<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
MARCH 31, 2000.
OR
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION FROM _______ TO ________.
COMMISSION FILE NUMBER 0-29369
MORNING SPLENDOR MANAGEMENT, INC.
----------------------------------------------
(Name of Small Business Issuer in its charter)
Nevada 88-0409146
------------------------------- --------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1105 Terminal Way, Suite 202 Century Park
Reno, Nevada 89502
- ----------------------------------------- -------
(Address of principal executive offices) (Zip code)
N/A
-------------------------------------------------------
(Former name, former address and former fiscal year, if
changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes /X/ No / /
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
At March 31, 2000, there were outstanding 2,100,000 shares of the
Registrant's Common Stock, $.001 par value.
Transitional Small Business Disclosure Format: Yes / / No /X/
<PAGE> 2
PART I
FINANCIAL INFORMATION
Item I. Financial Statements
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
ACCOUNTANT'S LETTER 1
BALANCE SHEET - ASSETS 2
BALANCE SHEET - LIABILITIES AND STOCKHOLDERS' EQUITY 3
STATEMENT OF OPERATIONS 4
STATEMENT OF STOCKHOLDERS' EQUITY 5
STATEMENT OF CASH FLOWS 6
NOTES TO FINANCIAL STATEMENTS 7-11
</TABLE>
<PAGE> 3
INDEPENDENT AUDITORS' REPORT
Board of Directors May 15, 2000
MORNING SPLENDOR MANAGEMENT, INC.
Las Vegas, Nevada
I have audited the accompanying Balance Sheets of MORNING SPLENDOR
MANAGEMENT, INC. (A Development Stage Company), as of March 31, 2000, and
December 31, 1999, and the related statements of stockholders' equity for March
31, 2000, and December 31, 1999, and statements of operations and cash flows for
the three months ending March 31, 2000, and March 31, 1999, and the two years
ended December 31, 1999, and December 31, 1998, and the period December 6, 1996
(inception), to March 31, 2000. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of MORNING SPLENDOR
MANAGEMENT, INC. (A Development Stage Company), as of March 31, 2000, and
December 31, 1999, and the related statements of stockholders' equity for March
31, 2000, and December 31, 1999, and statements of operations and cash flows for
the three months ending March 31, 2000, and March 31, 1999, and the two years
ended December 31, 1999, and December 31, 1998, and the period December 6, 1996
(inception), to March 31, 2000, 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 #5 to the
financial statements, the Company has suffered recurring losses from operations
and has no established source of revenue. This raises substantial doubt about
its ability to continue as a going concern. Management's plan in regard to these
matters is described in Note #5. These financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
- ---------------------------
Barry L. Friedman
Certified Public Accountant
1582 Tulita Drive
Las Vegas, NV 89123
Phone: (702) 361-8414
<PAGE> 4
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
3 MOS. ENDED YEAR ENDED
MAR. 31, 2000 DEC. 31, 1999
------------- -------------
<S> <C> <C>
CURRENT ASSETS $ 0 $ 0
--------- ---------
TOTAL CURRENT ASSETS $ 0 $ 0
--------- ---------
OTHER ASSETS $ 0 $ 0
--------- ---------
TOTAL OTHER ASSETS $ 0 $ 0
--------- ---------
TOTAL ASSETS $ 0 $ 0
--------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements
-2-
<PAGE> 5
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
3 MOS. ENDED YEAR ENDED
MAR. 31, 2000 DEC. 31, 1999
------------- -------------
<S> <C> <C>
CURRENT LIABILITIES
Officers Advances (Note #8) $ 23,026 $ 350
-------- --------
TOTAL CURRENT LIABILITIES $ 23,026 $ 350
-------- --------
STOCKHOLDERS EQUITY (Note #4)
Common stock, $.001 par value
authorized 25,000,000 shares
issued and outstanding at
December 31, 1999 - 2,100,000 shares $ 2,100
March 31, 2000 - 2,100,000 share $ 2,100
Additional paid in Capital 0 0
Accumulated deficit during
the development stage -25,126 -2,450
-------- --------
TOTAL STOCKHOLDERS' EQUITY $-23,026 $ -350
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY $ 0 $ 0
-------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements
-3-
<PAGE> 6
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
DEC. 6,1996
3 MOS ENDED 3 MOS ENDED YEAR ENDED YEAR ENDED (INCEPTION)
MARCH 31, MARCH 31, DEC. 31, DEC. 31, TO MAR. 31,
2000 1999 1999 1998 2000
----------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
REVENUE $ 0 $ 0 $ 0 $ 0 $ 0
---------- ---------- ---------- ---------- ----------
EXPENSES
General, Selling
and Administrative $ 22,676 $ 350 $ 350 $ 0 $ 25,126
---------- ---------- ---------- ---------- ----------
TOTAL EXPENSES $ 22,676 $ 350 $ 350 $ 0 $ 25,126
---------- ---------- ---------- ---------- ----------
Net Profit/Loss (-) $ -22,676 $ -350 $ -350 $ 0 $ -25,126
---------- ---------- ---------- ---------- ----------
Net Profit/Loss(-)
per weighted
share (Note 2) $ -.0108 $ -.0002 $ -.0002 $ NIL $ -.0120
---------- ---------- ---------- ---------- ----------
Weighted average
number of common
shares outstanding 2,100,000 2,100,000 2,100,000 2,100,000 2,100,000
---------- ---------- ---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements
-4-
<PAGE> 7
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
ADDITIONAL ACCUMU-
COMMON STOCK PAID-IN LATED
SHARES AMOUNT CAPITAL DEFICIT
------ ------ ---------- -------
<S> <C> <C> <C> <C>
Balance,
December 31, 1998 21,000 $ 2,100 $ 0 $ -2,100
November 29, 1999
Changed from no par
value to $0.001 -2,079 +2,079
November 29, 1999
Forward stock split
100:1 2,079,000 +2,079 -2,079
Net loss, Year Ended
December 31, 1999 -350
--------- --------- --------- ----------
Balance,
December 31, 1999 2,100,000 $ 2,100 $ 0 $-2,450
Net Loss
January 1, 2000, to
March 31, 2000 -22,676
--------- --------- --------- ----------
Balance,
March 31, 2000 2,100,000 $ 2,100 $ 0 $ -25,126
--------- --------- --------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements
-5-
<PAGE> 8
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
DEC. 6,1996
3 MOS ENDED 3 MOS ENDED YEAR ENDED YEAR ENDED (INCEPTION)
MARCH 31, MARCH 31, DEC. 31, DEC. 31, TO MAR.31,
2000 1999 1999 1998 2000
----------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Cash Flow from
Operating Activities
Net Loss $-22,676 $ -350 $ -350 $ 0 $ -25,126
Adjustment to reconcile
net loss to net cash
provided by operating
activities
Changes in Assets
and Liabilities
Increase in current
Liabilities
Officers Advances +22,676 +350 +350 0 +23,026
-------- ------ ------ ------ --------
Net cash used in
operating Activities $ 0 $ 0 $ 0 $ 0 $ -2,100
Cash Flows from
Investing Activities 0 0 0 0 0
Cash Flows from
Financing Activities
Issuance of Common
Stock 0 0 0 0 +2,100
-------- ------ ------ ------ --------
Net increase
(decrease)
in cash $ 0 $ 0 $ 0 $ 0 $ 0
Cash, beginning
of period 0 0 0 0 0
-------- ------ ------ ------ --------
Cash, end of period $ 0 $ 0 $ 0 $ 0 $ 0
-------- ------ ------ ------ --------
</TABLE>
The accompanying notes are an integral part of these financial statements
-6-
<PAGE> 9
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 20000 and December 31, 1999
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized December 6, 1996, under the laws of the State
of Nevada as Morning Splendor Management, Inc. The Company currently has
no operations and in accordance with SFAS #7, is considered a
development company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
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 and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Cash and equivalents
The Company maintains a cash balance in a non-interest-bearing
bank that currently does not exceed federally insured limits.
For the purpose of the statements of cash flows, all highly
liquid investments with the maturity of three months or less are
considered to be cash equivalents. There are no cash equivalents
as of December 31, 1999, or March 31, 2000.
-7-
<PAGE> 10
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 20000 and December 31, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS #109) "Accounting for Income Taxes". A
deferred tax asset or liability is recorded for all temporary
difference between financial and tax reporting. Deferred tax
expense (benefit) results from the net change during the year of
deferred tax assets and liabilities.
Reporting on Costs of Start-Up Activities
Statement of Position 98-5 ("SOP 98-5"), "Reporting on the Costs
of Start-Up Activities" which provides guidance on the financial
reporting of start-up costs and organization costs. It requires
most costs of start-up activities and organization costs to be
expensed as incurred. With the adoption of SOP 98-5, there has
been little or no effect on the company's financial statements.
Loss Per Share
Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS #128) "Earnings Per
Share". Basic loss per share is computed by dividing losses
available to common stockholders by the weighted average number
of common shares outstanding during the period. Diluted loss per
share reflects per share amounts that would have resulted if
dilative common stock equivalents had been converted to common
stock. As of March 31, 2000, the Company had no dilative common
stock equivalents such as stock options.
Year End
The Company has selected December 31st as its year-end.
-8-
<PAGE> 11
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 20000 and December 31, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Year 2000 Disclosure
The year 2000 issue is the result of computer programs being
written using two digits rather than four to define the
applicable year. Computer programs that have time sensitive
software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in a system failure or
miscalculations causing disruption of normal business
activities. Since the Company currently has no operating
business and does not use any computers, and since it has no
customers, suppliers or other constituents, there are no
material Year 2000 concerns.
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended
March 31, 2000, due to the net loss and no state income tax in
Nevada, the state of the Company's domicile and operations. The
Company's total deferred tax asset as of December 31, 1999, is
as follows:
<TABLE>
<S> <C>
Net operation loss carry forward $ 2,450
Valuation allowance $ 2,450
Net deferred tax asset $ 0
</TABLE>
The federal net operating loss carry forward will expire from 2016 to
2019.
This carry forward may be limited upon the consummation of a business
combination under IRC Section 381.
-9-
<PAGE> 12
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 20000 and December 31, 1999
NOTE 4 - STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of Morning Splendor Management, Inc.
consists of 25,000,000 shares with a par value of $0.001 per share.
Preferred Stock
Morning Splendor Management, Inc. has no preferred stock.
On December 6, 1996, the company issued 21,000 shares of its no par
value common stock in consideration of $2,100 in cash.
On November 29, 1999, the State of Nevada approved the Company's
restated Articles of Incorporation, which increased its capitalization
from 25,000 common shares to 25,000,000 common shares. The no par value
was changed to $0.001.
On November 29, 1999, the Company forward split its common stock 100:1,
thus increasing the number of outstanding common stock shares from
21,000 shares to 2,100,000.
NOTE 5 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates
the realization of assets and liquidation of liabilities in the normal
course of business. However, the Company does not have significant cash
or other material assets, nor does it have an established source of
revenues sufficient to cover its operating costs and to allow it to
continue as a going concern. It is the intent of the Company to seek a
merger with an existing, operating company.
-10-
<PAGE> 13
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 20000 and December 31, 1999
NOTE 6 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. An
officer of the corporation provides office services without charge. Such
costs are immaterial to the financial statements and accordingly, have
not been reflected therein. The officers and directors of the Company
are involved in other business activities and may, in the future, become
involved in other business opportunities. If a specific business
opportunity becomes available, such persons may face a conflict in
selecting between the Company and their other business interests. The
Company has not formulated a policy for the resolution of such
conflicts.
NOTE 7 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
shares of common stock.
NOTE 8 - OFFICERS ADVANCES
While the Company is seeking additional capital through a merger with an
existing company, an officer of the Company has advanced funds on behalf
of the Company to pay for any costs incurred by it. These funds are
interest free.
-11-
<PAGE> 14
Item II. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The Company has not commenced business activities and has no assets or
operations. The Company has not entered into any negotiations to effectuate a
business combination. The Company is dependent upon its officers to meet any de
minimis costs which may occur.
Robert Gonzalez, an officer and director of the Company, has agreed to
provide the necessary funds, without interest, for the Company to comply with
the Securities Exchange Act of 1934, as amended, provided that he is an officer
and director of the Company when the obligation is incurred. All advances are
interest-free.
In addition, since the Company has had no operating history nor any
revenues or earnings from operations, with no significant assets or financial
resources, the Company will in all likelihood sustain operating expenses without
corresponding revenues, at least until the consummation of a business
combination. This may result in the Company incurring a net operating loss which
will increase continuously until the Company can consummate a business
combination with a profitable business opportunity and consummate such a
business combination.
This discussion may contain certain forward looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. Actual
results could differ materially from those forward-looking statements. The
factors that may cause actual results to differ materially is that the Company
has no arrangement, agreement or understanding with respect to engaging in a
merger with, joint venture with or acquisition of, a private or public company
and that there can be no assurance that the Company will be successful in
identifying and evaluating suitable business opportunities or including a
business combination.
Item III. Qualitative and Quantitative Disclosures About Market
Risk.
The Company has neither considered or conducted any research concerning
qualitative and quantitative market risk.
<PAGE> 15
PART II
OTHER INFORMATION
<TABLE>
<S> <C>
Item 1 - Legal Proceedings ............................................. None
Item 2 - Changes in the Rights of the Company's
Security Holders .............................................. None
Item 3 - Defaults by the Company on its
Senior Securities ............................................. None
Item 4 - Submission of Matter to Vote of Security
Holders ....................................................... None
</TABLE>
Item 5 - Other Information
The board held one meeting during the current quarter, including
both regularly scheduled and special meetings and actions by unanimous written
consent.
The board of directors has not established any audit committee.
In addition, the Company does not have any other compensation or executive or
similar committees. The Company will not, in all likelihood, establish any audit
committee until such time as the Company completes a business combination, of
which there can be no assurance. The Company recognizes that an audit committee,
when established, will play a critical role in the financial reporting system of
the Company by overseeing and monitoring management's and the independent
auditors' participation in the financial reporting process. At such time as the
Company establishes an audit committee, its additional disclosures with the
Company's auditors and management may promote investor confidence in the
integrity of the financial reporting process.
Until such time as an audit committee has been established, the
full board of directors will undertake those tasks normally associated with an
audit committee to include, but not by way of limitation, the (i) review and
discussion of the audited financial statements with management, (ii) discussions
with the independent auditors the matters required to be discussed by the
Statement On Auditing Standards No. 61, as may be modified or supplemented, and
(iii) received from the auditors disclosures regarding the auditors'
Independents Standards Board Standard No. 1, as may be modified or supplemented.
The board of directors of the Company, consistent with its intent to
enhance the reliability and credibility of its financial statements, has
submitted the financial statements included in this Form 10-QSB to its
independent auditors prior to the filing of this report. An audit was completed
for the quarter then ended.
<PAGE> 16
Item 6 - Exhibits and Reports on Form 8-K
The following exhibits are filed with this report:
(a) No reports on Form 8-K were filed during the quarter for
which the report is filed.
(b) Financial Data Schedule 27.1.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: May 15, 2000 MORNING SPLENDOR MANAGEMENT, INC.
By: /S/ Robert Gonzalez
-------------------------------------
Robert Gonzalez
President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 23,026
<BONDS> 0
0
0
<COMMON> 2,100
<OTHER-SE> (25,126)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 22,676
<OTHER-EXPENSES> 0
<LOSS-PROVISION> (22,676)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (22,676)
<EPS-BASIC> (.001)
<EPS-DILUTED> (.001)
</TABLE>
