UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10 - SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL ISSUES
Pursuant to Section 12(b) or (g) of
The Securities Exchange Act of 1934
MERIDIAN HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
COLORADO 52-2133742
(State or Other Jurisdiction of (I. R. S. Employer
Incorporation or Organization) Identification No.)
1601 Centinela Ave, Suite 5
Inglewood, Ca 90302
(Address of principal executive offices)
Registrant's telephone number, including area code:
(310) 215-9816
Securities to be registered pursuant to Section 12(b) of the Act:
COMMON STOCK PAR VALUE $.001
(Title of Class)
An Exhibit Index may be found on page 11 of this Report.
This report contains 11 sequentially numbered pages and inserts.
CROSS-REFERENCE SHEET BETWEEN FORM 10 SB FILING
AND ITEMS OF FORM 10 SB
Item
No.
Item Caption
Location in Filing
1. Description of Business The Company; Business
2. Management's Discussion and Analysis or Plan of Operation
Financial Information
3. Description of Property Property
4. Security Ownership of Certain Beneficial Owners and Management
Principal Stockholders
5. Directors, Executive Officers, Promoters and Control Persons
Management
6. Executive Compensation Executive Compensation
7. Certain Relationships and Related Stockholder Matters
Certain Transactions with Management
8. Legal Proceedings Litigation
9. Market for Common Equity and Related Stockholder Matters
Market for Common Stock
10. Recent Sales of Unregistered Securities
Recent Sales of Securities
11. Description of Securities Description of Capital Stock
12. Indemnification of Directors and Officers
Indemnification
13. Financial Statements Financial Statements
14. Changes in and Disagreements with Accountants Financial Disclosure
Financial Information
15. Financial Statements and Exhibits
Financial Statements: Exhibits
TABLE OF CONTENTS
The Company............................................................Page 4
Business ...................................................................4
Properties .................................................................5
Management .................................................................6
Executive Compensation .....................................................7
Principal Stockholders .....................................................7
Certain Transactions with Management .......................................7
Recent Sales of Securities .................................................7
Description of Capital Stock ...............................................7
Litigation .................................................................8
Indemnification ............................................................8
Financial Information ......................................................9
Audited Financial Statements ..........................................Insert
Signatures ................................................................10
Exhibit Index .............................................................11
THE COMPANY
History and Organization
Meridian Holdings, Inc. (the "Company") is a Colorado corporation organized
on October 13th, 1998. Since incorporation, the Company's activities have
been limited to capital formation. The Company intends to become an Internet
retailer of computer software products. The Company currently maintains
offices at 1601 Centinela Ave, Suite 5, Inglewood, California 90302 and its
telephone number is (310) 215-9816.
BUSINESS
There are over 50,000 computer software programs and related hard-wares on
the market in the United States currently. From this wide selection, the
Company has selected approximately 40,000 software programs and hardware
which it proposes to place into an Electronic Catalogue and thereafter market
through a Web-site on the Internet. In the future, additional software
programs and hardware may be added to the catalogue. When operational, an
on-line customer would be able to browse through the Company's catalogue
and select one or more software programs to purchase. When a program is
identified, the customer may then fill-out an order entry form on-line.
The information required to complete the order form will include details of
the software program and the credit card information for the sale. From
the completed order form, the credit card information may be verified
electronically. Upon verification, the funds will be automatically deposited
into a trust account and the customer will be assigned an electronic
identification number, software to be downloaded onto the customers
hard-drive. For hardware products, the company has established a relationship
with one of the major distributors of computer hardware and software
products, to help fulfill all on-line orders placed through our web-site.
The sales transaction described above for software sales, differs
fundamentally from the traditional software sales mechanism. Typically, when a
software program is sold, whether by direct mail or through an outlet, the
buyer receives a physical copy of the software for install. However, when
the Company's distribution channel is used, the program acquired is
downloaded directly, in real time, to the purchaser's hard-drive from a
copy of the software program stored in the Company's Web-server.
The ability of the Company to introduce the marketing channel as described
above, is predicated on the willingness of the manufacturers of software
programs to enter into distribution/vendor agreements with the Company.
Currently, the Company is not in discussions with nor has it contracted with
any software manufacturers. However, Management reasonably believes that it
will be able to secure and enter into such contracts.
Meridian Holdings, Inc. was founded to capitalize on the opportunity for
on-line retailing. Management believes that software distribution, utilizing
the model set forth herein, is particularly suited to on-line retailing for
several reasons. First, an on-line retailer can offer virtually unlimited
on-line shelf space. Secondly, it can offer its customers a wide range of
products which, hitherto, would have required a large amount of operational
space. Thirdly, serving a global market, on-line retailer realize substantial
economies relative to the traditional software retailer. And, finally, the
software purchaser has the convenience of immediate use of the software
purchased.
Executive Compensation
Pursuant to an oral agreement, the Company's sole director and officer will
not receive any remuneration for his services but will be reimbursed for
expenses, if any, incurred on behalf of the Company. Future compensation
to the officers and or directors will be decided by the Board of Directors.
Such transactions will not be conducted at arm's length.
Employees
The Company is a development stage operation and currently has no employees
other than its sole director and officer. The need for employees and their
availability will be addressed as the Company's operations progress.
(See "RISK FACTORS - Dependence on Management and No Full-time Employees -
Limited Staff for Operations".)
Property
Pursuant to an oral agreement, the Company currently utilizes the office of
its sole shareholder, rent free, on a month-to-month basis. In the future,
the Company may rent its own offices. It has not been determined what
facilities will be needed by the Company.
RISK FACTORS
IN ANALYZING THIS COMPANY, PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER,
AMONG OTHER THINGS, THE FOLLOWING RISK FACTORS:
Development Stage Enterprise. Meridian Holdings, Inc. was recently
incorporated. It has no operational history and has yet to engage in
business of any type. Its operations will, therefore, be subject to the
risks inherent in the establishment of a new business. While management
believes that the Company will be successful in implementing its business
plan as set forth herein, there can be no assurance that the Company will be
able to achieve its goals or to be successful.
Additional Financing Required. As of the date hereof, the Company possesses
working capital of only $6,176. Such an amount will be insufficient to
conduct more than tertiary operations. Accordingly, the Company will require
a significant amount of additional capital, no assurance can be given that
such endeavors will be successful. Even if financing were to become
available, it is likely that the cost of such funds will be high and possibly
prohibitive due to the fact that the Company is a start-up company without a
record of succes. Other obstacles to obtaining additional financing may
arise in the future. Without significant additional capital, the Company is
unlikely to be able to conduct any business. (See "BUSINESS".)
The Impact of Changing Technologies. The Company's operations will utilize
a new and rapidly evolving technology - on line commerce. By the nature of
this business, the Company must continually develop and upgrade its
technology and transaction-processing systems and improve its Web site.
There can be no assurance that the Company will be successful in addressing
these issues and, the failure to do so could have a material adverse effect
on the Company's business. (See "BUSINESS".)
Competition. The Company is new and unseasoned and, therefore, it will
face the inherent difficulties of entering an established field. Numerous
companies with assets and resources significantly greater than those of the
Company will compete with the Company in the marketplace. Further, there is
no assurance that additional, better financed, and more experienced
companies, will not enter the marketplace to compete with the Company.
(See "BUSINESS".)
Control by Management. Mr. Okehie serves as the sole officer and director of
the Company. Serving in multiple capacities, Mr. Okehie exercises an
unusually large amount of control and discretion over the Company's
activities. In addition, Mr. Okehie controls 85% of the Company's stock.
He can, pursuant to Colorado law, elect all of the Company's directors,
appoint its officers and control the Company's affairs and operations.
The Company's Articles of Incorporation do not provide for cumulative voting.
(See "PRINCIPAL STOCKHOLDERS" and "MANAGEMENT".)
Lack of Market Research. The Company has neither conducted nor have others
made available to it the results of any market research pertaining to the
proposed activities of the Company. Therefore, management has no assurances
that a market exists for its proposed business activity. (See "BUSINESS".)
Dependence on Management. The Company's sole officer and director, Mr.
Okehie, has no experience in the business activities in which the Company
intends to engage. Accordingly, potential investors of the securities
offered herein should critically evaluate the information concerning the
Company's management. (See "MANAGEMENT".). Additionally, the management of
the Company will be largely dependent on the active participation of Mr.
Okehie. In the event that the services of Mr. Okehie were not available to
the Company, the Company's ability to achieve its goals as set forth herein
is likely to be severely and adversely affected. The Company does not
maintain key-man insurance nor is there any plan to purchase any such
insurance in the foreseeable future.
No Full-time Employees - Limited Staff for Operations. Mr. Okehie maintains
full-time employment in other activities. Hence, the time he can devote to
the affairs of the Company is necessarily limited. The amount of time Mr.
Okehie will devote to the business of the Company is unlikely to exceed 45
hours per month. Thus, there exists conflicts of interest including, among
other things, time and effort. (See "MANAGEMENT".)
Dividends. No dividend has been paid on the Common Stock since inception and
none is contemplated at any time in the foreseeable future. (See "DIVIDENDS".)
Preferred Stock. The Company is authorized to issue 10,000,000 shares of
Preferred Stock, $.00l par value. The Preferred Stock may be issued in
series from time to time with such designation, rights, preferences and
limitations as the Board of Directors of the Company may determine by
resolution. The potential exists, therefore, that Preferred Stock may be
issued which would grant dividend preferences and liquidation preferences
to preferred stockholders over common stockholders. As of the date of
this has been issued. Unless the nature of a particular transaction and
applicable statutes require such approval, the Board of Directors has the
authority to issue these shares without stockholder approval. The issuance
of Preferred Stock may have the affect of delaying or preventing a change in
control of the Company without any further action by stockholders. There are
no present plans to issue any such shares of stock.
MANAGEMENT
The following sets forth information concerning the directors and officers of
the Company:
Name Positions
Charles Okehie Director, President, Chief Financial Officer
and Secretary
The following sets forth certain biographical information pertaining to the
directors and officers of the Company:
Charles Okehie
Mr. Okehie has served as Director, President, Chief Financial Officer and
Secretary since October 1998. From September 1982 to present, Mr. Okehie has
been working as an engineer with Maryland Highway Administration.
EXECUTIVE COMPENSATION
Pursuant to an oral agreement, the Company's sole director and officer will
not receive any remuneration for his services but will be reimbursed for
expenses, if any, incurred on behalf of the Company. Future compensation to
the officers and or directors will be decided by the Board of Directors.
Such transactions will not be conducted at arm's length.
CERTAIN TRANSACTIONS WITH MANAGEMENT
On October 13, 1998, the Company issued 650,000 shares of its Common Stock,
par value $.001, to its sole shareholder who serves as sole director and
officer of the Company for a total consideration of $3,524.
RECENT SALES OF SECURITIES
On December 5, 1998, the Company began a private stock offering to raise
$35,000 of additional capital. The offering was for 70 units. Each unit
consisted of 5,000 shares of Common Stock at $500 per unit. As of the date
hereof, the Company has received proceeds of $12,000.
PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding ownership of the
Company's Common Stock by each person known by the Company to be the
beneficial owner of more than 10% of the outstanding Common Stock, by each
director and by each executive officer of the Company. All shares are held
beneficially and of record, and each recorded stockholder has sole voting,
investment and dispositive power.
Shares Percentage of
Beneficially Shares
Name Owned Owned
Charles Okehie(1) 650,000 85.0
(1) Director and/or Officer of the Company
MARKET FOR COMMON STOCK
To the best of Management's knowledge and belief, there is no public market
for the Company's securities.
DESCRIPTION OF CAPITAL STOCK
Common Stock
The Company is authorized to issue 50,000,000 shares of Common Stock with a
par value of $.001 per share. There are 770,000 shares of Common Stock
outstanding held by 38 stockholders.
Holders of Common Stock are entitled to one vote per share in each matter to
be decided by stockholders. The Common Stock has no redemption provisions
and the holders thereof have no preemptive rights. Holders of Common Stock
are entitled to receive ratably such dividends, if any, as the Board of
Directors may declare from time to time out of funds legally available
thereof. Upon liquidation of the Company, after provisions for payment of
all of the Company's debts and obligations and outstanding Preferred Stock,
if any, the holders of Common Stock may share ratably in the Company's
assets. The outstanding shares of Common Stock are fully paid and
non-assessable. The shares of Common Stock included in the units offered
hereby, upon payment therefor, will be fully paid and non-assessable.
Preferred Stock
The Company is authorized to issue 10,000,000 shares of Preferred Stock with
a par value of $.001 per share. The Board of Directors is authorized to
divide any or all of the Preferred Stock into series and to fix and
determine the relative rights and preferences of the shares of each series
so established. The Board of Directors, without stockholder approval, could
issue the Preferred Stock with conversion and/or voting rights superior to
those of the Company's shares of Common Stock. No Preferred Stock is
currently outstanding nor is there in effect any Board of Directors' resolution
with respect thereto.
DIVIDENDS
Holders of the shares of Common Stock and Preferred Stock, if any, are
entitled to dividends when, as and if declared by the Board of Directors
out of funds legally available therefor. The Company has not paid any
dividends on its Common Stock and intends to retain earnings, if any, to
finance the development and expansion of its business. Future dividend
policy is subject to the discretion of the Board of Directors and will
depend upon a number of factors, including future earnings, capital
requirements and the financial condition of the Company.
REPORTS
The Company will furnish annual audited financial information to its
stockholders and such other interim reports as Management deems appropriate.
LITIGATION
The Company knows of no litigation pending, threatened or contemplated, or
unsatisfied judgment against it, or any proceedings in which the Company is
a party. The Company knows of no legal actions pending or threatened or
judgment entered against any officer or director of the Company in his
capacity as such.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by the Colorado Corporation Code, the Company's By-laws provide
for the indemnification of any person (including his estate) made or
threatened to be made a party to any suit or proceedings, whether civil or
criminal, by reason of the fact he was a director, or officer of the
corporation or served in the same capacity for another entity at the request
of the Company, against judgements, fines, amounts paid in settlement and
reasonable expenses, including attorney fees actually and necessarily
incurred as a result of such threat, suit or proceeding, or any appeal
therein, to fullest extent permitted by the Colorado Corporate Code.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to officers and directors, the Company
acknowledges that in the opinion of Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Securities
Act of 1933 and is, therefore, unenforceable.
FINANCIAL INFORMATION
Management's Discussion and Analysis of Plan of Operation
Meridian Holdings, Inc. is a Colorado Corporation organized on October 13,
1998. The Company was formed to become an Internet retailer of computer
software and related hardware products. Since incorporation, the Company's
activities have been limited to capital formation.
On October 13, 1998, the Company issued 650,000 shares of its common stock
to its sole officer and director for a consideration of $3,524. On
December 5, 1998, the Company began a private stock offering to raise
$35,000 of additional capital. The offering was for 70 units. Each unit
consisted of 5,000 shares of Common Stock at $500 per unit. As of the date
hereof, the Company has received proceeds of $12,000.
The proceeds of the offering will permit the Company to conduct only
nominal operations. The Company will be required to obtain significant
amounts of additional capital. There can be no assurance that such
additional capital will be made available to the Company or made available
on satisfactory terms. In the absence of such additional capital,
Management may recommend the liquidation of the Company in which event
stockholders will loose any value their investment may have had.
Changes In and Disagreements With Accountants on Accounting and Financial
Disclosure
There has been no change in auditors nor is Management of the Company in
disagreement with its independent auditors regarding any matter of
accounting principles or practices or financial statements disclosure.
EXHIBITS INDEX
Exhibit A Articles of Incorporation
Exhibit B Bylaws of Meridian Holdings, Inc.
MERIDIAN HOLDINGS, INC.
(A Development Stage Company)
AUDITED FINANCIAL STATEMENTS
For the Period
October 13, 1998 to December 31, 1998
MERIDIAN HOLDINGS, INC.
(A Development Stage Company)
October 13, 1998 to December 31, 1998
Table of Contents
TABLE OF CONTENTS 2
BALANCE SHEET 4
STATEMENT OF STOCKHOLDERS' EQUITY 5
STATEMENT OF CASH FLOWS 6
NOTES TO FINANCIAL STATEMENTS 7
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Meridian Holdings, Inc.
We have audited the accompanying balance sheet of Meridian Holdings, Inc.,
a development-stage company, as of December 31, 1998 and the related
statements of stockholders' equity and cash flows for the period October 13
to December 31, 1998. Our responsibility is to express an opinion on these
financial statements based on our audit.
We have 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 Meridian Holdings, Inc.,
as of December 31, 1998 and the results of their operations and their cash
flows for the period October 13 to December 31, 1998 in conformity with
generally-accepted accounting principles.
WILLIAMS AND TUCKER ACCOUNTANCY CORPORATION
Long Beach, California
January 6, 1999
Meridian Holding, Inc.
(A Development Stage Company)
Balance Sheet
December 31, 1998
Assets
Current Assets
Cash $ 6,176
Property, Plant, and Equipment
Net of Accumulated Depreciation (Note 1) 825
Organization Costs (Note 1) 10,524
Total Assets $ 17,524
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable $ 2,000
Stockholders' Equity (Note 2)
Common Stock (50,000,000
shares authorized, par
value $0.001, 650,000 shares
issued and outstanding) 650
Additional Paid in Capital 2,874
Common Stock Subscribed 12,000
Total Stockholders' Equity 15,524
Total Liabilities and Stockholders' Equity $ 17,524
See accompanying notes and independent auditor's report
Meridian Holding, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
For the Period
October 13 to December 31, 1998
Common
Retained Common Paid in Stock
Earnings Stock Capital Subscribed Total
Balance October 13, 1998 $ - $ - $ - $ - $ -
Net Income - -
Common Shares Issued 650 2,874 3,524
Subscribed Shares - 12,000 12,000
Balance December 31, 1998 - 650 2,874 12,000 15,524
Subscribed Shares - - - 18,750 18,750
Balance February 8, 1999
(Filing date unaudited) $ - $ 650 $2,874 $30,750 $34,274
See accompanying notes and independent auditor's report
Meridian Holdings, Inc.
(A Development Stage Company
Statement of Cash Flows
For the Period
October 13, 1998 to December 31, 1998
Cash Flows from Operating Activities
Increase (Decrease) in Accounts Payable 2,000
Cash Provided by Operating Activities 2,000
Investing Activities
Acquisition of Fixed Assets (825)
Organization Costs (10,524)
Net Cash Used by Investing Activities (11,348)
Cash Flows from Financing Activities
Capital Contributions 3,524
Proceeds From Common Stock Subscribed 12,000
Cash Provided by Financing Activities 15,524
Increase (Decrease) in Cash 6,176
Cash Balance October 13, 1998 -
Cash Balance December 31, 1998 $ 6,176
See accompanying notes and independent auditor's report
MERIDIAN HOLDINGS, INC.
Notes to Financial Statements
December 31, 1998
NOTE 1 - Summary of Significant Accounting Policies
This summary of significant accounting policies of Meridia Holdings, Inc.
(the "Company") is presented to assist in understanding the Company's
financial statements. These financial statements and notes are the
representation of the Company's management, which is responsible for the
integrity and objectivity. These accounting policies conform to generally
accepted accounting principles and have been consistently applied in the
preparation of the financial statements
Nature of Operations
The Company was organized under the laws of the State of Colorado and was
incorporated October 13, 1998. Since incorporation, the Company's activities
have been limited to capital formation. The Company intends to become an
Internet retailer of computer software products, when operational. Costs
accumulated during this period have been capitalized and will be amortized
over a sixty month period.
Use of Estimates
Management will use estimates and assumptions in preparing financial
statements (e.g. depreciation). Those estimates and assumptions affect
the reported amounts of assets and liabilities, the disclosure of contingent
assets and liabilities, and reported revenues and expenses.
Fiscal Year
The Company operates on a December 31st year end.
Income Recognition
The Company prepares its financial statements and federal income taxes on
the accrual basis of accounting.
The nature of the business is such that the Company receives stock and other
necessary materials from the customers for processing. As such no
inventories of any significance are maintained.
NOTE 2 - Capitalization
The Company is authorized to issue 10,000,000 shares of Preferred Stock, per
value $.001, and 50,000,000 shares of Common Stock, par value $.001. 650,000
shares of Common Stock were issued for cash consideration of $3,524.
As of December 31, 1998 the Company has received $12,000 cash and a
Receivable for $900 in consideration for 129,000 shares.
Proceeds have been used by the Company primarily for offering costs and the
acquisition of equipment and resources to support it's intended operations.
NOTE 3 - Subsequent Events
Subsequent to the balance sheet of December 31, 1998 and additional 187,500
common shares were subscribed in consideration for cash and services performed
in the amount of $18,750. Total shares subscribed as of February 8, 1999 were
307,500 shares in addition to 650,000 common shares issued and outstanding.
Total shares commited and/or outstanding as of February 8, 1999 were 957,500.
EXHIBITS INDEX
Exhibit A Articles of Incorporation
Exhibit B Bylaws of Meridian Holdings, Inc
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