U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-SB
General Form for Registration of Securities of
Small Business Issuers
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
Black Stallion Management, Inc.
(Name of Small Business Issuer in Its Charter)
Nevada 88-0409147
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
7432 South Carling Circle, Salt Lake City, Utah 84121
(Address of Principal Executive Offices)
801-944-0701
(Issuer's Telephone Number, Including Area Code)
Title of each class to be so registered: Name of each exhange on which
each class is to be registered
NONE NONE
Securities to be registered under Section 12(b) of the Exchange Act:
Common Stock ($0.001 Par Value)
(Title of class)
Total Number of Pages: 41
Index to Exhibits: Page 20
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <C> <C> <C>
PART I..............................................................................................1
Item 1. Description of Business.....................................................................1
Item 2. Management's Discussion and Analysis or Plan of Operation...................................2
Item 3. Description of Property.....................................................................3
Item 4. Security Ownership of Certain Beneficial Owners and Management..............................3
Item 5. Directors, Executive Officers, Promoters and Control Persons................................4
Change in Control..................................................................4
Item 6. Executive Compensation......................................................................4
Item 7. Certain Relationships and Related Transactions..............................................5
Item 8. Description of Securities...................................................................6
PART II.............................................................................................6
Item 1. Market Price of and Dividends on the Registrant's Common Equity
and Other Shareholder Matters......................................................6
Item 2. Legal Proceedings..................................................................7
Item 3. Changes in and Disagreements with Accountants......................................7
Item 4. Recent Sales of Unregistered Securities............................................7
Item 5. Indemnification of Directors and Officers...................................................8
PART F/S - FINANCIAL STATEMENTS.....................................................................8
PART III - EXHIBITS.................................................................................8
SIGNATURES..........................................................................................8
Index to Exhibits...................................................................................9
</TABLE>
ii
<PAGE>
PART I
Item 1. Description of Business
Black Stallion Management, Inc., a Nevada corporation (the "Company"),
was incorporated in Nevada on July 10, 1996. The Company has no predecessors or
subsidiaries.
Since inception, the Company's primary business has been to identify
and merge with or acquire a viable private organization. The Company currently
has no operations, does not produce any goods or provide any other services and
has no employees, full or part time. In the event the Company is successful in
associating with another entity, that entity's operations shall become those of
the Company.
Engaging in a business combination is sought because it would provide
the Company with revenue from operations. Since the Company has no significant
assets, any business combination the Company may ultimately effect will
necessarily involve the issuance of the Company's common stock, par value $0.001
("Common Stock"), or possibly its preferred stock, par value $0.001 ("Preferred
Stock"). Such an exchange of Common Stock or Preferred Stock would substantially
dilute the existing ownership position of the Company's current shareholders. If
the Company effects a business combination, it may thereafter seek to raise
capital for its business combination partner, which may further dilute current
shareholders' ownership. Given the Company's total lack of cash flow and history
of operating losses, there is a substantial risk that the Company will not be
able to raise the capital necessary to make a subsequent business combination
successful. A business combination may also result in the Company's recruitment
of additional employees.
Only certain entities will be considered for merger or acquisition.
While no exact formula or required set of financial attributes exist and the
Company has no preference for any specific type of entity, general criteria the
Company will consider before entering a merger or acquisition include the
entity's type of business, operating history, audited financial statements and
the personal history of the management. At this time, the Company has not
identified a merger candidate. Moreover, even if the Company is able to identify
a potential merger or acquisition candidate and effect such combination, no
assurances can be given that such transaction will result in an increase in
shareholder value.
A suitable merger or acquisition candidate may be located by one of the
Company's officers, shareholders or other entities. In the event the Company
effects a merger or acquisition, it may compensate the finder of such entity
with some amount of money, securities, or both. No formal agreement exists with
any entity relating to the search for such a candidate.
The Company is hereby registering its common stock, par value $0.001
("Common Stock"), because it hopes to merge with an entity and thereafter have
the Common Stock develop a trading market. A requirement of all stock exchanges
and quotation systems on which the Company may seek to initiate a trading market
in its Common Stock is that such entity be subject to the reporting requirements
of the Exchange Act.
<PAGE>
Any merger or acquisition involving the Company may be subject to
shareholder approval, depending on the structure of such a transaction, and,
upon effectiveness of this registration statement, will be conducted and
disclosed pursuant to section 14 of and form 8-K under the Securities Exchange
Act of 1934 ("Exchange Act"). The Company shall therefore provide such
information to its shareholders and the Securities and Exchange Commission
("Commission") as required.
To the extent the Company is seeking an operating organization with
which to merge, the Company faces substantial competition. There are likely
hundreds of companies that have minimal to no operations that would be
attractive entities into which a private operating entity could merge.
Item 2. Management's Discussion and Analysis or Plan of Operation
Since inception, the Company's business plan has involved merging with
or acquiring an entity that can provide the Company with a basis for successful
operations. Accordingly, no active operations have been undertaken, and thus, no
cash receipts or revenues have been realized and only nominal cash requirements
exist. Those which do exist are being satisfied from a $5,500 loan from Park
Street Investments, Inc., a Utah corporation ("Park Street"), which was obtained
on April 1, 1999, pursuant to a non-recourse Promissory Note bearing 10%
interest until payment in full is due upon maturity on March 31, 2000
("Promissory Note"). A copy of the Promissory Note is attached hereto as Exhibit
6(1) and incorporated herein by reference. To the extent the Company incurs cash
requirements in aggregate exceeding$5,500, it intends on seeking additional
financing from Park Street, who has indicated it may assist the Company's costs
and expenses, although it has not formally agreed to do so. For more information
on Park Street, see Part I, Item 7 - Certain Relationships and Related
Transactions. As of July 15, 1999, the Company had a cash balance of $4,660. For
more information on the Company's financial condition, see Part F/S - Financial
Statements herein.
It is likely that if the Company locates a merger or acquisition
candidate, the Company will be required to issue a substantial number of shares
of its Common Stock to facilitate the planned merger or acquisition. It is
expected that such issuance of shares will substantially dilute the current
shareholders' interests. This type of issuance would almost certainly result in
a change in control of the Company based on equity ownership. Such a transaction
would likely also involve a change in control of management, where the new
shareholders would appoint new officers and directors more intimately
knowledgeable in the affairs of the merged or acquired entity. No assurances
exist that the Company will successfully locate a merger or acquisition
candidate with which it can combine or that if a candidate is located that a
merger or acquisition will be profitable, worthwhile or sustainable.
In the event a merger or acquisition is effected, the Company would be
transformed from an entity with no employees, property or equipment, to a fully
operational entity which will likely have at least several employees, as well as
at least some personal and/or real property. The search for a merger or
acquisition candidate is not limited to any specific field or industry.
<PAGE>
Year 2000 Compliance
The Company has addressed the concerns of potential year 2000 computing
problems, both internally and with external parties and believes that no
significant additional costs will be incurred because of this circumstance. As
virtually no computer hardware or software are currently utilized, the Company
believes it is in compliance with the year 2000 phenomenon and that existing
support agreements are believed adequate to cope with any remaining issues.
Item 3. Description of Property
The nominal amount of office space required by the Company's current
state of operations is provided rent-free at the home of its president, Kari
Cunningham, located at 7432 South Carling Circle, Salt Lake City, Utah 84121. As
the Company has no operations aside from identifying a potential merger
candidate, the Company currently has no property.
In the event a merger or acquisition is effected, the Company expects
to relocate its offices to those of such merged or acquired entity, which office
space may be leased and/or owned and subject to various types of ownership
limitations, such as mortgages or liens.
Item 4. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the
beneficial ownership of the stock of the Company as of July 12, 1999, by each
shareholder who is known by the Company to beneficially own more than 5% of the
outstanding Common Stock, by each director and by all executive officers and
directors as a group. No shares of Preferred Stock have been issued or are
outstanding.
<TABLE>
Name and Address of Amount and Nature of Percent
Title of Class Beneficial Ownership Beneficial Ownership of Class
-------------- -------------------- -------------------- ----------
<S> <C> <C> <C>
Common Stock Ken Kurtz 2,000,000 90.9%
2133 East 9400 South
Sandy, Utah 84093
Common Stock Larry Beck 176,900 8.04%
7865 South Catori Drive
Building B, #206
Sandy, Utah 84070
Common Stock Kari Cunningham 0 0%
7432 South Carling Circle
Salt Lake City, Utah 84121
Common Stock Directors and Executive 0 0%
Officers as a Group
</TABLE>
Item 5. Directors, Executive Officers, Promoters and Control Persons
The Officers and Directors of the Company as of July 16, 1999 are as
follows:
Name Age Position
- --------------- ----- ------------------------------------
Kari Cunningham 32 President, Secretary, Treasurer and Director
Ken Kurtz 31 Control Person
Kari Cunningham has been the Company's president and sole director
since July 10, 1996, shortly after the Company's incorporation. Cunningham is
currently and for the past three years has been a licensed real estate agent
with Collier's CRG and CB Commercial in Salt Lake City, Utah, specializing in
industrial leasing and sales. Prior to that she worked in the aerospace industry
as a mechanical engineer with Allient Tech Systems and Morton Thiokol. Mrs.
Cunningham has a Bachelor of Science degree in Mechanical Engineering from
California State University, Sacramento. Cunningham is expected to serve as the
Company's president and director until such time as the Company effects a merger
or acquisition or until a replacement is elected.
Ken Kurtz has never been named an officer or director of the Company.
He may, however, be deemed to be a control person as a result of his ownership
of shares of the Company's Common Stock which provide for significant influence
and "control" (as defined in Rule 12b-2 of the Exchange Act) over the affairs of
the Company. Kurtz has over twelve years experience in the securities industry.
Over the past five years, his activities have predominantly involved consulting
public and private companies regarding mergers, recapitalizations and other
reorganizations. Mr. Kurtz is, and has been since February 1992, the president,
sole director and sole shareholder of Park Street Investments, Inc., a Utah
corporation. See Part I, Item 7 - Certain Relationships and Related Transactions
for more information on Kurtz and Park Street. Additionally, Mr. Kurtz has
served on the board of directors and as an officer of several publicly held
companies including Hamilton Exploration Co., Inc. in 1995. Currently, Kurtz is
not a director of any reporting companies.
Change in Control
In the event the Company effects a merger or acquisition, the Company
will be required to issue a substantial number of shares of its Common Stock. It
is expected that such issuance of shares will result in a change in control in
shareholder ownership and management of the Company. Incoming shareholders would
be expected to appoint officers and directors more intimately knowledgeable in
the affairs of the merged or acquired entity.
Item 6. Executive Compensation
No compensation in excess of $100,000 was awarded to, earned by, or
paid to any executive officer or director of the Company during the first six
months of 1999 ending June 30, 1999, and the
<PAGE>
fiscal years ended December 31, 1998, 1997 and 1996. The Company's directors
have not received any other remuneration for serving as such. The following
tables describe the compensation of the Company's president for the last three
fiscal years and the first six months of the current fiscal year.
SUMMARY COMPENSATION TABLES
<TABLE>
<CAPTION>
Annual Compensation
<S> <C> <C> <C> <C>
Name and Other Annual
Principal Position Year Salary ($) Bonus ($) Compensation ($)
------------------ ------ ----------- ----------- ---------------------
Kari Cunningham, 1999 -0- $500(1) -0-
President
1998 -0- -0- -0-
1997 -0- -0- -0-
1996 -0- -0- -0-
</TABLE>
<TABLE>
<CAPTION>
Long Term Compensation
<S> <C> <C> <C> <C> <C> <C>
Restricted Securities Underlying LTIP All Other
Name and Stock Options/ Payouts Compensation
Principal Position Year Award(s)($) SARs(#) ($) ($)
------------------ ------ ---------------- ---------------------- ---------- ---------------
Kari Cunningham, 1999 -0- -0- -0- -0-
President
1998 -0- -0- -0- -0-
1997 -0- -0- -0- -0-
1996 -0- -0- -0- -0-
</TABLE>
(1) In March 1999, Kari Cunningham received a $500 bonus for serving as
the Company's president and director since July 1996, and for agreeing to
continue to serve as a director and the president of the Company.
Item 7. Certain Relationships and Related Transactions
Park Street Investments, Inc., a Utah corporation ("Park Street"), is
wholly owned and managed by Ken Kurtz. Park Street loaned the Company $5,500
pursuant to an April 1, 1999 Promissory Note. For more information on the terms
of this note, see Part I, Item 1, or Exhibit 6(1) attached hereto and
incorporated herein by reference.
<PAGE>
Based on his ownership of approximately 90% of the outstanding shares
of the Company's Common Stock, Ken Kurtz may be deemed to control the Company.
Although Kurtz is searching for a merger or acquisition candidate, no formal
agreement or service contract exists between the Company and Kurtz. Kurtz's
authority to negotiate on behalf of the Company stems from his ownership of a
majority of the Company's Common Stock. Any candidate Kurtz may locate or
transaction he may recommend is subject to the approval of the board of
directors and, depending transaction's structure, possibly the Company's
shareholders.
Whoever locates an entity with whom the Company merges or acquires may
receive some amount of consideration; however, no such amount has been
established and will be determined by the new entity and the Company. In the
event some other person or entity is responsible for introducing the Company
with a merger or acquisition candidate, Kurtz may or may not be involved is
assisting with the consummation of such a merger or acquisition. Until a merger
or acquisition candidate is located and a mutually agreed upon transaction is
structured, the amount and type of compensation Kurtz and any other entity
involved may receive will remain subject to negotiation. For more information on
Kurtz, see Part I, Item 4 - Security Ownership of Certain Beneficial Owners and
Management, and Part I, Item 5 - Directors, Executive Officers, Promoters and
Control Persons.
Item 8. Description of Securities
Holders of the Company's Common Stock are entitled to one vote for each
share held of record on all matters submitted to a vote of the security holders.
Subject to preferences that may be applicable to any then outstanding Preferred
Stock, holders of Common Stock are entitled to receive ratably such dividends as
may be declared by the Board of Directors out of funds legally available
therefor. In the event of a liquidation, dissolution or winding up of the
Company, holders of Common Stock are entitled to share ratably in all assets
remaining after payment of liabilities and the liquidation preference of any
other securities. The Common Stock has no preemptive or other subscription
rights. There are no redemption of sinking fund provisions applicable to the
Common Stock. All outstanding shares of Common Stock are duly authorized, fully
paid and non-assessable.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and Other Shareholder Matters
The Company's Common Stock has never traded or been quoted
over-the-counter or on any exchange. However, the Company intends to attempt to
have the Company's Common Stock listed on the NASD OTC Bulletin Board.
On March 5, 1999, the Board of Directors and holders of a majority of
the outstanding shares of Common Stock adopted a resolution to amend the
Articles of Incorporation to (i) effect a 100-for- 1 forward stock split on the
Company's Common Stock, including the total number of shares
<PAGE>
authorized for issuance as well as those issued and outstanding; (ii) establish
a par value for the Common Stock at $0.001 per share; and (iii) authorize a
class of Five Million (5,000,000) shares of preferred stock, par value $0.001.
Prior to this forward split, only Twenty-five Thousand (25,000) shares
of Common Stock, no par value, and no shares of preferred stock were authorized
for issuance. The number of shares issued and outstanding after the 100-for-1
forward stock split increased from Twenty-two Thousand (22,000) to Two Million
Two Hundred Thousand (2,200,000) shares. Fractional shares were rounded up to
the nearest whole number. The change in the number of issued and outstanding
shares of Common Stock was effective March 5, 1999.
Dividends
The Company has not declared any cash dividends since inception and
does not anticipate paying any dividends in the foreseeable future. The payment
of dividends is within the discretion of the Board of Directors and will depend
on the Company's earnings, capital requirements, financial condition and other
relevant factors. The Company currently intends to retain future earnings, if
any, to fund the development and growth of its business.
Record Holders
As of July 14, 1999, there were 2,200,000 shares of the Company's
Common Stock issued and outstanding, held by approximately 36 record holders.
The holders of the Common Stock are entitled to one vote for each share held of
record on all matters submitted to a vote of stockholders. Holders of the Common
Stock have no preemptive rights and no right to convert their Common Stock into
any other securities. There are no redemption or sinking fund provisions
applicable to the Common Stock.
Item 2. Legal Proceedings
The Company is not currently, nor has it ever been, a party to any
pending legal proceedings.
Item 3. Changes in and Disagreements with Accountants
The Company appointed Pritchett, Siler & Hardy, P.C. to audit its
financial statements from inception through June 30, 1999. No other auditor has
ever been retained by the Company.
Item 4. Recent Sales of Unregistered Securities
No securities have been sold by the Company within the past three
years.
<PAGE>
Item 5. Indemnification of Directors and Officers
The Company's Bylaws and certain sections of Nevada Revised Statutes
provide for indemnification of the Company's officers and directors in certain
situations where they might otherwise personally incur liability, judgments,
penalties, fines and expenses in connection with a proceeding or lawsuit to
which they might become parties because of their position with the Company. To
the extent that indemnification may be related to liability arising under the
Securities Act, the Securities and Exchange Commission takes the position that
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
PART F/S - FINANCIAL STATEMENTS
Unless otherwise indicated, the term "Company" refers to Black Stallion
Management, Inc. Audited balance sheets of Company as of June 30, 1999 and 1998,
and the related audited statements of operations, stockholders' equity and cash
flows for the years ended June 30, 1999 and 1998 and from inception on July 10,
1996 through June 30, 1997 and 1999 are attached hereto as Pages 9 through 18
and incorporated herein by this reference..
[THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK]
<PAGE>
BLACK STALLION MANAGEMENT, INC.
[A Development Stage Company]
FINANCIAL STATEMENTS
JUNE 30, 1999 AND 1998
PRITCHETT, SILER & HARDY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
<PAGE>
BLACK STALLION MANAGEMENT, INC.
[A Development Stage Company]
CONTENTS
PAGE
-- Independent Auditors' Report 1
-- Balance Sheets, June 30, 1999 and 1998 2
-- Statements of Operations, for the years ended
June 30, 1999 and 1998 and from inception
on July 10, 1996 through June 30, 1997 and 1999 3
-- Statement of Stockholders' Equity,
from inception on July 10, 1996 through
June 30, 1999 4
-- Statements of Cash Flows, for the years ended
June 30, 1999 and 1998 and from inception
on July 10, 1996 through June 30, 1997 and 1999 5
-- Notes to Financial Statements 6 - 8
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
BLACK STALLION MANAGEMENT, INC.
Salt Lake City, Utah
We have audited the accompanying balance sheets of Black Stallion Management,
Inc. [a development stage company] at June 30, 1999 and 1998, and the related
statements of operations, stockholders' equity and cash flows for the years
ended June 30, 1999 and 1998 and from inception on July 10, 1996 through June
30, 1997 and 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 audits 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 audited by us present fairly, in all
material respects, the financial position of Black Stallion Management, Inc. [a
development stage company] as of June 30, 1999 and 1998, and the results of its
operations and its cash flows for the years ended June 30, 1999 and 1998 and for
the periods from inception through June 30, 1997 and 1999, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 6 to the financial
statements, the Company was only recently formed, has incurred losses since its
inception and has not yet been successful in establishing profitable operations,
raising substantial doubt about its ability to continue as a going concern.
Management's plans in regards to these matters are also described in Note 6. The
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.
/s/ PRITCHETT, SILER & HARDY, P.C.
July 8, 1999
Salt Lake City, Utah
<PAGE>
<TABLE>
<CAPTION>
BLACK STALLION MANAGEMENT, INC.
[A Development Stage Company]
BALANCE SHEETS
ASSETS
<S> <C> <C>
June 30, June 30,
1999 1998
------- -------
CURRENT ASSETS:
Cash in bank .............................................................. $4,660 $ --
------- -------
Total Current Assets ........................................... 4,660 --
------- -------
$4,660 $ --
======= =======
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Notes payable - related party $ 5,500 $ --
Accrued interest - related party 123 --
------- -------
Total Current Liabilities 5,623 --
------- -------
STOCKHOLDERS' DEFICIT:
Preferred stock, $.001 par value
5,000,000 shares authorized,
no shares issued and outstanding -- --
Common stock, $.001 par value,
25,000,000 shares authorized,
2,200,000 shares issued and
outstanding 2,200 2,200
Capital in excess of par value -- --
Deficit accumulated during the
development stage (3,163) (2,200)
------- -------
Total Stockholders' Equity (963) --
------- -------
$ 4,660 $ --
------- -------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BLACK STALLION MANAGEMENT, INC.
[A Development Stage Company]
STATEMENTS OF OPERATIONS
From Inception
on July 10,
For the Years Ended 1996 Through
June 30, June 30,
------------------------ ----------------------
1999 1998 1997 1999
---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
REVENUE $ -- $ -- $ -- $ --
EXPENSES:
General and Administrative (840) -- (2,200) (3,040)
---------- ---------- ---------- ---------
LOSS BEFORE OTHER EXPENSES (840) -- (2,200) (3,040)
OTHER EXPENSES:
Interest Expense (123) -- -- (123)
---------- ---------- ---------- ---------
LOSS BEFORE INCOME TAXES (963) -- (2,200) (3,163)
CURRENT TAX EXPENSE -- -- -- --
DEFERRED TAX EXPENSE - - - -
---------- ---------- ---------- ---------
NET LOSS $ (963) $ - $ (2,200) $ (3,163)
---------- ---------- ---------- ----------
LOSS PER COMMON SHARE $ (.00) $ (.00) $ (.00) $ (.00)
---------- ---------- ---------- ----------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BLACK STALLION MANAGEMENT, INC.
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION ON JULY 10, 1996
THROUGH JUNE 30, 1999
Deficit
Accumulated
Preferred Stock Common Stock Capital in During the
_____________________ _____________________ Excess of Development
Shares Amount Shares Amount Par Value Stage
---------- --------- ---------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, July 10, 1996 - $ - - $ - $ - $ -
Issuance of 2,200,000 shares
common stock for services at
$.001 per share - - 2,200,000 2,200 - -
Net loss for the period ended
June 30, 1997 - - - - - (2,200)
---------- --------- ---------- --------- ---------- -----------
BALANCE, June 30, 1997 - - 2,200,000 2,200 - (2,200)
Net loss for the year ended
June 30, 1998 - - - - - -
---------- --------- ---------- --------- ---------- -----------
BALANCE, June 30, 1998 - - 2,200,000 2,200 - (2,200)
---------- --------- ---------- --------- ---------- -----------
Net loss for the year ended
June 30, 1999 - - - - - (963)
---------- --------- ---------- --------- ---------- -----------
BALANCE, June 30, 1999 - $ - 2,200,000 $ 2,200 $ - $ (3,163)
---------- --------- ---------- --------- ---------- -----------
The accompanying notes are an integral part of this financial statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BLACK STALLION MANAGEMENT, INC.
[A Development Stage Company]
STATEMENT OF CASH FLOWS
From Inception
on July 10,
For the Years Ended 1996 Through
June 30, June 30,
-------------------------- ---------------------------
1999 1998 1997 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Cash Flows Provided by Operating Activities:
Net loss $ (963) $ - $ (2,200) $ (3,163)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Stock issued for services - - 2,200 2,200
Changes is assets and liabilities:
Increase in accrued interest 123 - - 123
---------- ---------- ---------- ----------
Net Cash (Used) by Operating
Activities (840) - - (840)
---------- ---------- ---------- ----------
Cash Flows Provided by Investing Activities: - - - -
---------- ---------- ---------- ----------
Net Cash Provided by Investing
Activities - - - -
---------- ---------- ---------- ----------
Cash Flows Provided by Financing
Activities:
Increase in notes payable - related party 5,500 - - 5,500
---------- ---------- ---------- ----------
Net Cash Provided by Financing
Activities 5,500 - - 5,500
---------- ---------- ---------- ----------
Net Increase in Cash 4,660 - - 4,660
Cash at Beginning of Period - - - -
---------- ---------- ---------- ----------
Cash at End of Period $ 4,660 $ - $ - $ 4,660
---------- ---------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
Supplemental Disclosures of Cash Flow Information:
<S> <C> <C> <C> <C> <C>
Cash paid during the period for:
Interest $ - $ - $ - $ -
Income taxes $ - $ - $ - $ -
</TABLE>
Supplemental Schedule of Noncash Investing and Financing Activities:
For the year ended June 30, 1999:
None
For the year ended June 30, 1998:
None
For the Year ended June 30, 1997
The Company issued 2,200,000 shares of its common stock for services
valued at $2,200.
The accompanying notes are an integral part of these financial statements.
<PAGE>
BLACK STALLION MANAGEMENT, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Black Stallion Management, Inc. (the Company) was organized
under the laws of the State of Nevada on July 10, 1996. The Company has not
commenced planned principal operations and is considered a development
stage company as defined in SFAS No. 7. The Company is seeking potential
business ventures. The Company has, at the present time, not paid any
dividends and any dividends that may be paid in the future will depend upon
the financial requirements of the Company and other relevant factors.
Organization Costs - Organization costs, which reflect amounts expended to
organize the Company, amounted to $2,200 and were expensed during the
period ended June 30, 1997.
Loss Per Share - The computation of loss per share is based on the weighted
average number of shares outstanding during the period presented in
accordance with Statement of Financial Accounting Standards No. 128,
"Earnings Per Share". [See Note 7]
Cash and Cash Equivalents - For purposes of the statement of cash flows,
the Company considers all highly liquid debt investments purchased with a
maturity of three months or less to be cash equivalents.
Accounting Estimates - The preparation of 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, the disclosures of contingent assets and
liabilities at the date of the financial statements, and the reported
amount of revenues and expenses during the reported period. Actual results
could differ from those estimated.
Recently Enacted Accounting Standards - SFAS No. 130, "Reporting
Comprehensive Income", SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information", SFAS No. 132, "Employer's Disclosure
about Pensions and Other Postretirement Benefits", SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities", and SFAS
No. 134, "Accounting for Mortgage-Backed Securities..." were recently
issued. SFAS No. 130, 131, 132, 133 and 134 have no current applicability
to the Company or their effect on the financial statements would not have
been significant.
NOTE 2 - NOTE PAYABLE - RELATED PARTY
As of June 30, 1999 the Company owed a related party $5,500. The note is
due in full on March 31, 2000 and accrues interest at 10% per annum
beginning April 1, 1999. Interest expense of $123 was recorded during the
year ended June 30, 1999.
<PAGE>
BLACK STALLION MANAGEMENT, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - CAPITAL STOCK
Common Stock - During July, 1996, in connection with its organization, the
Company issued 2,200,000 shares of its previously authorized, but unissued
common stock. The amount was issued for services rendered at $2,200 (or
$.001 per share).
Forward Stock Split - On March 5, 1999 the Company approved a 100 for 1
forward stock split. The forward stock split is reflected on a retroactive
basis.
NOTE 4 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes". FASB
109 requires the Company to provide a net deferred tax asset/liability
equal to the expected future tax benefit/expense of temporary reporting
differences between book and tax accounting methods and any available
operating loss or tax credit carryforwards.
The Company has available at June 30, 1999, unused operating loss
carryforwards of approximately $3,163 which may be applied against future
taxable income and which expire in various years through 2018. The amount
of and ultimate realization of the benefits from the operating loss
carryforwards for income tax purposes is dependent, in part, upon the tax
laws in effect, the future earnings of the Company, and other future
events, the effects of which cannot be determined. Because of the
uncertainty surrounding the realization of the loss carryforwards the
Company has established a valuation allowance equal to the amount of the
loss carryforwards and, therefore, no deferred tax asset has been
recognized for the loss carryforwards. The net deferred tax assets are
approximately $1,075 as of June 30, 1999, with an offsetting valuation
allowance at year end of the same amount.
NOTE 5 - RELATED PARTY TRANSACTIONS
Management Compensation - During June 1999, the Company paid directors fees
of $500 payable to an officer/director of the Company.
Office Space - The Company has not had a need to rent office space. An
officer/shareholder of the Company is allowing the Company to use his/her
home as a mailing address, as needed, at no expense to the Company.
NOTE 6 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of
the Company as a going concern. However, the Company was only recently
formed, has incurred losses since its inception and has not yet been
successful in establishing profitable operations. These factors raise
substantial doubt about the ability of the Company to continue as a going
concern. In this regard, management is proposing to raise any necessary
additional funds not provided by operations through additional sales of its
common stock. There is no assurance that the Company will be successful in
raising this additional capital or achieving profitable operations. The
financial statements do not include any adjustments that might result from
the outcome of these uncertainties.
<PAGE>
BLACK STALLION MANAGEMENT, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 7 - LOSS PER SHARE
<TABLE>
<CAPTION>
The following data shows the amounts used in computing loss per share:
From Inception
on July 10,
For the Years Ended 1996 Through
June 30, June 30,
------------------------- -------------------------
1999 1998 1997 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Loss from continuing operations
available to common shareholders
(numerator) $ (963) $ - $ (2,200) $ (3,163)
---------- ---------- ---------- ----------
Weighted average number of
common shares outstanding used
in loss per share for the period
(denominator) 2,200,000 2,200,000 2,200,000 2,200,000
---------- ---------- ---------- ----------
</TABLE>
<PAGE>
PART III - EXHIBITS
Index to Exhibits. Exhibits required to be attached hereto are listed
in the Index to Exhibits beginning on page 9 of this Form 10-SB, which is
incorporated herein by reference.
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.
Black Stallion Management, Inc.
/s/ Kari Cunningham
-------------------------------------
Kari Cunningham, President & Director
<PAGE>
Index to Exhibits
EXHIBIT PAGE
NO. NO. DESCRIPTION
- ---- ----- -------------------
2 A-1 By-laws of the Company.
3 B-1 Articles of Incorporation of the Company,
as amended.
6(1) C-1 April 1, 1999 Promissory Note made by
the Company to the order of Park Street
Investments, Inc.
10 D-1 Consent of Pritchett, Siler & Hardy, P.C.
BYLAWS
OF
BLACK STALLION MANAGEMENT, INC.
A Nevada Corporation
ARTICLE I
Stockholders
Section 1. Annual Meeting. Annual meetings of the stockholders,
commencing with the year 1996, will be held on the 10th day of July each year if
not a legal holiday and, if a legal holiday, then on the next secular day
following or at such other time as may be set by the Board of Directors from
time to time, at which the stockholders shall elect by vote a Board of Directors
and transact such other business as may properly be brought before the meeting.
Section 2. Special Meeting. Special meetings of the stockholders, for
any purpose or purposes, unless otherwise prescribed by statute or by the
Articles of Incorporation, may be called by the President or the Secretary by
resolution of the Board of Directors or at the request in writing of
stockholders owning a majority in amount of the entire capital stock of the
corporation issued and outstanding and entitled to vote. Such request shall
state the purpose of the proposed meeting.
Section 3. Place of Meetings. All annual meetings of the stockholders
shall be held at the registered office of the corporation or at such other place
within or without the State of Nevada as the directors shall determine. Special
meetings of the stockholders may be held at such time and place within or
without the State of Nevada as shall be stated in the notice of the meeting, or
in a duly executed waiver of notice thereof. Business transacted at any special
meeting of stockholders shall be limited to the purposes stated in the notice.
Section 4. Quorum; Adjourned Meetings. The holders of a majority of the
stock issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business except as otherwise provided by
statute or by the Articles of Incorporation. If, however, such quorum shall not
be present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, shall have
the power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified.
Section 5. Voting. Each stockholder of record of the corporation
holding stock which is entitled to vote at this meeting shall be entitled at
each meeting of stockholders to one vote for each share of stock standing in his
name on the books of the corporation. Upon the demand of any stockholder, the
vote for directors and the vote upon any question before the meeting shall be by
ballot.
When a quorum is present or represented at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall be sufficient to elect directors or to decide any
question brought before such meeting, unless the question is one upon which by
express provision of the statutes or of the Articles of
A-1
<PAGE>
Incorporation, a different vote is required in which case such express provision
shall govern and control the decision of such question.
Section 6. Proxies. At any meeting of the stockholders any stockholder
may be represented and vote by a proxy or proxies appointed by an instrument in
writing. In the event that any such instrument in writing shall designate two or
more persons to act as proxies, a majority of such persons present at the
meeting, or, if only one shall be present, then that one shall have and may
exercise all of the powers conferred by such written instrument upon all of the
persons so designated unless the instrument shall otherwise provide. No proxy or
power of attorney to vote shall be used to vote at a meeting of the stockholders
unless it shall have been filed with the secretary of the meeting. All questions
regarding the qualification of voters, the validity of proxies and the
acceptance or rejection of votes shall be decided by the inspectors of election
who shall be appointed by the Board of Directors, or if not so appointed, then
by the presiding officer of the meeting.
Section 7. Action Without Meeting. Any action which may be taken by the
vote of the stockholders at a meeting may be taken without a meeting if
authorized by the written consent of stockholders holding at least a majority of
the voting power, unless the provisions of the statutes or of the Articles of
Incorporation require a greater proportion of voting power to authorize such
action in which case such greater proportion of written consents shall be
required.
ARTICLES II
Directors
Section 1. Management of Corporation. The business of the corporation
shall be managed by its Board of Directors which may exercise all such powers of
the corporation and do all such lawful acts and things as are not by statute or
by the Articles of Incorporation or by these Bylaws directed or required to be
exercised or done by the stockholders.
Section 2. Number, Tenure, and Qualifications. The number of directors
which shall constitute the whole board shall be at least one. The number of
directors may from time to time be increased or decreased to not less than one
nor more than fifteen. The directors shall be elected at the annual meeting of
the stockholders and except as provided in Section 2 of this Article, each
director elected shall hold office until his successor is elected and qualified.
Directors need not be stockholders.
Section 3. Vacancies. Vacancies in the Board of Directors including
those caused by an increase in the number of directors, may be filled by a
majority of the remaining directors, though less than a quorum, or by a sole
remaining director, and each director so elected shall hold office until his
successor is elected at an annual or a special meeting of the stockholders. The
holders of two-thirds of the outstanding shares of stock entitled to vote may at
any time peremptorily terminate the term of office of all or any of the
directors by vote at a meeting called for such purpose or by a written statement
filed with the secretary or, in his absence, with any other officer. Such
removal shall be effective immediately, even if successors are not elected
simultaneously.
A vacancy or vacancies in the Board of Directors shall be deemed to
exist in case of the death, resignation or removal of any directors, or if the
authorized number of directors be increased, or if the stockholders fail at any
annual or special meeting of stockholders at which any director or directors are
elected to elect the full authorized number of directors to be voted for at that
meeting.
A-2
<PAGE>
If the Board of Directors accepts the resignation of a director
tendered to take effect at a future time, the Board or the stockholders shall
have power to elect a successor to take office when the resignation is to become
effective.
No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of his term of office.
Section 4. Annual and Regular Meetings. Regular meetings of the Board
of Directors shall be held at any place within or without the State which has
been designated from time to time by resolution of the Board or by written
consent of all members of the Board. In the absence of such designation regular
meetings shall be held at the registered office of the corporation. Special
meetings of the Board may be held either at a place so designated or at the
registered office.
Regular meetings of the Board of Directors may be held without call or
notice at such time and at such place as shall from time to time be fixed and
determined by the Board of Directors.
Section 5. First Meetings. The first meeting of each newly elected
Board of Directors shall be held immediately following the adjournment of the
meeting of stockholders and at the place thereof. No notice of such meeting
shall be necessary to the directors in order legally to constitute the meeting,
provided, a quorum be present. In the event such meeting is not so held, the
meeting may be held at such time and place as shall be specified in a notice
given as hereinafter provided for special meetings of the Board of Directors.
Section 6. Special Meetings. Special meetings of the Board of Directors
may be called by the Chairman or the President or by any Vice-President or by
any two directors.
Written notice of the time and place of special meetings shall be
delivered personally to each director, or sent to each director by mail or by
other form of written communication, charges prepaid, addressed to him at his
address as it is shown upon the records or if such address is not readily
ascertainable, at the place in which the meetings of the directors are regularly
held. In case such notice is mailed or telegraphed, it shall be deposited in the
United States mail or delivered to the telegraph company at least three (3) days
prior to the time of the holding of the meeting. In case such notice is hand
delivered as above provided, it shall be so delivered at least twenty-four (24)
hours prior to the time of the holding of the meeting. Such mailing,
telegraphing or delivery as above provided shall be due, legal and personal
notice to such director.
Section 7. Business of Meeting. The transactions of any meeting of the
Board of Directors, however called and noticed or wherever held, shall be as
valid as thought had at a meeting duly held after regular call and notice, if a
quorum be present, and if, either before or after the meeting, each of the
directors not present signs a written waiver of notice, or a consent to holding
such meeting, or an approval of the minutes thereof. All such waivers, consents
or approvals shall be filed with the corporate records or made a part of the
minutes of the meeting.
Section 8. Quorum Adjourned Meetings. A majority of the authorized
number of directors shall be necessary to constitute a quorum for the
transaction of business, except to adjourn as hereinafter provided. Every act or
decision done or made by a majority of the directors present at a meeting duly
held at which a quorum is present shall be regarded as the act of the Board of
Directors, unless a greater number be required by law or by the Articles of
Incorporation. Any action of a majority, although not at a regularly called
meeting, and the record thereof, if assented to in writing by all of the other
members of the Board shall be as valid and effective in all respects as if
passed by the Board in regular meeting.
A-3
<PAGE>
A quorum of the directors may adjourn any directors meeting to meet
again at a stated day and hour; provided, however, that in the absence of a
quorum, a majority of the directors present at any directors meeting, either
regular or special, may adjourn from time to time until the time fixed for the
next regular meeting of the Board.
Notice of the time and place of holding an adjourned meeting need not
be given to the absent directors if the time and place be fixed at the meeting
adjourned.
Section 9. Committees. The Board of Directors may, by resolution
adopted by a majority of the whole Board, designate one or more committees of
the Board of Directors, each committee to consist of at least one or more of the
directors of the corporation which, to the extent provided in the resolution,
shall have and may exercise the power of the Board of Directors in the
management of the business and affairs of the corporation and may have power to
authorize the seal of the corporation to be affixed to all papers which may
require it. Such committee or committees shall have such name or names as may be
determined from time to time by the Board of Directors. The members of any such
committee present at any meeting and not disqualified from voting may, whether
or not they constitute a quorum, unanimously appoint another member of the Board
of Directors to act at the meeting in the place of any absent or disqualified
member. At meetings of such committees, a majority of the members or alternate
members shall constitute a quorum for the transaction of business, and the act
of a majority of the members or alternate members at any meeting at which there
is a quorum shall be the act of the committee.
The committees shall keep regular minutes of their proceedings and
report the same to the Board of Directors.
Section 10. Action Without Meeting. Any action required or permitted to
be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if a written consent thereto is signed by all
members of the Board of Directors or of such committee, as the case may be, and
such written consent is filed with the minutes of proceedings of the Board or
committee.
Section 11. Special Compensation. The directors may be paid their
expenses of attendance at each meeting of the Board of Directors and may be paid
a fixed sum for attendance at each meeting of the Board of Directors or a stated
salary as director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like reimbursement and
compensation for attending committee meetings.
ARTICLE III
Notices
Section 1. Notice of Meetings. Notices of meetings shall be in writing
and signed by the President or a Vice-President or the Secretary or an Assistant
Secretary or by such other person or persons as the directors shall designate.
Such notice shall state the purpose or purposes for which the meeting is called
and the time and the place, which may be within or without this State, where it
is to be held. A copy of such notice shall be either delivered personally to or
shall be mailed, postage prepaid, to each stockholder of record entitled to vote
at such meeting not less than ten (10) nor more than sixty (60) days before such
meeting. If mailed, it shall be directed to a stockholder at his address as it
appears upon the records of the corporation and upon such mailing of any such
notice, the service thereof shall be complete and the time of the notice shall
begin to run from the date upon which such notice is deposited in the mail for
transmission to such stockholder. Personal delivery of any such notice to any
officer of a corporation or association, or to any member of a partnership shall
constitute delivery of such notice to such
A-4
<PAGE>
corporation, association or partnership. In the event of the transfer of stock
after delivery of such notice of and prior to the holding of the meeting it
shall not be necessary to deliver or mail notice of the meeting to the
transferee.
Section 2. Effect of Irregularly Called Meetings. Whenever all parties
entitled to vote at any meeting, whether of directors or stockholders, consent,
either by a writing on the records of the meeting or filed with the secretary,
or by presence at such meeting and oral consent entered on the minutes, or by
taking part in the deliberations at such meeting without objection, the doings
of such meeting shall be as valid as if had at a meeting regularly called and
noticed, and at such meeting any business may be transacted which is not
excepted from the written consent or to the consideration of which no objection
for want of notice is made at the time, and if any meeting be irregular for want
of notice or of such consent, provided a quorum was present at such meeting, the
proceedings of said meeting may be ratified and approved and rendered likewise
valid and the irregularity or defect herein waived by a writing signed by all
parties having the right to vote at such meeting; and such consent or approval
of stockholders may be by proxy or attorney, but all such proxies and powers of
attorney must be in writing.
Section 3. Waiver of Notice. Whenever any notice whatever is required
to be given under the provisions of the statutes, of the Articles of
Incorporation or of these Bylaws, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto.
ARTICLE IV
Officers
Section 1. Election. The officers of the corporation shall be chosen by
the Board of Directors and shall be a President, a Secretary and a Treasurer,
none of whom need be directors. Any person may hold two or more offices. The
Board of Directors may appoint a Chairman of the Board, Vice-Chairman of the
Board, one or more vice presidents, assistant treasurers and assistant
secretaries.
Section 2. Chairman of the Board. The Chairman of the Board shall
preside at meetings of the stockholders and the Board of Directors, and shall
see that all orders and resolutions of the Board of Directors are carried into
effect.
Section 3. Vice-Chairman of the Board. The Vice-Chairman shall, in the
absence or disability of the Chairman of the Board, perform the duties and
exercise the powers of the Chairman of the Board and shall perform such other
duties as the Board of Directors may from time to time prescribe.
Section 4. President. The President shall be the chief executive
officer of the corporation and shall have active management of the business of
the corporation. He shall execute on behalf of the corporation all instruments
requiring such execution except to the extent the signing and execution thereof
shall be expressly designated by the Board of Directors to some other officer or
agent of the corporation.
Section 5. Vice-President. The Vice-President shall act under the
direction of the President and in the absence or disability of the President
shall perform the duties and exercise the powers of the President. They shall
perform such other duties and have such other powers as the President or the
Board of Directors may from time to time prescribe. The Board of Directors may
designate one or more Executive Vice-Presidents or may otherwise specify the
order of seniority of the Vice-Presidents. The duties and powers of the
President shall descend to the Vice-Presidents in such specified order of
seniority.
A-5
<PAGE>
Section 6. Secretary. The Secretary shall act under the direction of
the President. Subject to the direction of the President he shall attend all
meetings of the Board of Directors and all meetings of the stockholders and
record the proceedings. He shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the Board of Directors, and shall
perform such other duties as may be prescribed by the President or the Board of
Directors.
Section 7. Assistant Secretaries. The Assistant Secretaries shall act
under the direction of the President. In order of their seniority, unless
otherwise determined by the President or the Board of Directors, they shall, in
the absence or disability of the Secretary, perform the duties and exercise the
powers of the Secretary. They shall perform such other duties and have such
other powers as the President or the Board of Directors may from time to time
prescribe.
Section 8. Treasurer. The Treasurer shall act under the direction of
the President. Subject to the direction of the President he shall have custody
of the corporate fluids and securities and shall keep full and accurate accounts
of receipts and disbursements in books belonging to the corporation and shall
deposit all monies and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the corporation as may be ordered by
the President or the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all his transactions as Treasurer and of the financial condition of the
corporation.
If required by the Board of Directors, he shall give the corporation a
bond in such sum and with such surety or sureties as shall be satisfactory to
the Board of Directors for the faithful performance of the duties of his office
and for the restoration to the corporation, incase of his death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his control belonging
to the corporation.
Section 9. Assistant Treasurers. The Assistant Treasurers in the order
of their seniority, unless otherwise determined by the President or the Board of
Directors, shall, in the absence or disability of the Treasurer, perform the
duties and exercise the powers of the Treasurer. They shall perform such other
duties and have such other powers as the President or the Board of Directors may
from time to time prescribe.
Section 10. Compensation. The salaries and compensation of all officers
of the corporation shall be fixed by the Board of Directors.
Section 11. Removal; Resignation. The officers of the corporation shall
hold office at the pleasure of the Board of Directors. Any officer elected or
appointed by the Board of Directors may be removed at any time by the Board of
Directors. Any vacancy occurring in any office of the corporation by death,
resignation, removal or otherwise shall be filled by the Board of Directors.
ARTICLE V
Capital Stock
Section 1. Certificates. Every stockholder shall be entitled to have a
certificate signed by the President or a Vice-President and the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary of the
corporation, certifying the number of shares owned by him in the corporation. If
the corporation shall be authorized to issue more than one class of stock or
more
A-6
<PAGE>
than one series of any class, the designations, preferences and relative,
participating, optional or other special rights of tile various classes of stock
or series thereof and the qualifications, limitations or restrictions of such
fights, shall be set forth in fall or summarized on the face or back of the
certificate, which the corporation shall issue to represent such stock.
If a certificate is signed (1) by a transfer agent other than the
corporation or its employees or (2) by a registrar other than the corporation or
its employees, the signatures of the officers of the corporation may be
facsimiles. In case any officer who has signed or whose facsimile signature has
been placed upon a certificate shall cease to be such officer before such
certificate is issued, such certificate may be issued with the same effect as
though the person had not ceased to be such officer. The seal of the
corporation, or a facsimile thereof, may, but need not be, affixed to
certificates of stock.
Section 2. Surrendered, Lost or Destroyed Certificates. The Board of
Directors may direct a new certificate or certificates to be issued in place of
any certificate or certificates theretofore issued by the corporation alleged to
have been lost or destroyed upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof require the owner of such lost or destroyed certificate or certificates,
or his legal representative, to advertise the same in such manner as it shall
require and/or give the corporation a bond in such sum as it may direct as
indemnity against any claim that may be made against the corporation with
respect to the certificate alleged to have been lost or destroyed.
Section 3. Replacement Certificates. Upon surrender to the corporation
or the transfer agent of the corporation of a certificate for shares duly
endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, it shall be the duty of the corporation, if it is
satisfied that all provisions of the laws and regulations applicable to the
corporation regarding transfer and ownership of shares have been complied with,
to issue anew certificate to the person entitled thereto, cancel the old
certificate and record the transaction upon its books.
Section 4. Record Date. The Board of Directors may fix in advance a
date not exceeding sixty (60) days nor less than ten (10) days preceding the
date of any meeting of stockholders, or the date for the payment of any
distribution, or the date for the allotment of rights, or the date when any
change or conversion or exchange of capital stock shall go into effect, or a
date in connection with obtaining the consent of stockholders for any purpose,
asa record date for the determination of the stockholders entitled to notice of
and to vote at any such meeting, and any adjournment thereof or entitled to
receive payment of any such distribution, or to give such consent, and in such
case, such stockholders, and only such stockholders as shall be stockholders of
record on the date so fixed, shall be entitled to notice of and to vote at such
meeting, or any adjournment thereof or to receive payment of such distribution,
or to receive such allotment of rights, or to exercise such rights, or to give
such consent, as the case may be, notwithstanding any transfer of any stock on
the books of the corporation after any such record date fixed as aforesaid.
Section 5. Registered Owner. The corporation shall be entitled to
recognize the person registered on its books as the owner of shares to be the
exclusive owner for all purposes including voting and distribution, and the
corporation shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof except as otherwise provided by
the laws of Nevada.
ARTICLE VI
General Provisions
A-7
<PAGE>
Section 1. Registered Office. The registered office of this corporation
shall be in the County of Clark, State of Nevada.
The corporation may also have offices at such other places both within
and without the State of Nevada as the Board of Directors may from time to time
determine or the business of the corporation may require.
Section 2. Distributions. Distributions upon the capital stock of the
corporation, subject to the provisions of the Articles of Incorporation, if any,
may be declared by the Board of Directors at any regular or special meeting,
pursuant to law. Distributions may be paid in cash, in property or in shares of
the capital stock, subject to the provisions of the Articles of Incorporation.
Section 3. Reserves. Before payment of any distribution, there may be
set aside out of any funds of the corporation available for distributions such
sum or sums as the directors from time to time, in their absolute discretion,
think proper as a reserve or reserves to meet contingencies, or for equalizing
distributions or for repairing or maintaining any property of the corporation or
for such other purpose as the directors shall think conducive to the interest of
the corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
Section 4. Checks; Notes. All checks or demands for money and notes of
the corporation shall be signed by such officer or officers or such other person
or persons as the Board of Directors may from time to time designate.
Section 5. Fiscal Year. The fiscal year of the corporation shall be
fixed by resolution of the Board of Directors.
Section 6. Corporate Seal. The corporation may or may not have a
corporate seal, as may from time to time be determined by resolution of the
Board of Directors. If a corporate seal is adopted, it shall have inscribed
thereon the name of the corporation and the words"Corporate Seal" and "Nevada".
The seal may be used by causing it or a facsimile thereof to be impressed or
affixed or in any manner reproduced.
ARTICLE VII
Indemnification
Section 1. Indemnification of Officers and Directors Employees and
Other Persons. Every person who was or is a party or is threatened to be made a
party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he or a
person of whom he is the legal representative is or was a director or officer of
the corporation or is or was serving at the request of the corporation or for
its benefit as a director or officer of another corporation, or as its
representative in a partnership, joint venture, trust or other enterprise, shall
be indemnified and held harmless to the fullest extent legally permissible under
the general corporation law of the State of Nevada from time to time against all
expenses, liability and loss (including attorneys' fees, judgments, fines and
amounts paid or to be paid in settlement) reasonably incurred or suffered by him
in connection therewith. The expenses of officers and directors incurred in
defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding upon receipt of an undertaking by or on behalf of the
director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation. Such right of indemnification shall be a contract
A-8
<PAGE>
right which may be enforced in any manner desired by such person. Such right of
indemnification shall not be exclusive of any other right which such directors,
officers or representatives may have or hereafter acquire and, without limiting
the generality of such statement, they shall be entitled to their respective
rights of indemnification under any bylaw, agreement, vote of stockholders,
provision of law or otherwise, as well as their rights under this Article.
Section 2. Insurance. The Board of Directors may cause the corporation
to purchase and maintain insurance on behalf of any person who is or was a
director or officer of the corporation, or is or was serving at the request of
the corporation as a director or officer of another corporation, or as its
representative in a partnership, joint venture, trust or other enterprise
against any liability asserted against such person and incurred in any such
capacity or arising out of such status, whether or not the corporation would
have the power to indemnify such person.
Section 3. Further Bylaws. The Board of Directors may from time to time
adopt further Bylaws with respect to indemnification and may amend these and
such Bylaws to provide at all times the fullest indemnification permitted by the
General Corporation Law of the State of Nevada.
ARTICLE VIII
Amendments
Section 1. Amendments by Stockholders. The Bylaws may be amended by a
majority vote of all the stock issued and outstanding and entitled to vote for
the election of directors of the stockholders, provided notice of intention to
amend shall have been contained in the notice of the meeting.
Section 2. Amendments by Board of Directors. The Board of Directors by
a majority vote of the whole Board at any meeting may amend these Bylaws,
including Bylaws adopted by the stockholders, but the stockholders may from time
to time specify particular provisions of the Bylaws which shall not be amended
by the Board of Directors.
APPROVED AND ADOPTED this 11th day of July, 1996.
/s/ Kari Cunningham
Kari Cunningham, Secretary
CERTIFICATE OF SECRETARY
I hereby certify that I am the Secretary of Black Stallion Management,
Inc., and that the foregoing Bylaws, constitute the code of Bylaws of Black
Stallion Management, Inc., as duly adopted at a regular meeting of the Board of
Directors of the corporation.
DATED this 11th day of July, 1996.
A-9
ARTICLES OF INCORPORATION
OF
BLACK STALLION MANAGEMENT, INC.
a Nevada corporation
I, the undersigned, being the original incorporator herein named, for
the purpose of forming a corporation under the General Corporation Laws of the
State of Nevada, to do business both within and without the State of Nevada, do
make and filed these Articles of Incorporation, hereby declaring and certifying
that the facts herein stated are true:
ARTICLE I
NAME
The name of the corporation is BLACK STALLION MANAGEMENT, INC.
ARTICLE II
RESIDENT AGENT & REGISTERED OFFICE
Section 2.01. Resident Agent. The name and address of the Resident
Agent for service of process in Nevada Corporate Headquarters, Inc., 5300 West
Sahara, Suite 101, Las Vegas, Nevada 89102. Mailing Address: P.O. Box 27740, Las
Vegas, NV 89126.
Section 2.02. Registered Office. The address of its Registered Office
is 5300 West Sahara, Suite 101, Las Vegas, Nevada 89102.
Section 20.3. Other Offices. The Corporation may also maintain offices
for the transaction of any business at such other places within or without the
State of Nevada as it may from time to time determine. Corporate business of
every kind and nature may be conducted, and meetings of directors and
stockholders held outside the State of Nevada with the same effect as if in the
State of Nevada.
ARTICLE III
PURPOSE
The corporation is organized for the purpose of engaging in any lawful
activity, within or without the State of Nevada.
ARTICLE IV
SHARES OF STOCK
Section 4.01. Number and Class. The total number of shares of
authorized capital stock of the Corporation shall consist of a single class of
twenty-five thousand (25,000) shares of common stock, no par value.
The Common Stock may be issued from time to time without action by the
stockholders. The Common Stock may be issued for such consideration as may be
fixed from time to time by the Board of Directors.
The Board of Directors may issue such shares of Common Stock in one or
more series, with such voting powers, designations, preferences and rights or
qualifications, limitations or restrictions thereof as shall be stated in the
resolution or resolutions adopted by them.
Section 4.02. No Preemptive Rights. Holders of the Common Stock of the
corporation shall not have any preference, preemptive right, or right of
subscription to acquire any shares of the corporation authorized, issued or
sold, or to be authorized, issued or sold, and convertible into shares of the
Corporation, nor to any right of subscription thereto, other than to the extent,
if any, the Board of Directors may determine from time to time.
Section 4.03. Non-Assessability of Shares. The Common Stock of the
corporation, after the amount of the subscription price has been paid, in money,
property or services, as the
B-1
<PAGE>
directors shall determine, shall no ve subject to assessment to pay the debts of
the corporation, nor for any other purpose and no stock issued as fully paid
shall ever be assessable or assessed, and the Articles of Incorporation shall no
be amended in this particular.
ARTICLE V
DIRECTORS
Section 5.01. Governing Board. The members of the Governing Board of
the Corporation shall be styled as directors.
Section 5.02. Initial Board of Directors. The initial Board of
Directors shall consist of one (1) member. The name and address of the initial
member of the Board of Directors is as follows:
NAME ADDRESS
Cort W. Christie P.O. Box 27740
Las Vegas, Nevada 89126
This individual shall as a Director until the first annual meeting of
the stockholders or until his successor(s) shall have been elected and
qualified. Section 5.03. Change in Number of Directors. The number of directors
may be increases or decreased by a duly adopted amendment to the Bylaws of the
corporation.
ARTICLE VI
INCORPORATOR
The name of address of the incorporator is Nevada Corporate
Headquarters, Inc., P.O. Box 27740, Las Vegas, Nevada 89126.
ARTICLE VII
PERIOD OF DURATION
The corporation is to have a perpetual existence.
ARTICLE VIII
DIRECTORS' AND OFFICERS' LIABILITY
A director or officer of the corporation shall not be personally liable
to this corporation or its stockholders for damages for breach of fiduciary duty
as a director or officer, but this Article shall note eliminate or limit the
liability of a director or officer for (i) acts or omissions which involve
intentional misconduct, fraud or a knowing violation of law or (ii) the unlawful
payment of distributions. Any repeal or modification of the Article by the
stockholders of the corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director or
officer of the corporation for acts or omissions prior to such repeal or
modification.
ARTICLE IX
INDEMNITY
Every person who was or is a party to, or is threatened to be made a
party to or is involved in any action, suit or processing, whether civil
criminal administrative or investigative, by reason of the fact that he, or a
person of whom he is the legal representative, is or was a
B-2
<PAGE>
director or officer of the corporation, or is or was serving at the request of
the corporation as a director or officer of another corporation, or as its
representative in a partnership, joint venture, trust or other enterprise, shall
be indemnified and held harmless to the fullest extent legally permissible under
the laws of the State of Nevada from time to time against all expenses,
liability and loss (including attorneys' fees, judgements, fines and amounts
paid or to be paid in settlement) reasonably incurred or suffered by him in
connection therewith. Such right of indemnification shall be a contract right
which may be enforced in any manner desired by such person. The expenses of
officers and directors incurred in defending a civil or criminal action, suit or
proceeding must be paid by the corporation as they are incurred and in advance
of the final disposition of the action, suit or proceeding, upon receipt of an
undertaking by or on behalf of the director or officer to repay the amount if it
is ultimately determined by a court of competent jurisdiction that he is not
entitled to be indemnified by the corporation. Such right of indemnification
shall not be exclusive of any other right which such directors, officers or
representatives may have or hereafter acquire, and without limiting the
generality of such statement, they shall be entitled to their respective rights
of indemnification under any by-law, agreement, vote of stockholders, provision
of law, or otherwise, as well as their rights under this Article.
Without limiting the application of the foregoing, the stockholders or
Board of Directors may adopt by-laws from time to time with respect to
indemnification to provide at all times the fullest indemnification permitted by
the laws of the State of Nevada, and may cause the corporation to purchase and
maintain insurance on behalf of any person who is or was a director or officer
of the corporation or is or was serving at the request of the corporation as
director or officer of another corporation, or as its representative in a
partnership, joint venture, trust or other enterprises against any liability
asserted against such person and incurred in any such capacity or arising out of
such status, whether or not the corporation would have the power to indemnify
such person.
The indemnification provided in this Article shall continue as to a
person who has ceased to be a director, officer, employee or agent, and shall
inure to the benefit of the heirs, executors and administrators of such person.
ARTICLE X
AMENDMENTS
Subject at all times to te express provisions of Section 4.03 which
cannot be amended, this corporation reserves the right to amend, alter, change,
or repeal any provision contained in these Articles of Incorporation or its
Bylaws, in the manner now or hereafter prescribed by statute or by these
Articles of Incorporation or said Bylaws, and all rights conferred upon the
stockholders are granted subject to this reservation.
ARTICLE XI
POWERS OF DIRECTORS
In furtherance and not in limitation of the powers conferred by statute
the Board of Directors is expressly authorized:
(1) Subject to the Bylaws, if any, adopted by the stockholders to make
alter or repeal the Bylaws of the corporation;
(2) To authorize and cause to be executed mortgages and liens, with or
without limit as to amount, upon the real and personal property of the
corporation;
(3) To authorize the guaranty by the corporation of securities,
evidences of indebtedness and obligations of other persons, corporations and
business entities;
(4) To set apart out of any of the funds of the corporation available
for distributions a reserve or reserves for any proper purpose and to abolish
any such reserve;
(5) By resolution, to designate one or more committees, such committee
to consist of at least one director of the corporation, which, to the extent
provided in the resolution or in the
B-3
<PAGE>
Bylaws of the corporation, shall have and may exercise the powers of the Board
of Directors in the management of the business and affairs of the corporation,
and may authorize the seal of the corporation to be affixed to all papers which
may require it. Such committee or committees shall have such name or names as
may be stated in the Bylaws of the corporation or as may be determined from time
to time by resolution adopted by the Board of Directors; and
(6) To authorize the corporation by its officers or agents to exercise
all such powers and to do all such acts and things as may be exercised or done
by the corporation, except and to the extent that any such statute shall require
action by the stockholders of the corporation with regard to the exercising of
any such power or the doing of any such act or thing.
In addition to the powers and authorities hereinbefore or by statute
expressly conferred upon them, the Board of Directors may exercise all such
powers and do all such acts and things as may be exercised or done by the
corporation, except as otherwise provided herein and by law.
B-4
<PAGE>
IN WITNESS WHEREOF, I have hereunto set my hand this 1ST day of JULY,
1996, hereby declaring and certifying that the facts stated herein above are
true.
/s/ Cort W. Christie
Cort W. Christie
(For Nevada Corporate Headquarters, Inc.)
ACKNOWLEDGMENT
STATE OF NEVADA )
) SS.
COUNTY OF CLARK )
On this 1ST day of JULY, 1996, personally appeared before me, a Notary
Public (or judge or other authorized person, as the case may be), CORT W.
CHRISTIE, personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument the person, or the entity upon
behalf of which the person acted, executed the instrument.
(Notary Stamp) /s/ Stacey Chrisman
NOTARY PUBLIC in and for
said County and State
I, NEVADA CORPORATE HEADQUARTERS, INC. hereby accept as Resident Agent for the
previously named Corporation.
JULY 1ST, 1996. /s/ Stacey Chrisman
Office Administrator
B-5
<PAGE>
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(After Issuance of Stock)
Black Stallion Management, Inc.
------------------------------------------------------------------
Name of Corporation
I the undersigned President and Secretary of Black Stallion Management,
Inc. does hereby certify that the Board of Directors and Majority Shareholders
of said corporation at a meeting duly convened, held on the 5th day of March,
1999, adopted a resolution to amend the original articles as follows:
Article IV, Section 4.01 - is hereby amended as follows:
ARTICLE IV
SHARES OF STOCK
Section 4.01 Number and Class. The total number of shares of authorized
capital stock of the Corporation shall consist of two classes: Common Stock in
the amount of twenty million (25,000,000), at $0.001 par value; and Preferred
Stock in the amount of five million (5,000,000), at $0.001 par value.
The Common and Preferred Stock may be issued from time to time without
action by the stockholders. The Common and Preferred Stock may be issued for
such consideration as may be fixed from time to time by the Board of Directors.
The Board of Directors may issue such shares of Common and Preferred
Stock in one or more series, with such voting powers, designations, preferences
and rights or qualifications, limitations or restrictions thereof as shall be
stated in the resolution or resolutions adopted by them.
The number of shares of the corporation outstanding and entitled to
vote on an amendment to the Articles of Incorporation is 22,000 pre-split shares
of Common Stock; that the said change(s) and amendment have been consented to
and approved by a majority vote of the stockholders holding at least a majority
of each class of stock outstanding and entitled to vote thereon.
I further certify the following were duly adopted, authorized and
approved by the Board of Directors on March 5, 1999.
a) The number of shares to be issued and outstanding after the 100-for-one
forward stock split on the Company's issued and outstanding Common
Stock will be approximately 2,200,000 shares.
b) Fractional shares will be rounded up to the nearest whole number.
c) The 100-for-one forward stock split on the Company's Common Stock was
approved by the Board of Directors, thus shareholder approval is not
required.
B-6
<PAGE>
d) The change in number of issued and outstanding shares of Common Stock
of the Company shall be effective March 5, 1999, or immediately upon
filing of this Certificate.
/s/ Kari Cunningham
President and Secretary
State of UT )
) ss.
County of SL )
On the 12th day of April, 1999, personally appeared before me, a Notary
Public, Kari Cunningham, who acknowledged that she executed the above
instrument.
S /s/ Diana Olofson
E Notary Public
A
L
B-7
$5,500.00 Date: April 1, 1999
PROMISSORY NOTE
FOR VALUE RECEIVED, The undersigned, jointly and severally ("Maker"),
promises to pay to Park Street Investments, Inc. ("Holder"), a Utah Corporation,
the principal sum of five thousand five hundred dollars ($5,500.00), together
with interest thereon from April 1, 1999 at the rate of ten percent (10%) per
annum on the unpaid principal.
1. Payments. The principal amount of $5,500.00 and interest of $550.00 on
the principal obligation represented hereby shall be repaid in full at
Maturity on March 31, 2000.
2. Type and Place of Payments. Payments of principal and interest shall be
made in lawful money of the United States of America to the above-named
Holder and mailed to 2133 E.
9400 S., Suite 151, Sandy, Utah 84093.
3. Penalty. Maker shall pay a penalty equal to one percent (1%) of the
current unpaid principal balance due for each month any payment is past
due. Advance payment or payments may be made on the principal or
interest, without penalty or forfeiture. There shall be no penalty for
any prepayment.
4. Default. Upon the occurrence or during the continuance of any one or
more of the events listed below, Holder may, by notice in writing to
the Maker, declare the unpaid balance of the principal and interest on
the Note to be immediately due and payable, and the principal and
interest shall then be immediately due and payable without
presentation, demand, protest, notice of protest, or other notice of
dishonor, all of which are hereby expressly waived by Maker, such
events being as follows:
(a) Default in any portion of the payment of the
principal and interest of this Note when the same
shall become due and payable, unless cured within
five (5) days after notice thereof by Holder or the
holder of such Note to Maker.
(b) Maker shall file a voluntary petition in bankruptcy
or a voluntary petition seeking reorganization, or
shall file an answer admitting the jurisdiction of
the court and any material allegations of an
involuntary petition filed pursuant to bankruptcy or
any form of insolvency, or Maker shall make an
assignment to an agent authorized to liquidate any
part of its assets; or
(e) Death of Maker. In the event of Death of Maker, such
notice of default shall be made to the trustee of
Maker's estate.
5. Attorneys' Fees. Maker shall be responsible to Holder for any costs
incurred by Holder in collecting on the obligation herein including
reasonable attorney's fees.
C-1
<PAGE>
6. Construction. This Note shall be governed by and construed in
accordance with the laws of Utah.
BLACK STALLION MANAGEMENT, INC. ("MAKER")
/s/ Kari Cunningham
Kari Cunningham, President
APPROVED BY:
/s/ Ken Kurtz
Ken Kurtz, President
Park Street Investments, Inc.
C-2
Exhibit 10
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation into the accompanying registration
statement on Form 10-SB, of our report dated July 8, 1999, relating to the June
30, 1999 and 1998 financial statements of Black Stallion Management, Inc.
/s/
PRITCHETT, SILER & HARDY, P.C.
Salt Lake City, Utah
July 16, 1999
D-1
