer Appliances, has developed and is preparing to
market household appliances designed to be attractive to a premium,
upscale market. Holdings was incorporated on March 24, 1999 as a
Delaware corporation named Acropolis Acquisition Corporation, which
changed its name to Torbay Holdings, Inc. on July 14, 1999.
Holdings acquired control of all of the common stock of Designer
Appliances Ltd. by an Agreement and Plan of Reorganization dated as
of July 19, 1999 among Holdings, Designer Appliances and the
shareholders of Designer Appliances, who upon the effectiveness of
the reorganization, became shareholders of Holdings.
Management believes that it has identified an underexploited
opportunity in the premium-priced market for household and domestic
appliances, featuring attractively designed exteriors. There is no
assurance that Holdings will be able to successfully manufacture or
market these items.
Management believes that the Company can commence production
and sales within eight weeks after capitalization. The Company
intends to achieve capitalization via a private placement of the
Company's securities. No assurance can be made that the Company
will place any such securities or that production can be commenced.
OPERATIONS
Some 300 units of the Telstar design vacuum cleaner have been
produced for testing and marketing trials. See "Products" herein. The
Company will subcontract component manufacture and initially be
responsible for final product assembly so as to manage product quality.
Management may consider discontinuing using subcontractors to increase
profit margins at an appropriate time.
The Company will operate directly in the United Kingdom with its own
sales team. Potential distributors have been identified to expand this activity
across the European continent. Management believes that contracts may be
finalized when production and payment schedules can be predicted with
reasonable certainty. These distributors will purchase products and bear all
costs of sales and distribution in their territories. Non-critical component
supply of "off the shelf" items will be limited to preferred suppliers of
appropriate components who provide warranties and indemnities for delays
in production and shipping. Management believes that manufacturing
contracts can be finalized when production and payment schedules can be
predicted with reasonable certainty. Critical components such as product
body parts which are specific to the Company's products will be dual
sourced.
The sales objectives are in what is believed to be a niche sector of the
appliance market which addresses the most expensive end of that market.
Sales activity will be focused upon designer retail outlets such as The
Conran Shops, Harrods and Selfridges. No contracts have been entered
into to date, and there is no assurance that any contracts will be entered
into, or if entered into, that any such contracts can be maintained.
PRODUCTS
Telstar I Designer Vacuum Cleaner. A rocket shaped cylinder vacuum
cleaner made of polished aluminum and incorporating the latest in filtration
technology. It is bagless and features the High Efficiency Particle Arrester
(HEPA) medical grade filter that removes the allergens in dirt that are
associated with asthma. It has a large (50ft) cleaning radius that typically
allows for the entire floor of a modern dwelling to be cleaned without
stopping. The Telstar I will be built to British Electrical Approval Board
and German TUV standards, which relate to electrical safety and
manufacturing practices. Manufacturing costs at this time are 100 pounds
per unit and as volume impacts component purchasing this price is
anticipated to reduce to 80-85 pounds. This product is expected to sell for
150 pounds to stores and 300 pounds retail.
Telstar II Designer Vacuum Cleaner/Table. This is the Telstar I vacuum
cleaner with a glass tabletop accessory. This product is designed for an
environment in the modern city flat or home where storage space is at a
premium. The Company may choose to market this product under the name
"Sputnik" or as the "Telstar Space Station." The table top is developed to
working prototype and additional expenditure is planned on tooling and
packaging. This product is expected to sell for 100 to 125 pounds above
the cost of the Telstar I vacuum cleaner. Manufacturing cost estimates are
18 pounds for the cost of the table top.
Mistral I Desktop Fan. This is a desktop fan, cased in polished
aluminum, which utilizes the same "retro" design as the vacuum cleaner that
Designer Appliances has developed. The Mistral I fan is partially developed
and, pending financing, will be completed. Manufacturing cost estimates
are 18 pounds. This product is expected to sell for 60-70 pounds to stores
and retail for 100-125 pounds. The Mistral I fan is expected to be ready for
sale in January 2000.
Other products under development include a toaster, a kettle, space
heaters and heated hearth screens. See "Trademarks" herein.
MAJOR COMPETITORS
The Company believes that there is no cohesive product family in the
United Kingdom and Europe competing with the Company's proposed
product line in the upscale small domestic appliance sector.
Vacuum Cleaners. The Company is not aware of a competitor who
manufactures and sells a vacuum cleaner protected by this design. See
"Trademarks" herein. The Company not aware of a competitor who sells a
vacuum cleaner that converts to a piece of furniture when it is not in use.
For comparison the following table of the Company's product versus
others is provided for the Telstar I vacuum cleaner and other vacuum
cleaners.
Make Model Noise (dB) Cleaning Dirt Weight
Radius Capacity (Kgs)
(liters)
Designer
Appliances Telstar I 67/66 16 m 10 7.6
Electrolux Excellio
Electronic 74 12.5m 4 7.8
Excellio Combi 74 12.5m 4 7.3
Excellio Remote 70 12.5m 4 7.3
Bosch Perfecta 85 72 9.5m 3.2 8.7
Activa 60 75 8.5m 3.8 7.2
Hoover Alpina Filtra N/A 12.5m 4 6.9
Alpina N/A 12.5 4 6.9
Miele S 324I 73 10m 4 8
S 251 73 9.5m 4 7.9
Dyson DCO2 67 9m (est.) 4 (est.) 6.3
All data are taken from manufacturers' published marketing material.
Fans. The market in fans is diverse and is mainly made up of low-cost
plastic modeled products. There is no known dominant player in the United
Kingdom market. The design aesthetic of the Company's product is similar
to that of the Company's vacuum cleaner.
INVENTORY
If and when production and sales are commenced, the Company intends
to stock up to two months' supply of component parts and one week's
worth of finished goods. Currently, the Company has 300 of the Telstar I
vacuum cleaners that it has produced and are not currently being offered for
sale.
RAW MATERIALS
Industry standard items are available from multiple suppliers. Product
specific items are at least dual sourced. However, there can be no assurance
that an adequate supply can be maintained.
SEASONALITY
Sales periods run throughout the year, though a peak cycle of demand is
noted in the spring and autumn months, especially for vacuum cleaners.
Seasonal variations are allowed for and are not considered a critical factor
to the Company's business as this time.
PROPERTY
Holdings has identified a manufacturing facility in the South Manchester
conurbation, United Kingdom, containing approximately 2,500-5,000
square feet, which is expected to accommodate requirements in the first 6-9
months of operation. Additional facilities in the same locality have been
identified in the 4,000 to 5,000 square foot range that will be investigated
with a view to relocation by the beginning of calendar year 2000. These
facilities are anticipated to see the Company through its requirements of the
next three years. Currently, the Company has no facilities, nor any lease or
mortgage obligations with respect to any property.
PATENTS AND TRADEMARKS
The following trademark registrations or applications for registration
have been made with the British patent office. The design for the Telstar I
vacuum cleaner is protected by British registration no. 2066378. The name
"Telstar" is the subject of mark application no. 2 209 241. The name
"Sputnik" is the subject of trademark application no. 2 209 243. The table
top design for the Telstar II, Sputnik or Telstar Space Station, is the subject
of a granted registration of design no. 2082459. The trademark "Mistral"
for the table top fan is also the subject of application no. 2 209 473. The
Company is also considering a trademark registration for its toaster.
LITIGATION
None.
MARKET FOR HOLDINGS'S SECURITIES
There is currently no market for Holdings' securities.
MANAGEMENT
Name Age Title
Colin Peter Gervaise-Brazier 56 Chairman, President, Chief
Executive Officer and Director
Francis Guy Lewis Askham 68 Vice President and Director
Alexander Gordon Lane 58 Secretary and Director
William Thomas Large 44 Director
Colin Peter Gervaise-Brazier has been , Chairman, President, Chief
Executive Officer and a Director of Holdings, has served in such capacities
since September 1999. Mr. Gervaise-Brazier has been a retailing executive
in Great Britain for over 25 years. From October 1995 until September
1999, Mr. Gervaise-Brazier was General Manager of Vale Garage, Ltd., the
G.M. Vauxhall Motors franchise for the Isle of Guernsey. Mr. Gervaise-
Brazier attended Elizabeth College, Guernsey, and also attended senior
management courses at Vauxhall College, Luton, England. Since August
1999, Mr. Gervaise-Brazier has also been Chief Executive Officer and a
director of GS Telecom Ltd., an electronic retailing company whose stock
trades on the NASDAQ Bulletin Board.
Francis Guy Lewis Askham, Vice President and a Director of Holdings,
has served in such capacities since October 1999. Mr. Askham is a
Chartered Accountant and consultant, and continues in such capacities. Mr.
Askham graduated from Hurstpierpoint College, Sussex, England, and is a
Fellow of the Fellow Institute of Chartered Accountants in England and
Wales. Mr. Askham has also served as a director and chairman of Wilshaw
plc since 1991, a director and deputy chairman of Southampton Leisure
Holdings plc since January 1997, a director of GS Telecoms, Inc. since
August 1999, a director of International Energy Group plc, and was
formerly a director of Baldwin plc, M & W plc, and Rhino Group plc, all
located in Great Britain and all of whose securities trade on the London
Stock Exchange.
Alexander Gordon Lane, Secretary and a Director of Holdings, has
served in such capacities since October 1999. Mr. Lane has been a
Financial Consultant since 1998 and continues in such capacity. Mr. Lane
has been in the financial services business for over 30 years. From 1993 to
1998, he was a principal of Intercontinental Exchange Partners, New York,
as a capital markets broker in the interest and foreign exchange areas. Mr.
Lane has an aeronautics degree from Wandsworth Technical College in
London.
William Thomas Large has been a Director of Holdings since July 1999
and President of Designer Appliances since October 1998. From October
1996 until October 1998, Mr. Large was Chairman, Chief Executive
Officer, a director and a major stockholder of DeltaTheta Ltd., a heating
and cooling technology company in Cheshire, England. From February
1997 until September 1998, Mr. Large also served as a director of
DeltaMonitor Ltd, a medical devices company in Cheshire, England. From
December 1996 until June 1997, Mr. Large also served as a director or
SoundAlert Ltd, a company that manufactured emergency vehicle sirens.
From September 1994 until July 1996, Mr. Large was a director of
AromaScan plc, a publicly-listed instrumentation and technology company
in Cheshire, England. Mr. Large graduated from Manchester Metropolitan
University, in Manchester, England, and is the author or co-author of eight
articles and two books relating to biochemical analysis.
EXECUTIVE COMPENSATION
Mr. Gervaise-Brazier's salary is 60,000 pounds per year. He earns no
other remuneration from the Company or its subsidiaries.
Mr. Askham's salary is 12,000 pounds per year. He earns no other
remuneration from the Company or its subsidiaries.
Mr. Lane's salary is 12,000 pounds per year. He earns no other
remuneration from the Company or its subsidiaries.
Mr. Large's salary is 60,000 pounds per year. He is eligible for a
performance bonus of up to 100% of his base salary.
RELATED TRANSACTIONS
Pursuant to a Deed of Assignment of Intellectual Property Rights by
William Thomas Large to Designer Appliances Ltd. dated June 10, 1999,
Mr. Large assigned all of his right, title and interest in and to the design
rights to the vacuum cleaner products, toaster, fan, kettle, space heater and
heated hearth screen products now being developed by the Company. Mr.
Large's consideration for the assignment consisted of 107,000 shares of
Series 1 Convertible Preferred Stock of the Company, valued at 20,000
pounds, and 50,000 pounds in cash to be paid within six months of the date
thereof. The terms of the assignment were not the result of arms' length
negotiations.
RISK FACTORS
HOLDINGS IS CURRENTLY OPERATING AT A LOSS. Holdings has had
no sales or revenues to date. Holdings has maintained its
operations to date through the private placement of $600,000 of its
securities. Its ability to develop operations is dependent upon its
ability to advertise its products and generate sales of its
products. If Holdings is unable to sell sufficient amount of its
products at a sufficiently profitable level, it will need to raise
additional capital through the placement of its securities or from
other debt or equity financing. If the Company is not able to raise
such financing or to obtain alternative sources of funding,
management will be required to curtail operations. There is no
assurance that the Company will be able to continue to operate if a
sufficient level of sales cannot be generated.
HOLDINGS COMMENCED OPERATIONS IN 1999 AND HAS A LIMITED
OPERATING HISTORY. Holdings commenced operations in 1999 and has
only a limited history of operations which to date have not been
profitable. Its operations are subject to the risks and competition
inherent in the establishment of a relatively new business
enterprise. There can be no assurance that future operations will
be profitable. Revenues and profits, if any, will depend upon
various factors, including market acceptance of its concepts, market
awareness, dependability of its distribution network, and general
economic conditions. There is no assurance that Holdings will
achieve its expansion goals and the failure to achieve such goals
would have an adverse impact on it.
HOLDINGS IS ENTERING A COMPETITIVE FIELD. The market for
upscale household appliances is sought by numerous designers,
manufacturers, wholesalers and retailers, which may be better-known
or have a better reputation or distribution network than the
Company. There is no assurance that the Company will find suppliers
and establish a distribution network, or whether its goods will find
a market sufficient to meet its financial obligations.
HOLDINGS HAS A LIMITED ADVERTISING BUDGET. Goods aimed at a
luxury market are often marketed through the media, which charge
concurrently high advertising rates. The Company may not have the
resources available to purchase enough media exposure to find a
market for its products.
THE COMPANY IS DEPENDENT ON ITS SUPPLIERS. The Company
intends to enter into supply contracts with at least two suppliers
for each specific component of its products. However, the Company
currently has no contracts with suppliers, and even if it
establishes such contracts, there can be no assurance that supply
will be timely and meet the Company's requirements. Furthermore,
there can be no assurance that the Company's suppliers will maintain
their relationship with the Company.
THE COMPANY IS DEPENDENT ON RETAIL OUTLETS. The Company
intends to market its products through upscale department stores,
boutiques and designer outlets. However, there can be no assurance
that the Company's marketing staff will be able to persuade retail
outlets to stock the Company's products, what prominence those
outlets will choose in shelving the Company's products, or once
shelved, whether the Company's products will be given a lower
profile in the future.
THE ISSUED PREFERRED STOCK OF HOLDINGS HAS CONVERSION RIGHTS.
Holdings has designated and issued 700,000 shares of Series 1
Convertible Preferred Stock. Each share of Series 1 Convertible
Preferred Stock is convertible into ten shares of common stock of
Holdings at such time or times, if any, that the subsidiary of
Holdings, whose common shares were acquired in exchange for the
Series 1 Convertible Preferred Stock, has returned a net profit to
Holdings of $1,000,000 in any one year within five years of issuance
of such Series 1 Convertible Preferred Shares. In the event that
after such five year term the Series 1 Convertible Preferred Shares
have not been so converted, each share not then converted shall be
automatically converted into one share of common stock of Holdings.
Each share of Series 1 Convertible Preferred Stock shall be entitled
to one vote on all matters on which such shareholders may vote. In
addition, Holdings may, without further action or vote by its
shareholders, designate and issue additional series or shares of
preferred stock. The terms of the Series 1 Convertible Preferred
Stock may adversely affect the equity ownership of the holders of
the common stock and may in turn reduce the value of the common
stock.
TRADEMARK PROTECTION AND PROPRIETARY MARKS.
Notwithstanding the pending registration of certain trade names with
the British Trademark Office, there is no assurance that Holdings
will be able to enforce against use of any of its marks. There is
also no assurance that Holdings will be able to prevent competitors
from using the same or similar names, marks, concepts or appearances
or that it will have the financial resources necessary to protect
its marks against infringing use.
ISSUANCE OF FUTURE SHARES MAY DILUTE INVESTORS' SHARE VALUE.
The Certificate of Incorporation of Holdings authorizes the
issuance of 100,000,000 shares of common stock and 20,000,000 shares
of preferred stock. The future issuance of all or part of the
remaining authorized common stock may result in substantial dilution
in the percentage of the Company's common stock held by its
then-existing shareholders. Moreover, any common stock issued in
the future may be valued on an arbitrary basis by Holdings. The
issuance of the Company's shares for future services or acquisitions
or other corporate actions may have the effect of diluting the value
of the shares held by investors, and might have an adverse effect on
any trading market, should a trading market develop for the
Company's common stock.
CURRENT TRADING MARKET FOR THE COMPANY'S SECURITIES. There
is no current trading market for Holdings's common stock and there
is no assurance that one will develop. TAC had filed a registration
statement on Form 10-SB with the Securities and Exchange Commission
and has been a reporting company under the Securities Exchange Act
of 1934. Holdings has effected the merger with TAC and has become a
successor issuer thereto in order to become a reporting company
under the Securities Exchange Act of 1934, as amended. Holdings
intends to register the common stock owned by its existing
stockholders under the Securities Act of 1933, as amended, in order
to establish a trading market for its common stock on the NASD
Bulletin Board, however, no underwriter for the registration will be
retained, and no market makers have committed to becoming market
makers for the Company's common stock, and there is no assurance
that any market makers will do so. No assurance can be given that
an active trading market in the Company's securities will develop or
be sustained.
PENNY STOCK REGULATION. Upon commencement of trading in the
Company's stock, if such occurs (of which there can be no
assurance) the Company's common stock may be deemed a penny stock.
Penny stocks generally are equity securities with a price of less
than $5.00 per share other than securities registered on certain
national securities exchanges or quoted on the Nasdaq Stock Market,
provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or
system. The Company's securities may be subject to "penny stock
rules" that impose additional sales practice requirements on
broker-dealers who sell such securities to persons other than
established customers and accredited investors (generally those with
assets in excess of $1,000,000 or annual income exceeding $200,000
or $300,000 together with their spouse). For transactions covered
by these rules, the broker-dealer must make a special suitability
determination for the purchase of such securities and have received
the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny
stock, unless exempt, the "penny stock rules" require the delivery,
prior to the transaction, of a disclosure schedule prescribed by the
Commission relating to the penny stock market. The broker-dealer
also must disclose the commissions payable to both the broker-dealer
and the registered representative and current quotations for the
securities. Finally, monthly statements must be sent disclosing
recent price information on the limited market in penny stocks.
Consequently, the "penny stock rules" may restrict the ability of
broker-dealers to sell the Company's securities. The foregoing
required penny stock restrictions will not apply to the Company's
securities if such securities maintain a market price of $5.00 or
greater. There can be no assurance that the price of the Company's
securities will reach or maintain such a level.
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 (the "Year 2000
problem"). Many of the computer programs containing such date
language problems have been corrected by the companies or
governments operating such programs. The Company's operations will
be dependent upon the timely delivery of supplies which deliveries
and production may be delayed or canceled because of such Year 2000
problem computer failures, and by orders and payments by its retail
outlets, which may likewise be delayed or canceled. The Company
does not know what steps, if any, will have been taken by any of its
suppliers or retail outlets in regard to the Year 2000 problems.
The Company's operations will be severally curtailed if one or more
of its suppliers or retail outlets were to suffer Year 2000
problems. Furthermore, it is impossible to predict if the basic
utilities serving the company, or its suppliers or its retail
outlets will continue uninterrupted.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5. OTHER EVENTS
SUCCESSOR ISSUER ELECTION.
Upon effectiveness of the merger, pursuant to Rule 12g-3(a) of the
General Rules and Regulations of the Securities and Exchange Commission,
Holdings became the successor issuer to TAC for reporting purposes under
the Securities Exchange Act of 1934 and elects to reports under the Act
effective Octoboer 26, 1999.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
Not applicable.
ITEM 7. FINANCIAL STATEMENTS
No financial statements are filed herewith. The Registrant shall
file financial statements by amendment hereto not later than 60 days
after the date that this Current Report on Form 8-K is required to
be filed.
ITEM 8. CHANGE IN FISCAL YEAR
Not applicable.
EXHIBITS
2.1 Agreement and Plan of Merger between Torbay Acquisition
Corporation and Torbay Holdings, Inc.
3.1 Certificate of Incorporation of Torbay Holdings, Inc., as
amended
3.2 By-Laws of Torbay Holdings, Inc.
4.1 Certificate of Designation with respect to Series 1
Convertible Preferred Stock of Torbay Holdings, Inc.
10.1* Deed of Assignment of Intellectual Property Rights by W.
Thomas Large to Designer Appliances Ltd. dated June 10, 1999
21.1* List of Subsidiaries of Torbay Holdings, Inc.
24.1* Consent of accountants
27.1* Financial Data Schedule
* To Be Filed By Amendment
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
TORBAY HOLDINGS, INC.
By /s/ Colin Gervaise-Brazier
President, Chairman,
Director
Date: November 9, 1999