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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
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FORM 10-SB
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GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(g) of
The Securities Exchange Act of 1934
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MORNING SPLENDOR MANAGEMENT, INC.
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(Name of Small Business Issuer in its charter)
Nevada 88-0409146
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1105 Terminal Way, Suite 202 Century Park
Reno, Nevada 89502
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(Address of principal executive offices) (Zip code)
Issuer's telephone number: (775) 348-5708
Securities to be registered pursuant to Section 12(b) of the Act:
none
Securities to be registered pursuant to Section 12(g) of the Act:
$.001 Common Stock
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(Title of Class)
Page One of 66 Pages
Exhibit Index is Located at Page 38.
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TABLE OF CONTENTS
Page
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PART I
Item 1. Description of Business . . . . . . . . . . . . . . . 3
Item 2. Plan of Operation. . . . . . . . . . . . . . . . . . . 8
Item 3. Description of Property. . . . . . . . . . . . . . . . 14
Item 4. Security Ownership of Certain
Beneficial Owners and Management . . . . . . . . . . 14
Item 5. Directors, Executive Officers, Promoters
and Control Persons. . . . . . . . . . . . . . . . . 16
Item 6. Executive Compensation . . . . . . . . . . . . . . . . 18
Item 7. Certain Relationships and
Related Transactions. . . . . . . . . . . . . . . . 19
Item 8. Description of Securities. . . . . . . . . . . . . . . 19
PART II
Item 1. Market for Common Equities and Related Stockholder
Matters . . . . . . . . . . . . . .. . . . . . . . . 20
Item 2. Legal Proceedings. . . . . . . . . . . . . . . . . . . 22
Item 3. Changes in and Disagreements with Accountants. . . . . 23
Item 4. Recent Sales of Unregistered Securities. . . . . . . . 23
Item 5. Indemnification of Directors and Officers. . . . . . . 24
PART F/S
Financial Statements . . . . . . . . . . . . . . . . . 25
PART III
Item 1. Index to Exhibits. . . . . . . . . . . . . . . . . . . 38
Signatures. . . . . . . . . . . . . . . . . . . . . . . 38
2.
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PART I
Item 1. Description of Business
Morning Splendor Management, Inc. (the "Company") was incorporated on
December 6, 1996 under the laws of the State of Nevada to engage in any lawful
corporate activity, including, but not limited to, selected mergers and
acquisitions. The Company has been in the developmental stage since inception
and has no operations to date. Other than issuing shares to its original
shareholders, the Company never commenced any operational activities. As such,
the Company can be defined as a "shell" company, whose sole purpose at this time
is to locate and consummate a merger or acquisition with a private entity. The
Board of Directors of the Company has elected to commence implementation of the
Company's principal business purpose described below under "Item 2 - Plan of
Operation." The proposed business activities described herein may classify the
Company as a "blank check" company.
The Company is filing this registration statement on a voluntary basis
because the primary attraction of the Company as a merger partner or acquisition
vehicle will be its status as a public company. Any business combination or
transaction will likely result in a significant issuance of shares and
substantial dilution to present stockholders of the Company.
In addition, the Company is filing this registration statement to enhance
investor protection and to provide information if a trading market commences. On
December 11, 1997, the National Association of Securities Dealers, Inc. (NASD)
announced that its Board of Governors had approved a series of proposed changes
for the Over The Counter ("OTC") Bulletin Board and the OTC market. The
principal changes, which was approved by the Securities and Exchange Commission
on or about January 5, 1999 allows only those companies that report their
current financial information to the Securities and Exchange Commission,
banking, or insurance regulators to be quoted on the OTC Bulletin Board. The
rule provides for a phase-in period for those securities already quoted on the
OTC Bulletin Board.
Risk Factors
The Company's business is subject to numerous risk factors, including the
following:
1. No Operating History or Revenue and Minimal Assets. The Company has had
no operating history nor any revenues or earnings from operations. The Company
has no significant assets or financial resources. The Company 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
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operating loss which will increase continuously until the Company can consummate
a business combination with a profitable business opportunity. There is no
assurance that the Company can identify such a business opportunity and
consummate such a business combination.
2. The Company's Proposed Operations is Speculative. The success of the
Company's proposed plan of operation will depend to a great extent on the
operations, financial condition and management of the identified business
opportunity. While management intends to seek business combination(s) with
entities having established operating histories, there can be no assurance that
the Company will be successful in locating candidates meeting such criteria. In
the event the Company completes a business combination, of which there can be no
assurance, the success of the Company's operations may be dependent upon
management of the successor firm or venture partner firm and numerous other
factors beyond the Company's control.
3. Scarcity of and Competition for Business Opportunities and Combinations.
The Company is and will continue to be an insignificant participant in the
business of seeking mergers with, joint ventures with and acquisitions of small
private and public entities. A large number of established and well-financed
entities, including venture capital firms, are active in mergers and
acquisitions of companies which may be desirable target candidates for the
Company. Nearly all such entities have significantly greater financial
resources, technical expertise and managerial capabilities than the Company and,
consequently, the Company will be at a competitive disadvantage in identifying
possible business opportunities and successfully completing a business
combination. Moreover, the Company will also compete in seeking merger or
acquisition candidates with numerous other small public companies.
4. The Company has No Agreement for a Business Combination or Other
Transaction - No Standards for Business Combination. 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 entity. There
can be no assurance the Company will be successful in identifying and evaluating
suitable business opportunities or in concluding a business combination.
Management has not identified any particular industry or specific business
within an industry for evaluation by the Company. There is no assurance the
Company will be able to negotiate a business combination on terms favorable to
the Company. The Company has not established a specific length of operating
history or a specified level of earnings, assets, net worth or other criteria
which it will require a target business opportunity to have achieved, and
without which the Company would not consider a business combination in any form
with such business opportunity. Accordingly, the Company may enter into a
business combination with a business opportunity having no significant operating
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history, losses, limited or no potential for earnings, limited assets, negative
net worth or other negative characteristics.
5. Continued Management Control, Limited Time Availability. While seeking a
business combination, management anticipates devoting up to ten hours per month
to the business of the Company. None of the Company's officers has entered into
a written employment agreement with the Company and none is expected to do so in
the foreseeable future. The Company has not obtained key man life insurance on
any of its officers or directors. Notwithstanding the combined limited
experience and time commitment of management, loss of the services of any of
these individuals would adversely affect development of the Company's business
and its likelihood of continuing operations. See "Item 5 - Directors, Executive
Officers, Promoters and Control Persons."
6. There May be Conflicts of Interest. Officers and directors of the
Company may in the future participate in business ventures which could be deemed
to compete directly with the Company. Additional conflicts of interest and
non-arms length transactions may also arise in the future in the event the
Company's officers or directors are involved in the management of any firm with
which the Company transacts business. Management has adopted a policy that the
Company will not seek a merger with, or acquisition of, any entity in which
management serve as officers, directors or partners, or in which they or their
family members own or hold any ownership interest.
7. Reporting Requirements May Delay or Preclude Acquisitions. Sections 13
and 15(d) of the Securities Exchange Act of 1934 (the "1934 Act"), require
companies subject thereto to provide certain information about significant
acquisitions, including certified financial statements for the company acquired,
covering one, two, or three years, depending on the relative size of the
acquisition. The time and additional costs that may be incurred by some target
entities to prepare such statements may significantly delay or essentially
preclude consummation of an otherwise desirable acquisition by the Company.
Acquisition prospects that do not have or are unable to obtain the required
audited statements may not be appropriate for acquisition so long as the
reporting requirements of the 1934 Act are applicable.
8. Lack of Market Research or Marketing Organization. The Company has
neither conducted, nor have others made available to it, results of market
research indicating that market demand exists for the transactions contemplated
by the Company. Moreover, the Company does not have, and does not plan to
establish, a marketing organization. Even in the event demand is identified for
a merger or acquisition contemplated by the Company, there is no assurance the
Company will be successful in completing any such business combination.
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9. Lack of Diversification. The Company's proposed operations, even if
successful, will in all likelihood result in the Company engaging in a business
combination with a business opportunity. Consequently, the Company's activities
may be limited to those engaged in by business opportunities which the Company
merges with or acquires. The Company's inability to diversify its activities
into a number of areas may subject the Company to economic fluctuations within a
particular business or industry and therefore increase the risks associated with
the Company's operations.
10. Regulation. Although the Company will be subject to regulation under
the 1934 Act, management believes the Company will not be subject to regulation
under the Investment Company Act of 1940, insofar as the Company will not be
engaged in the business of investing or trading in securities. In the event the
Company engages in business combinations which result in the Company holding
passive investment interests in a number of entities, the Company could be
subject to regulation under the Investment Company Act of 1940. In such event,
the Company would be required to register as an investment company and could be
expected to incur significant registration and compliance costs. The Company has
obtained no formal determination from the Securities and Exchange Commission as
to the status of the Company under the Investment Company Act of 1940 and,
consequently, any violation of such Act would subject the Company to material
adverse consequences.
11. Probable Change in Control and Management. A business combination
involving the issuance of the Company's Common Shares will, in all likelihood,
result in shareholders of a private company obtaining a controlling interest in
the Company. Any such business combination may require management of the Company
to sell or transfer all or a portion of the Company's Common Shares held by
them, or resign as members of the Board of Directors of the Company. The
resulting change in control of the Company could result in removal of one or
more present officers and directors of the Company and a corresponding reduction
in or elimination of their participation in the future affairs of the Company.
12. Reduction of Percentage Share Ownership Following Business Combination.
The Company's primary plan of operation is based upon a business combination
with a private concern which, in all likelihood, would result in the Company
issuing securities to shareholders of any such private company. The issuance of
previously authorized and unissued Common Shares of the Company would result in
reduction in percentage of shares owned by present and prospective shareholders
of the Company and may result in a change in control or management of the
Company.
13. Disadvantages of Blank Check Offering. The Company may enter into a
business combination with an entity that desires to establish a public trading
market for its shares. A business opportunity may attempt to avoid what it deems
to be
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adverse consequences of undertaking its own public offering by seeking a
business combination with the Company. Such consequences may include, but are
not limited to, time delays of the registration process, significant expenses to
be incurred in such an offering, loss of voting control to public shareholders
and the inability or unwillingness to comply with various federal and state laws
enacted for the protection of investors.
14. Taxation. Federal and state tax consequences will, in all likelihood,
be major considerations in any business combination the Company may undertake.
Currently, such transactions may be structured so as to result in tax-free
treatment to both companies, pursuant to various federal and state tax
provisions. The Company intends to structure any business combination so as to
minimize the federal and state tax consequences to both the Company and the
target entity; however, there can be no assurance that such business combination
will meet the statutory requirements of a tax-free reorganization or that the
parties will obtain the intended tax-free treatment upon a transfer of stock or
assets. A non-qualifying reorganization could result in the imposition of both
federal and state taxes which may have an adverse effect on both parties to the
transaction.
15. Requirement of Audited Financial Statements May Disqualify Business
Opportunities. Management of the Company believes that any potential business
opportunity must provide audited financial statements for review, for the
protection of all parties to the business combination. One or more attractive
business opportunities may choose to forego the possibility of a business
combination with the Company, rather than incur the expenses associated with
preparing audited financial statements.
16. Dilution. Any merger or acquisition effected by the Company can be
expected to have a significant dilutive effect on the percentage of shares held
by the Company's then shareholders.
17. No Trading Market. There is no trading market for the Company's common
stock at present, and there has been no trading market to date. There is no
assurance that a trading market will ever develop or, if such market does
develop, that it will continue. The Company intends to request a broker-dealer
to make application to the NASD Regulation, Inc. to have the Company's
securities traded on the OTC Bulletin Board or published in print and electronic
media, or either, in the National Quotation Bureau LLC "Pink Sheet."
18. Required Year 2000 Compliance After January 1, 2000. The Year 2000
issue affected virtually all companies and organizations. A business combination
may result in the Company disclosing certain Year 2000 matters. Many existing
computer programs used only two digits to identify a year in the date field.
These programs were designed and developed without considering the impact of the
change in the century.
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19. Disclosure by Public Companies Regarding the Year 2000 Issue After
January 1, 2000. Any business combination may require special Year 2000
disclosures. Management of the Company believes that any potential business
opportunity may require a disclosure that the target company must undertake
remedial action to address the Year 2000 issue. The disclosure of the potential
costs and uncertainties will depend on a number of factors, including its
software and hardware and the nature of its industry. The Company may be
required to review whether it needs to disclose future anticipated costs,
problems and uncertainties associates with any remedial Year 2000 consequences,
particularly in its filings with the Securities and Exchange Commission. The
Company may have to disclose this information in the Securities and Exchange
Commission filings because (i) the form or report may require the disclosure, or
(ii) in addition to the information that the Company is specifically required to
disclose, the disclosure rules require disclosure of any additional material
information necessary to make the required disclosure not misleading.
If the Company determines that it is required to make a Year 2000
disclosure, applicable rules or regulations must be followed. As part of
this disclosure, the following topics will be addressed:
o the target company's general plans to address any Year 2000 remedial
action issues relating to its business, its operations (including
operating systems) and, if material, its relationships with customers,
suppliers, and other constituents; and its timetable for carrying out
those plans; and
o the total dollar amount that the target company estimates will be
spent to remediate its Year 2000 problems, if such amount is expected
to be material to the target company's business, operations or
financial condition, and any material impact these expenditures are
expected to have on the target company's results of operations,
liquidity and capital resources.
Item 2. Plan of Operation
The Company intends to seek to acquire assets or shares of an entity
actively engaged in business which generates revenues in exchange for its
securities. The Company has no particular acquisitions in mind and has not
entered into any negotiations regarding such an acquisition. None of the
Company's officers, directors, promoters or affiliates have engaged in any
preliminary contact or discussions with any representative of any other company
regarding the possibility of an acquisition or merger between the Company and
such other company as of the date of this registration statement.
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The Company has no full time or part-time employees. None of the officers
and directors anticipates devoting more than ten (10%) percent of his or her
time to Company activities. The Company's President and Secretary have agreed to
allocate a portion of said time to the activities of the Company, without
compensation. These officers anticipate that the business plan of the Company
can be implemented by their devoting minimal time per month to the business
affairs of the Company and, consequently, conflicts of interest may arise with
respect to the limited time commitment by such officers. See "Item 5 -
Directors, Executive Officers, Promoters and Control Persons - Resumes."
General Business Plan
The Company's purpose is to seek, investigate and, if such investigation
warrants, acquire an interest in business opportunities presented to it by
persons or firms who or which desire to seek the advantages of an Issuer who has
complied with the 1934 Act. The Company will not restrict its search to any
specific business, industry, or geographical location and the Company may
participate in a business venture of virtually any kind or nature. This
discussion of the proposed business is purposefully general and is not meant to
be restrictive of the Company's virtually unlimited discretion to search for and
enter into potential business opportunities. Management anticipates that it may
be able to participate in only one potential business venture because the
Company has nominal assets and limited financial resources. See Item F/S,
"Financial Statements." This lack of diversification should be considered a
substantial risk to shareholders of the Company because it will not permit the
Company to offset potential losses from one venture against gains from another.
The Company may seek a business opportunity with entities which have
recently commenced operations, or which wish to utilize the public marketplace
in order to raise additional capital in order to expand into new products or
markets, to develop a new product or service, or for other corporate purposes.
The Company may acquire assets and establish wholly owned subsidiaries in
various businesses or acquire existing businesses as subsidiaries.
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Due to general
economic conditions, rapid technological advances being made in some industries
and shortages of available capital, management believes that there are numerous
firms seeking the benefits of an Issuer who has complied with the 1934 Act. Such
benefits may include facilitating or improving the terms on which additional
equity financing may be sought, providing liquidity for incentive stock options
or similar benefits to key employees, providing liquidity (subject to
restrictions of applicable statutes), for all shareholders and other factors.
Potentially, available business
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opportunities may occur in many different industries and at various stages of
development, all of which will make the task of comparative investigation and
analysis of such business opportunities extremely difficult and complex.
The Company has, and will continue to have, no capital with which to
provide the owners of business opportunities with any significant cash or other
assets. However, management believes the Company will be able to offer owners of
acquisition candidates the opportunity to acquire a controlling ownership
interest in an Issuer who has complied with the 1934 Act without incurring the
cost and time required to conduct an initial public offering. The owners of the
business opportunities will, however, incur significant legal and accounting
costs in connection with acquisition of a business opportunity, including the
costs of preparing Form 8-K's, 10-K's or 10-KSB's, agreements and related
reports and documents. The 1934 Act, specifically requires that any merger or
acquisition candidate comply with all applicable reporting requirements, which
include providing audited financial statements to be included within the
numerous filings relevant to complying with the 1934 Act. Nevertheless, the
officers and directors of the Company have not conducted market research and are
not aware of statistical data which would support the benefits of a merger or
acquisition transaction for the owners of a business opportunity.
The Company has made no determination as to whether or not it will file
periodic reports in the event its obligation to file such reports is suspended
under the 1934 Act. 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 1934 Act reporting requirements, provided that he is an officer
and director of the Company when the obligation is incurred.
The analysis of new business opportunities will be undertaken by, or under
the supervision of, the officers and directors of the Company, none of whom is a
professional business analyst. Management intends to concentrate on identifying
preliminary prospective business opportunities which may be brought to its
attention through present associations of the Company's officers and directors,
or by the Company's shareholders. In analyzing prospective business
opportunities, management will consider such matters as the available technical,
financial and managerial resources; working capital and other financial
requirements; history of operations, if any; prospects for the future; nature of
present and expected competition; the quality and experience of management
services which may be available and the depth of that management; the potential
for further research, development, or exploration; specific risk factors not now
foreseeable but which then may be anticipated to impact the proposed activities
of the Company; the potential for growth or expansion; the potential for profit;
the public recognition of acceptance of products, services, or trades; name
identification; and other relevant factors. Officers and
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directors of the Company expect to meet personally with management and key
personnel of the business opportunity as part of their investigation. To the
extent possible, the Company intends to utilize written reports and personal
investigation to evaluate the above factors. The Company will not acquire or
merge with any company for which audited financial statements cannot be obtained
within a reasonable period of time after closing of the proposed transaction.
Management of the Company, while not especially experienced in matters
relating to the new business of the Company, will rely upon their own efforts in
accomplishing the business purposes of the Company. It is not anticipated that
any outside consultants or advisors will be utilized by the Company to
effectuate its business purposes described herein. However, if the Company does
retain such an outside consultant or advisor, any cash fee by such party will
need to be paid by the prospective merger acquisition candidate, as the Company
has no cash assets with which to pay such obligation. There have been no
contracts or agreements with any outside consultants and none are anticipated in
the future.
The Company will not restrict its search for any specific kind of firms,
but may acquire a venture which is in its preliminary or development stage,
which is already in operation, or in essentially any stage of its corporate
life. It is impossible to predict at this time the status of any business in
which the Company may become engaged, in that such business may need to seek
additional capital, may desire to have its shares publicly traded, or may seek
other advantages which the Company may offer. However, the Company does not
intend to obtain funds in one or more private placements to finance the
operation of any acquired business opportunity until such time as the Company
has successfully consummated such a merger or acquisition.
It is anticipated that the Company will incur nominal expenses in the
implementation of its business plan described herein. Because the Company has no
capital with which to pay these anticipated expenses, present management of the
Company will pay these charges with their personal funds, as interest free loans
to the Company or as capital contributions. However, if loans, the only
opportunity which management has to have these loans repaid will be from a
prospective merger or acquisition candidate. Management has agreed among
themselves that the repayment of any loans made on behalf of the Company will
not impede, or be made conditional in any manner, to consummation of a proposed
transaction.
The Company has no plans, proposals, arrangements or understandings with
respect to the sale or issuance of additional securities prior to the location
of an acquisition or merger candidate.
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Acquisition of Opportunities
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization, joint
venture, or licensing agreement with another corporation or entity. It may also
acquire stock or assets of an existing business. On the consummation of a
transaction, it is probable that the present management and shareholders of the
Company will no longer be in control of the Company. In addition, the Company's
directors may, as part of the terms of the acquisition transaction, resign and
be replaced by new directors without a vote of the Company's shareholders or may
sell their stock in the Company. Any terms of sale of the shares presently held
by officers and/or directors of the Company will be also afforded to all other
shareholders of the Company on similar terms and conditions. Any and all such
sales will only be made in compliance with the securities laws of the United
States and any applicable state.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its transaction, the Company may agree to register all or
a part of such securities immediately after the transaction is consummated or at
specified times thereafter. If such registration occurs, of which there can be
no assurance, it will be undertaken by the surviving entity after the Company
has successfully consummated a merger or acquisition and the Company is no
longer considered a "shell" company. The issuance of substantial additional
securities and their potential sale into any trading market which may develop in
the Company's securities may have a depressive effect on the value of the
Company's securities in the future, if such a market develops, of which there is
no assurance.
While the actual terms of a transaction to which the Company may be a party
cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a so-called "tax-free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code (the "Code"). In order to
obtain tax-free treatment under the Code, it may be necessary for the owners of
the acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, the shareholders of the Company, would retain less than
20% of the issued and outstanding shares of the surviving entity, which would
result in significant dilution in the equity of such shareholders.
As part of the Company's investigation, officers and directors of the
Company will meet personally with management and key personnel, may visit and
inspect material facilities, obtain independent analysis of verification of
certain information provided, check references of management and key personnel,
and
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take other reasonable investigative measures, to the extent of the Company's
limited financial resources and management expertise. The manner in which the
Company participates in an opportunity will depend on the nature of the
opportunity, the respective needs and desires of the Company and other parties,
the management of the opportunity and the relative negotiation strength of the
Company and such other management.
With respect to any merger or acquisition, negotiations with target company
management is expected to focus on the percentage of the Company which the
target company shareholders would acquire in exchange for all of their
shareholdings in the target company. Depending upon, among other things, the
target company's assets and liabilities, the Company's shareholders will in all
likelihood hold a substantially lesser percentage ownership interest in the
Company following any merger or acquisition. The percentage ownership may be
subject to significant reduction in the event the Company acquires a target
company with substantial assets. Any merger or acquisition effected by the
Company can be expected to have a significant dilutive effect on the percentage
of shares held by the Company's then shareholders.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate written agreements. Although the terms
of such agreements cannot be predicted, generally such agreements will require
some specific representations and warranties by all of the parties thereto, will
specify certain events of default, will detail the terms of closing and the
conditions which must be satisfied by each of the parties prior to and after
such closing, will outline the manner of bearing costs, including costs
associated with the Company's attorneys and accountants, will set forth remedies
on default and will include miscellaneous other terms.
The Company will not acquire or merge with any entity which cannot provide
independent audited financial statements within a reasonable period of time
after closing of the proposed transaction. The Company is subject to all of the
reporting requirements included in the 1934 Act. Included in these requirements
is the affirmative duty of the Company to file independent audited financial
statements as part of its Form 8-K to be filed with the Securities and Exchange
Commission upon consummation of a merger or acquisition, as well as the
Company's audited financial statements included in its annual report on Form
10-K (or 10-KSB, as applicable). If such audited financial statements are not
available at closing, or within time parameters necessary to insure the
Company's compliance with the requirements of the 1934 Act, or if the audited
financial statements provided do not conform to the representations made by the
candidate to be acquired in the closing documents, the closing documents will
provide that the proposed transaction will be voidable, at the discretion of the
present management of the Company. If such transaction is voided, the agreement
will also
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contain a provision providing for the acquisition entity to reimburse the
Company for all costs associated with the proposed transaction.
Competition
The Company will remain an insignificant participant among the firms which
engage in the acquisition of business opportunities. There are many established
venture capital and financial concerns which have significantly greater
financial and personnel resources and technical expertise than the Company. In
view of the Company's combined extremely limited financial resources and limited
management availability, the Company will continue to be at a significant
competitive disadvantage compared to the Company's competitors.
Investment Company Act of 1940
Although the Company will be subject to regulation under the Securities Act
of 1933, as amended, and the 1934 Act, management believes the Company will not
be subject to regulation under the Investment Company Act of 1940 insofar as the
Company will not be engaged in the business of investing or trading in
securities. In the event the Company engages in business combinations which
result in the Company holding passive investment interests in a number of
entities, the Company could be subject to regulation under the Investment
Company Act of 1940. In such event, the Company would be required to register as
an investment company and could be expected to incur significant registration
and compliance costs. The Company has obtained no formal determination from the
Securities and Exchange Commission as to the status of the Company under the
Investment Company Act of 1940 and, consequently, any violation of such Act
would subject the Company to material adverse consequences. The Company's Board
of Directors unanimously approved a resolution stating that it is the Company's
desire to be exempt from the Investment Company Act of 1940 under Regulation
3a-2 thereto.
Lock-Up Agreement
Each of the officers and directors of the Company have executed and
delivered a "lock-up" letter agreement affirming that they shall not sell their
respective shares of the Company's common stock until such time as the Company
has entered into a merger or acquisition agreement, or the Company is no longer
classified as a "blank check" company, whichever first occurs.
Item 3. Description of Property
The Company has no properties and at this time has no agreements to acquire
any properties.
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The Company presently occupies office space at 1105 Terminal Way, Suite
202, Century Park, Reno, Nevada 89502. This space is provided to the Company on
a rent free basis, and it is anticipated that this arrangement will remain until
such time as the Company successfully consummates a merger or acquisition.
Management believes that this arrangement will meet the Company's needs for the
foreseeable future.
Item 4. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners.
The following table sets forth the security and beneficial ownership for
each class of equity securities of the Company for any person who is known to be
the beneficial owner of more than five percent of the Company.
<TABLE>
<CAPTION>
Name and Amount and
Address of Nature of
Beneficial Beneficial Percent
Title of Class Owner Owner of Class
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Robert Gonzalez 500,000 23.80%
5553 Adobe Falls Road, #5
San Diego, CA 92120
Common Larry Eck 600,000 28.57%
1750 Avocado Road
Oceanside, CA 92054
Common Danny Howard Cooper 350,000 16.67%
759 Tawny Court
Oceanside, CA 92057
Common All Officers and 1,450,000 69.04%
Directors as a Group
(three [3] individuals)
</TABLE>
The total of the Company's outstanding Common Shares are held by 25
persons.
(b) Security Ownership of Management.
The following table sets forth the ownership for each class of equity
securities of the Company owned beneficially and of record by all directors and
officers of the Company.
<TABLE>
<S> <C> <C> <C>
Common Robert Gonzalez 500,000 23.80%
5553 Adobe Falls Road, #5
San Diego, CA 92120
</TABLE>
15.
<PAGE> 16
<TABLE>
<S> <C> <C> <C>
Common Larry Eck 600,000 28.57%
1750 Avocado Road
Oceanside, CA 92054
Common Danny Howard Cooper 350,000 16.67%
759 Tawny Court
Oceanside, CA 92057
Common All Officers and 1,450,000 69.04%
Directors as a Group
(three [3] individuals)
</TABLE>
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The directors and officers of the Company are as follows:
Name Age Position
---- --- --------
Robert Gonzalez 51 President/Director
Larry Eck 56 Secretary/Treasurer/
Director
Danny Howard Cooper 48 Director
The above listed officers and directors will serve until the next annual
meeting of the shareholders or until their death, resignation, retirement,
removal, or disqualification, or until their successors have been duly elected
and qualified. Vacancies in the existing Board of Directors are filled by
majority vote of the remaining Directors. Officers of the Company serve at the
will of the Board of Directors. There are no agreements or understandings for
any officer or director to resign at the request of another person and no
officer or director is acting on behalf of or will act at the direction of any
other person. There is no family relationship between any executive officer and
director of the Company.
Resumes
Robert Gonzalez
Robert Gonzalez is the President and a Director of the Issuer. From 1994 to
the present, he has been an Audio Engineer and Electronic Technician for
Science Applications International Corporation - supporting laser guided
missile systems, design of audio communication system, video system for
tank warfare, work in the robotics division and surveillance system for
naval underwater warfare system.
16.
<PAGE> 17
Larry Eck
Larry Eck is the Secretary-Treasurer and a Director of the Issuer. From
1998 to the present, he has been employed by Taylor Place Real Estate as a
real estate salesperson. From 1985 through 1998, he was the owner of Eck
Interiors and Design. Prior to 1985 he was a school administrator, high
school principal, teacher and coach. He has a Master and Bachelor of
Science, Secondary School Administration, History and Health and Small
Business Management Degree.
Danny Howard Cooper
Danny Howard Cooper is a Director of the Issuer. From 1995 to the present,
he is the owner/operator of Coastal Laminate and Cabinetry; one of the
largest cabinet design, construction and installation firms in southern
California specializing in all types of commercial contracting and an Owner
of an entertainment firm providing music to children's charities.
Previous Blank Check Companies - Current
Blank Check Companies
The officers and directors of the Company have not been officers and
directors in any other blank check offerings. The officers and directors,
however, do anticipate becoming involved with additional blank check companies
who may file under the Securities Act of 1933, as amended, or the 1934 Act, or
either. In addition, the officers and directors of the Company may become
involved in additional blank check companies which may request a broker-dealer
to request clearance from the NASD Regulation, Inc. for trading clearance in the
applicable quotation medium.
Conflicts of Interest
Members of the Company's management are associated with other firms
involved in a range of business activities. Consequently, there are potential
inherent conflicts of interest in their acting as officers and directors of the
Company. Insofar as the officers and directors are engaged in other business
activities, management anticipates it will devote only a minor amount of time to
the Company's affairs.
The officers and directors of the Company are now and may in the future
become shareholders, officers or directors of other companies which may be
engaged in business activities similar to those conducted by the Company.
Accordingly, additional direct conflicts of interest may arise in the future
with respect to such individuals acting on behalf of the Company or other
entities. Moreover, additional conflicts of interest may arise with respect to
opportunities which come to the
17.
<PAGE> 18
attention of such individuals in the performance of their duties or otherwise.
The Company does not currently have a right of first refusal pertaining to
opportunities that come to management's attention insofar as such opportunities
may relate to the Company's proposed business operations.
The officers and directors are, so long as they are officers or directors
of the Company, subject to the restriction that all opportunities contemplated
by the Company's plan of operation which come to their attention, either in the
performance of their duties or in any other manner, will be considered
opportunities of, and be made available to the Company and the companies that
they are affiliated with on an equal basis. A breach of this requirement will be
a breach of the fiduciary duties of the officer or director. If the Company or
the companies in which the officers and directors are affiliated with both
desire to take advantage of an opportunity, then said officers and directors
would abstain from negotiating and voting upon the opportunity. However, all
directors may still individually take advantage of opportunities if the Company
should decline to do so. Except as set forth above, the Company has not adopted
any other conflict of interest policy with respect to such transactions.
Item 6. Executive Compensation.
None of the Company's officers and/or directors receive any compensation
for their respective services rendered unto the Company, nor have they received
such compensation in the past. They all have agreed to act without compensation
until authorized by the Board of Directors, which is not expected to occur until
the Company has generated revenues from operations after consummation of a
merger or acquisition. As of the date of this registration statement, the
Company has no funds available to pay directors. Further, none of the directors
are accruing any compensation pursuant to any agreement with the Company.
It is possible that, after the Company successfully consummates a merger or
acquisition with an unaffiliated entity, that entity may desire to employ or
retain one or a number of members of the Company's management for the purposes
of providing services to the surviving entity, or otherwise provide other
compensation to such persons. However, the Company has adopted a policy whereby
the offer of any post-transaction remuneration to members of management will not
be a consideration in the Company's decision to undertake any proposed
transaction. Each member of management has agreed to disclose to the Company's
Board of Directors any discussions concerning possible compensation to be paid
to them by any entity which proposes to undertake a transaction with the Company
and further, to abstain from voting on such transaction. Therefore, as a
practical matter, if each member of the Company's Board of Directors is
18.
<PAGE> 19
offered compensation in any form from any prospective merger or acquisition
candidate, the proposed transaction will not be approved by the Company's Board
of Directors as a result of the inability of the Board to affirmatively approve
such a transaction.
It is possible that persons associated with management may refer a
prospective merger or acquisition candidate to the Company. In the event the
Company consummates a transaction with any entity referred by associates of
management, it is possible that such an associate will be compensated for their
referral in the form of a finder's fee. It is anticipated that this fee will be
either in the form of restricted common stock issued by the Company as part of
the terms of the proposed transaction, or will be in the form of cash
consideration. However, if such compensation is in the form of cash, such
payment will be tendered by the acquisition or merger candidate, because the
Company has insufficient cash available. The amount of such finder's fee cannot
be determined as of the date of this registration statement, but is expected to
be comparable to consideration normally paid in like transactions. No member of
management of the Company will receive any finders fee, either directly or
indirectly, as a result of their respective efforts to implement the Company's
business plan outlined herein.
No retirement, pension, profit sharing, stock option or insurance programs
or other similar programs have been adopted by the Company for the benefit of
its employees.
Item 7. Certain Relationships and Related Transactions.
There have been no related party transactions, or any other transactions or
relationships required to be disclosed pursuant to Item 404 of Regulation S-B.
Robert Gonzalez has advanced $350.00 to the Company to pay for the current
accounting costs applicable to this Form 10SB12G and all amendments applicable
to this filing, and has agreed to provide the necessary funds, without interest,
for the Company to comply with the 1934 Act provided that he is an officer and
director of the Company when the obligation is incurred. All advances are
interest-free.
Item 8. Description of Securities.
The Company's authorized capital stock consists of 25,000,000 shares, par
value $.001 per share. There are 2,100,000 Common Shares issued and outstanding
as of the date of this filing.
19.
<PAGE> 20
All shares of Common Stock have equal voting rights and, when validly
issued and outstanding, are entitled to one vote per share in all matters to be
voted upon by shareholders. The shares of Common Stock have no preemptive,
subscription, conversion or redemption rights and may be issued only as
fully-paid and nonassessable shares. Cumulative voting in the election of
directors is not permitted, which means that the holders of a majority of the
issued and outstanding shares of Common Stock represented at any meeting at
which a quorum is present will be able to elect the entire Board of Directors if
they so choose and, in such event, the holders of the remaining shares of Common
Stock will not be able to elect any directors. In the event of liquidation of
the Company, each shareholder is entitled to receive a proportionate share of
the Company's assets available for distribution to shareholders after the
payment of liabilities and after distribution in full of preferential amounts,
if any. All shares of the Company's Common Stock issued and outstanding are
fully-paid and nonassessable. Holders of the Common Stock are entitled to share
pro rata in dividends and distributions with respect to the Common Stock, as may
be declared by the Board of Directors out of funds legally available therefor.
PART II
Item 1. Market Price for Common Equity and Related Stockholder Matters.
(a) Market Price.
The Company's Common Stock is not quoted at the present time.
There is no trading market for the Company's Common Stock at present and
there has been no trading market to date. There is no assurance that a trading
market will ever develop or, if such a market does develop, that it will
continue. The Company intends to request a broker-dealer to make application to
the NASD Regulation, Inc. to have the Company's securities traded on the OTC
Bulletin Board System or published, in print and electronic media, or either, in
the National Quotation Bureau LLC "Pink Sheets."
The Securities and Exchange Commission adopted Rule 15g-9, which
established the definition of a "penny stock," for purposes relevant to the
Company, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require: (i) that a broker or dealer approve a person's account for
transactions in penny stocks; and (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity and
quantity of the
20.
<PAGE> 21
penny stock to be purchased. In order to approve a person's account for
transactions in penny stocks, the broker or dealer must (i) obtain financial
information and investment experience and objectives of the person; and (ii)
make a reasonable determination that the transactions in penny stocks are
suitable for that person and that person has sufficient knowledge and experience
in financial matters to be capable of evaluating the risks of transactions in
penny stocks. The broker or dealer must also deliver, prior to any transaction
in a penny stock, a disclosure schedule prepared by the Commission relating to
the penny stock market, which, in highlight form, (i) sets forth the basis on
which the broker or dealer made the suitability determination; and (ii) that the
broker or dealer received a signed, written agreement from the investor prior to
the transaction. Disclosure also has to be made about the risks of investing in
penny stock in both public offering and in secondary trading, and about
commissions payable to both the broker-dealer and the registered representative,
current quotations for the securities and the rights and remedies available to
an investor in cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny stocks.
For the initial listing in the NASDAQ SmallCap market, a company must have
net tangible assets of $4 million or market capitalization of $50 million or a
net income (in the latest fiscal year or two of the last fiscal years) of
$750,000, a public float of 1,000,000 shares with a market value of $5 million.
The minimum bid price must be $4.00 and there must be 3 market makers. In
addition, there must be 300 shareholders holding 100 shares or more, and the
company must have an operating history of at least one year or a market
capitalization of $50 million.
For continued listing in the NASDAQ SmallCap market, a company must have
net tangible assets of $2 million or market capitalization of $35 million or a
net income (in the latest fiscal year or two of the last fiscal years) of
$500,000, a public float of 500,000 shares with a market value of $1 million.
The minimum bid price must be $1.00 and there must be 2 market makers. In
addition, there must be 300 shareholders holding 100 shares or more.
Management intends to strongly consider undertaking a transaction with any
merger or acquisition candidate which will allow the Company's securities to be
traded without the aforesaid limitations. However, there can be no assurances
that, upon a successful merger or acquisition, the Company will qualify its
securities for listing on NASDAQ or some other national exchange, or be able to
maintain the maintenance criteria necessary to insure continued listing. The
failure of the Company to qualify
21.
<PAGE> 22
its securities or to meet the relevant maintenance criteria after such
qualification in the future may result in the discontinuance of the inclusion of
the Company's securities on a national exchange. In such events, trading, if
any, in the Company's securities may then continue in the non-NASDAQ
over-the-counter market. As a result, a shareholder may find it more difficult
to dispose of, or to obtain accurate quotations as to the market value of, the
Company's securities.
The Company intends to request a broker-dealer to make application to the
NASD Regulation, Inc. to have the Company's securities traded on the OTC
Bulletin Board Systems or published, in print and electronic media, or either,
in the National Quotation Bureau LLC "Pink Sheets," or either.
(b) Holders.
There are twenty-five (25) holders of the Company's Common Stock. In 1996,
the Company issued 2,100,000, as adjusted for the stock split, of its Common
Shares for cash. All of the issued and outstanding shares of the Company's
Common Stock were issued in accordance with the exemption from registration
afforded by Section 4(2) of the Securities Act of 1933, as amended.
As of the date of this registration statement, all of the issued and
outstanding shares of the Company's Common Stock are eligible for sale under
Rule 144 promulgated under the Securities Act of 1933, as amended, subject to
certain limitations included in said Rule. In general, under Rule 144, a person
(or persons whose shares are aggregated), who has satisfied a one year holding
period, under certain circumstances, may sell within any three-month period a
number of shares which does not exceed the greater of one percent of the then
outstanding Common Stock or the average weekly trading volume during the four
calendar weeks prior to such sale. Rule 144 also permits, under certain
circumstances, the sale of shares without any quantity limitation by a person
who has satisfied a two-year holding period and who is not, and has not been for
the preceding three months, an affiliate of the Company.
(c) Dividends.
The Company has not paid any dividends to date, and has no plans to do so
in the immediate future.
Item 2. Legal Proceedings.
There is no litigation pending or threatened by or against the Company.
22.
<PAGE> 23
Item 3. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.
The Company has not changed accountants since its formation and there are
no disagreements with the findings of said accountants.
Item 4. Recent Sales of Unregistered Securities.
The Company has not issued any of its securities during the three year
period preceding the date of this registration statement. All of the shares of
Common Stock of the Company previously issued have been issued for investment
purposes in a "private transaction" and are "restricted" shares as defined in
Rule 144 under the Securities Act of 1933, as amended. These shares may not be
offered for public sale except under Rule 144, or otherwise, pursuant to said
Act.
As of the date of this report, all of the issued and outstanding shares of
the Company's Common Stock are eligible for sale under Rule 144 promulgated
under the Securities Act of 1933, as amended, subject to certain limitations
included in said Rule. Each of the officers and directors have executed and
delivered to the Company a "lock-up" letter affirming that he or she shall not
sell their respective shares of the Company's Common Stock until such time as
the Company has successfully entered into a merger or acquisition agreement
and/or the Company is no longer classified as a "blank check" company.
In summary, Rule 144 applies to affiliates (that is, control persons) and
nonaffiliates when they resell restricted securities (those purchased from the
issuer or an affiliate of the issuer in nonpublic transactions). Nonaffiliates
reselling restricted securities, as well as affiliates selling restricted or
nonrestricted securities, are not considered to be engaged in a distribution
and, therefore, are not deemed to be underwriters as defined in Section 2(11),
if six conditions are met:
(1) Current public information must be available about the issuer unless
sales are limited to those made by nonaffiliates after two years.
(2) When restricted securities are sold, generally there must be a
one-year holding period.
(3) When either restricted or nonrestricted securities are sold by an
affiliate after one year, there are limitations on the amount of
securities that may be sold; when restricted securities are sold by
non-affiliates between the first and second years, there are identical
limitations; after two years, there are no volume limitations for
resales by non-affiliates.
23.
<PAGE> 24
(4) Except for sales of restricted securities made by nonaffiliates after
two years, all sales must be made in brokers' transactions as defined
in Section 4(4) of the Securities Act of 1933, as amended, or a
transaction directly with a "market maker" as that term is defined in
Section 3(a)(38) of the 1934 Act.
(5) Except for sales of restricted securities made by nonaffiliates after
two years, a notice of proposed sale must be filed for all sales in
excess of 500 shares or with an aggregate sales price in excess of
$10,000.
(6) There must be a bona fide intention to sell within a reasonable time
after the filing of the notice referred to in (5) above.
Item 5. Indemnification of Directors and Officers.
Except for acts or omissions which involve intentional misconduct, fraud or
known violation of law or for the payment of dividends in violation of Nevada
Revised Statutes, there shall be no personal liability of a director or officer
to the Company, or its stockholders for damages for breach of fiduciary duty as
a director or officer. The Company may indemnify any person for expenses
incurred, including attorneys fees, in connection with their good faith acts if
they reasonably believe such acts are in and not opposed to the best interests
of the Company and for acts for which the person had no reason to believe his or
her conduct was unlawful. The Company may indemnify the officers and directors
for expenses incurred in defending a civil or criminal action, suit or
proceeding as they are incurred 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 of such expenses if it is ultimately
determined by a court of competent jurisdiction in which the action or suit is
brought determined that such person is fairly and reasonably entitled to
indemnification for such expenses which the court deems proper.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to officers, directors or persons
controlling the Company pursuant to the foregoing, the Company has been informed
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933, as amended, and is therefore unenforceable.
24.
<PAGE> 25
PART F/S
Financial Statements.
The following financial statements are attached to this report and filed as
a part thereof.
1) Table of Contents
2) Independent Auditors' Report
3) Assets
4) Liabilities and Stockholders' Equity
5) Statement of Operations
6) Statement of Shareholders' Equity
7) Statement of Cash Flows
8) Notes to Financial Statements
25.
<PAGE> 26
TABLE OF CONTENTS
PAGE #
------
INDEPENDENT AUDITORS REPORT 27
-------------------------------------------------------------------
ASSETS 28
-------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY 29
-------------------------------------------------------------------
STATEMENT OF OPERATIONS 30
-------------------------------------------------------------------
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY 31
-------------------------------------------------------------------
STATEMENT OF CASH FLOWS 32
-------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 33-37
-------------------------------------------------------------------
<PAGE> 27
BARRY L. FRIEDMAN, P.C.
Certified Public Accountant
1582 TULITA DRIVE OFFICE (702) 361-8414
LAS VEGAS, NEVADA 89123 FAX NO. (702) 896-0278
INDEPENDENT AUDITORS' REPORT
Board of Directors January 21, 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 December 31, 1999,
December 31, 1998, and December 31, 1997, and the related statement of
stockholder's equity for December 31, 1999, December 31, 1998, and December 31,
1997 and the statements of operations and cash flows for the three years ended
December 31, 1999, December 31, 1998, and December 31, 1997 and the period
December 6, 1996 (inception) to December 31, 1999. 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 December 31, 1999, December 31, 1998,
and December 31, 1997, and the related statement of stockholder's equity for
December 31, 1999, December 31, 1998, and December 31, 1997 and the statements
of operations and cash flows for the three years ended December 31, 1999,
December 31, 1998, and December 31, 1997 and the period December 6, 1996
(inception) to December 31, 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 #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.
/s/ BARRY L. FRIEDMAN
- ---------------------------
Barry L. Friedman
Certified Public Accountant
27
<PAGE> 28
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
December December December
31, 1999 31, 1998 31, 1997
------------ ---------- -----------
<S> <C> <C> <C>
CURRENT ASSETS $ 0 $ 0 $ 0
------------ ---------- -----------
TOTAL CURRENT ASSETS $ 0 $ 0 $ 0
------------ ---------- -----------
OTHER ASSETS $ 0 $ 0 $ 0
------------ ---------- -----------
TOTAL OTHER ASSETS $ 0 $ 0 $ 0
------------ ---------- -----------
TOTAL ASSETS $ 0 $ 0 $ 0
------------ ---------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements
28
<PAGE> 29
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
December December December
31, 1999 31, 1998 31, 1997
-------- -------- --------
<S> <C> <C> <C>
CURRENT LIABILITIES
Officer's Advances (Note #5) $ 350 $ 0 $ 0
-------- -------- --------
TOTAL CURRENT LIABILITIES $ 350 $ 0 $ 0
-------- -------- --------
STOCKHOLDERS' EQUITY (Note #4)
Common stock
No Par Value
Authorized 25,000 shares
Issued and outstanding at
December 31, 1997 -
21,000 shares $ 2,100
December 31, 1998 -
21,000 shares $ 2,100
Common Stock
Par Value $0.001
Authorized 25,000,000 shares
Issued and Outstanding at
December 31, 1999 -
2,100,000 shares $ 2,100
Additional Paid-In Capital 0 0 0
Deficit accumulated during
The development stage -2,450 -2,100 -2,100
-------- -------- --------
TOTAL STOCKHOLDERS' EQUITY $ -350 $ 0 $ 0
-------- -------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 0 $ 0 $ 0
-------- -------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements
29
<PAGE> 30
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Year Year Dec.6,1996
Ended Ended Ended (Inception)
Dec. 31, Dec. 31, Dec. 31, to Dec. 31,
1999 1998 1997 1999
-------- -------- -------- -----------
<S> <C> <C> <C> <C>
INCOME
Revenue $ 0 $ 0 $ 0 $ 0
---------- ---------- ---------- ----------
EXPENSES
General, Selling and
Administrative $ 350 $ 0 $ 0 $ 2,450
---------- ---------- ---------- ----------
TOTAL EXPENSES $ 350 $ 0 $ 0 $ 2,450
---------- ---------- ---------- ----------
NET PROFIT/LOSS (-) $ -350 $ 0 $ 0 $ -2,450
---------- ---------- ---------- ----------
Net Profit/Loss(-)
per weighted share
(Note #1) $ -.0002 $ NIL $ NIL $ -.0012
---------- ---------- ---------- ----------
Weighted average
Number of common
shares outstanding 2,100,000 2,100,000 2,100,000 2,100,000
---------- ---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements
30
<PAGE> 31
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, 1996 21,000 $ 2,100 $ 0 $ -2,100
Net loss year ended
December 31, 1997 -- -- -- 0
--------- --------- --------- --------
Balance,
December 31, 1997 21,000 $ 2,100 $ 0 $ -2,100
Net loss year ended
December 31, 1998 -- -- -- 0
--------- --------- --------- --------
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
--------- --------- --------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements
31
<PAGE> 32
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Year Year Year Dec. 6, 1996
Ended Ended Ended (Inception)
Dec. 31, Dec. 31, Dec. 31, to Dec. 31,
1999 1998 1997 1999
-------- -------- -------- -----------
<S> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net Loss $ -350 $ 0 $000,000 $ -2,450
Adjustment to
Reconcile net loss
To net cash provided
by operating
Activities 0 0 0 0
Changes in assets and
Liabilities
Increase in current
Liabilities
Officer's Advances +350 0 0 +350
-------- -------- -------- --------
NET CASH USED IN
OPERATING ACTIVITIES $ 0 $ 0 $ 0 $ -2,100
CASH FLOWS FROM
INVESTING ACTIVITIES 0 0 0 0
CASH FLOWS FROM
FINANCING ACTIVITIES
Issuance of Common
Stock for Cash 0 0 0 +2,100
-------- -------- -------- --------
Net Increase (decrease) $ 0 $ 0 $ 0 $ 0
Cash,
Beginning of period 0 0 0 0
-------- -------- -------- --------
Cash, End of period $ 0 $ 0 $ 0 $ 0
-------- -------- -------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements
32
<PAGE> 33
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999, December 31, 1998, and December 31, 1997
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.
33
<PAGE> 34
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999, December 31, 1998, and December 31, 1997
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 September 30,
1999, the Company had no dilative common stock equivalents such as
stock options.
Year End
The Company has selected December 31st as its year-end.
34
<PAGE> 35
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999, December 31, 1998, and December 31, 1997
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 December
31, 1999, 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:
Net operation loss carry forward $ 2,450
Valuation allowance $ 2,450
Net deferred tax asset $ 0
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.
35
<PAGE> 36
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999, December 31, 1998, and December 31, 1997
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
Amended 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.
Until that time, the stockholders/officers and or directors have
committed to advancing the operating costs of the Company interest
free.
36
<PAGE> 37
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999, December 31, 1998, and December 31, 1997
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.
37
<PAGE> 38
PART III
Item 1. Exhibit Index
Sequential
No. Page No.
- --------------------------------------------------------------------------
(3) Articles of Incorporation and Bylaws
3.1 Articles of Incorporation 39
3.2 Bylaws 47
(12) Lock-Up Agreements
12.1 Robert Gonzalez 62
12.2 Larry Eck 63
12.3 Danny Howard Cooper 64
(23) Consents - Experts
23.1 Consent of Barry L. Friedman 65
(27) Financial Data Schedule
27.1 Financial Data Schedule 66
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
Date: February 7, 2000 MORNING SPLENDOR MANAGEMENT, INC.
By: /s/ Robert Gonzalez
-------------------------------
Robert Gonzalez
President
<PAGE> 1
EXHIBIT 3.1
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
DEC. 06, 1996
No. C-25210-96
Dean Heller,
Secretary of State
ARTICLES OF INCORPORATION
OF
MORNING SPLENDOR 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 file these Articles of Incorporation, hereby declaring and certifying that
the facts herein stated are true:
ARTICLE I
NAME
The name of the corporation is MORNING SPLENDOR 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 is Nevada Corporation 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 2.03. 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.
<PAGE> 2
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 directors shall determine, shall not be
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 not 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 serve as 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 Numbers of Directors. The number of directors
may be increased or decreased by a duly adopted amendment to the Bylaws of the
corporation.
ARTICLE VI
INCORPORATOR
The name and 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.
2
<PAGE> 3
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 not 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 this 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 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 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, judgments, 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 any undertaking by or on behalf to
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.
<PAGE> 4
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 the 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
POWER 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, each committee to
consist of at least one director of the corporation, which, to the extent
provided in the resolution or in the 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.
<PAGE> 5
IN WITNESS WHEREOF, I have hereunto set my hand this 2ND day of DECEMBER,
1996, hereby declaring and certifying that the facts stated hereinabove are
true.
/s/ CORT W. CHRISTIE
----------------------------------------
Cort W. Christie
(For Nevada Corporate Headquarters, Inc.)
ACKNOWLEDGMENT
STATE OF NEVADA )
) ss:
COUNTY OF CLARK )
On this 2ND day of DECEMBER, 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/ KRISTI BADOLATO
------------------------------
NOTARY PUBLIC in and for
and County and State
[SEAL OF THE KRISTI BADOLATO
STATE OF NEVADA] NOTARY PUBLIC - NEVADA
My appt. exp. Nov. 4, 2000
No. 96-5044-1
I, NEVADA CORPORATE HEADQUARTERS, INC. hereby accept as Resident Agent for the
previously named Corporation.
DECEMBER 2ND, 1996. /s/ KRISTI BADOLATO
---------------------------
Office Administrator
2
<PAGE> 6
No. C-25210-96
NOV. 29, 1999
Dean Heller,
Secretary of State
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(After Issuance of Stock) Filed by:
MORNING SPLENDOR MANAGEMENT, INC.
-------------------------------------
Name of Corporation
We the undersigned ROBERT GONZALEZ, President
-----------------------------------------
President or Vice President
LARRY ECK, Secretary of MORNING SPLENDOR MANAGEMENT, INC.
- --------------------- -----------------------------------------
Secretary or Assistant Secretary Name of Corporation
do hereby certify:
That the Board of Directors of said corporation at a meeting duly
convened, held on the 26th of October, 1999, adopted a resolution to amend the
original articles as follows:
RESOLVED: That Article IV, Section 4.01 of the Articles of Incorporation be
amended to read in full as follows:
"Section 4.01 - Number and Class. The total number of shares of stock which
the Corporation shall have authority to issue is Twenty-Five Million
(25,000,000). The par value of each of such shares is $.001. All such
shares are one class and are shares of Common Stock. Upon the amendment of
this Article to read as hereinabove set forth, each one (1) outstanding
shares is split, reconstituted and converted into one hundred (100) shares.
The Common Stock may be issued from 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."
The number of shares of the corporation outstanding and entitled to vote
on an amendment to the Articles of Incorporation is 21,000; 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.
/s/ ROBERT GONZALEZ
--------------------------------
Robert Gonzalez
President
/s/ LARRY ECK
--------------------------------
Larry Eck
Secretary
<PAGE> 7
State of CALIFORNIA )
) ss:
County of SAN DIEGO )
On November 20, 1999, personally appeared before me, a Notary Public,
Robert Gonzalez who acknowledged that he executed the above instrument.
---------------------
OFFICIAL SEAL
[SEAL] DEBORAH L. GARDNER /s/ DEBORAH L. GARDNER
NOTARY PUBLIC-CALIFORNIA -----------------------------
COMM. N. 1239385 Signature of Notary
SAN DIEGO COUNTY
MY COMM. EXP. OCT 23, 2003
--------------------------
(NOTARY STAMP OR SEAL)
State of CALIFORNIA )
) ss:
County of )
On November __, 1999, personally appeared before me, a Notary Public,
____________________ who acknowledged that he executed the above instrument.
/s/
-----------------------------
Signature of Notary
(NOTARY STAMP OR SEAL)
<PAGE> 8
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
================================================================================
State of California )
) ss.
County of San Diego )
On November 18, 1999 , before me, Kristina Lopez ,
----------------------- -----------------------------------------
Date Name and Title of Officer
(e.g., "Jane Doe, Notary Public")
[X] personally known to me
[ ] proved to me on the basis of satisfactory
evidence
- ------------------------------ to be the person(s) whose name(s) is/are
KRISTINA LOPEZ subscribed to the within instrument and
Commission # 1167143 acknowledged to me that he/she/they
[SEAL] Notary Public- executed the same in his/her/their
California authorized capacity(ies), and that by
San Diego County his/her/their signature(s) on the
My Comm. Expires Jan. 1, 2002 instrument the person(s), or the entity
- ----------------------------- upon behalf of which the person(s) acted,
executed the instrument.
WITNESS my hand and official seal.
Place Notary Seal Above. /s/ KRISTINA LOPEZ
-----------------------------------------
Signature of Notary Public
- -------------------------------- OPTIONAL ---------------------------------
Though the information below is not required by law, it may prove valuable to
persons relying on the document and could prevent fraudulent removal and
reattachment of this form to another document.
DESCRIPTION OF ATTACHED DOCUMENT
Title or Type of Document: Certificate of Amendment of Articles of Incorporation
-----------------------------------------------------
Document Date: October 26, 1999 Number of Pages: 1
------------------------------- -------------
Signer(s) Other Than Named Above:
-----------------------------------------------
CAPACITY(IES) CLAIMED BY SIGNER
--------------------
Signer's Name: Larry Eck Right Thumbprint
---------------------------------------- of Signer
[X] Individual --------------------
[ ] Corporate Officer - Title(s):
--------------------- Top of thumb here
[ ] Partner - [ ] Limited [ ] General
[ ] Attorney in Fact
[ ] Trustee
[ ] Guardian or Conservator
[ ] Other:
-------------------------------------------
Signer Is Representing: Self
------------------------------ --------------------
================================================================================
<PAGE> 1
EXHIBIT 3.2
BY-LAWS
OF
MORNING SPLENDOR MANAGEMENT, INC.
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE. The principal office for the transaction of
business of the corporation shall be fixed or may be changed by approval of a
majority of the authorized Directors, and additional offices may be established
and maintained at such other place or places as the Board of Directors may from
time to time designate.
Section 2. OTHER OFFICES. Branch or subordinate offices may at any time be
established by the Board of Directors at any place or places where the
corporation is qualified to do business.
ARTICLE II
DIRECTORS - MANAGEMENT
Section 1. RESPONSIBILITY OF BOARD OF DIRECTORS. Subject to the provisions
of applicable law and to any limitations in the Articles of Incorporation of the
corporation relating to action required to be approved by the Shareholders, or
by the outstanding shares, the business and affairs of the corporation shall be
managed and all corporate powers shall be exercised by or under the direction of
the Board of Directors. The Board may delegate the management of the day-to-day
operation of the business of the corporation to an executive committee or
others, provided that the business and affairs of the corporation shall be
managed and all corporate powers shall be exercised under the ultimate direction
of the Board.
Section 2. STANDARD OF CARE. Each Director shall perform the duties of a
Director, including the duties as a member of any committee of the Board upon
which the Director may serve, in good faith, in a manner such Director believes
to be in the best interests of the corporation, and with such care, including
reasonable inquiry, as an ordinary prudent person in a like position would use
under similar circumstances.
Section 3. NUMBER AND QUALIFICATION OF DIRECTORS. The authorized number of
Directors shall be three (3) until changed by a duly adopted amendment to the
Articles of Incorporation or by an amendment to this by-law adopted by the vote
or written consent of holders of a majority of the outstanding shares entitled
to vote.
1.
<PAGE> 2
Section 4. ELECTION AND TERM OF OFFICE OF DIRECTORS. Directors shall be
elected at each annual meeting of the Shareholders to hold office until the next
annual meeting. Each Director, including a Director elected to fill a vacancy,
shall hold office until the expiration of the term for which elected and until a
successor has been elected and qualified.
Section 5. VACANCIES. Vacancies in the Board of Directors may be filled by
a majority of the remaining Directors, though less than a quorum, or by a sole
remaining Director, except that a vacancy created by the removal of a Director
by the vote or written consent of the Shareholders or by court order may be
filled only by the vote of a majority of the shares entitled to vote represented
at a duly held meeting at which a quorum is present, or by the written consent
of holders of a majority of the outstanding shares entitled to vote. Each
Director so elected shall hold office until the next annual meeting of the
Shareholders and until a successor has been elected and qualified.
A vacancy or vacancies in the Board of Directors shall be deemed to exist
in the event of the death, resignation, or removal of any Director, or if the
Board of Directors by resolution declares vacant the office of a Director who
has been declared of unsound mind by an order of court or convicted of a felony,
or if the authorized number of Directors is increased, or if the Shareholders
fail, at any meeting of Shareholders at which any Director or Directors are
elected, to elect the number of Directors to be voted for at that meeting.
The Shareholders may elect a Director or Directors at any time to fill any
vacancy or vacancies not filled by the Directors, but any such election by
written consent shall require the consent of a majority of the outstanding
shares entitled to vote.
Any Director may resign effective on giving written notice to the Chairman
of the Board, the President, the Secretary, or the Board of Directors, unless
the notice specifies a later time for that resignation to become effective. If
the resignation of a Director is effective at a future time, the Board of
Directors may elect a successor to take office when the resignation becomes
effective.
No reduction of the authorized number of Directors shall have the effect of
removing any Director before that Directors' term of office expires.
Section 6. REMOVAL OF DIRECTORS. Subject to applicable law, the entire
Board of Directors or any individual Director may be removed from office. In
such case, the remaining Board members may elect a successor Director to fill
such vacancy for the remaining unexpired term of the Director so removed.
2.
<PAGE> 3
Section 7. NOTICE, PLACE AND MANNER OF MEETINGS. Meetings of the Board of
Directors may be called by the Chairman of the Board, or the President, or any
Vice President, or the Secretary, or any two (2) Directors and shall be held at
the principal executive office of the corporation, unless some other place is
designated in the notice of the meeting. Members of the Board may participate in
a meeting through use of a conference telephone or similar communications
equipment so long as all members participating in such a meeting can hear one
another. Accurate minutes of any meeting of the Board or any committee thereof,
shall be maintained by the Secretary or other Officer designated for that
purpose.
Section 8. ORGANIZATIONAL MEETINGS. The organizational meetings of the
Board of Directors shall be held immediately following the adjournment of the
Annual Meetings of the Shareholders.
Section 9. OTHER REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held at the corporate offices, or such other place as may be
designated by the Board of Directors, as follows:
Time of Regular Meeting: 9:00 A.M.
Date of Regular Meeting: Last Friday of every month
If said day shall fall upon a holiday, such meetings shall be held on the
next succeeding business day thereafter. No notice need be given of such regular
meetings.
Section 10. SPECIAL MEETINGS - NOTICES - WAIVERS. Special meetings of the
Board may be called at any time by the President or, if he or she is absent or
unable or refuses to act, by any Vice President or the Secretary or by any two
(2) Directors, or by one (1) Director if only one is provided.
At least forty-eight (48) hours notice of the time and place of special
meetings shall be delivered personally to the Directors or personally
communicated to them by a corporate Officer by telephone or telegraph. If the
notice is sent to a Director by letter, it shall be addressed to him or her at
his or her address as it is shown upon the records of the corporation, or if it
is not so shown on such records or if not readily ascertainable, at the place in
which the meetings of the Directors are regularly held. In case such notice is
mailed, it shall be deposited in the United States mail, postage prepaid, in the
place in which the principal executive officer of the corporation is located at
least four (4) days prior to the time of the holding of the meeting. Such
mailing, telegraphing, telephoning or delivery as above provided shall be due,
legal and personal notice to such Director.
When all of the Directors are present at any Directors' meeting, however,
called or noticed, and either (i) sign a written consent thereto on the records
of such meeting, or, (ii) if a majority of the Directors is present and if those
not present sign
3.
<PAGE> 4
a waiver of notice of such meeting or a consent to holding the meeting or an
approval of the minute thereof, whether prior to or after the holding of such
meeting, which said waiver, consent or approval shall be filed with the
Secretary of the corporation, or, (iii) if a Director attends a meeting without
notice but without protesting, prior thereto or at its commencement, the lack of
notice, then the transactions thereof are as valid as if had at a meeting
regularly called and noticed.
Section 11. DIRECTORS' ACTION BY UNANIMOUS WRITTEN CONSENT. Any action
required or permitted to be taken by the Board of Directors may be taken without
a meeting and with the same force and effect as if taken by a unanimous vote of
Directors, if authorized by a writing signed individually or collectively by all
members of the Board. Such consent shall be filed with the regular minutes of
the Board.
Section 12. QUORUM. A majority of the number of Directors as fixed by the
Articles of Incorporation or By-Laws shall be necessary to constitute a quorum
for the transaction of business, and the action of a majority of the Directors
present at any meeting at which there is a quorum, when duly assembled, is valid
as a corporate act; provided that a minority of the Directors, in the absence of
a quorum, may adjourn from time to time, but may not transact any business. A
meeting at which a quorum is initially present may continue to transact
business, notwithstanding the withdrawal of Directors, if any action taken is
approved by a majority of the required quorum for such meeting.
Section 13. NOTICE OF ADJOURNMENT. Notice of the time and place of holding
an adjourned meeting need not be given to absent Directors if the time and place
be fixed at the meeting adjourned and held within twenty-four (24) hours, but if
adjourned more than twenty-four (24) hours, notice shall be given to all
Directors not present at the time of the adjournment.
Section 14. COMPENSATION OF DIRECTORS. Directors, as such, shall not
receive any stated salary for their services, but by resolution of the Board a
fixed sum and expense of attendance, if any, may be allowed for attendance at
each regular and special meeting of the Board; provided that nothing herein
contained shall be construed to preclude any Director from serving the
corporation in any other capacity and receiving compensation therefor.
Section 15. COMMITTEES. Committees of the Board may be appointed by
resolution passed by a majority of the whole Board. Committees shall be composed
of two (2) or more members of the Board and shall have such powers of the Board
as may be expressly delegated to it by resolution of the Board of Directors,
except those powers expressly made non-delegable by applicable law.
Section 16. ADVISORY DIRECTORS. The Board of Directors from time to time
may elect one or more persons to be Advisory Directors who shall not by such
appointment be members of the Board of Directors. Advisory Directors shall be
available from time to
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time to perform special assignments specified by the President, to attend
meetings of the Board of Directors upon invitation and to furnish consultation
to the Board. The period during which the title shall be held may be prescribed
by the Board of Directors. If no period is prescribed, the title shall be held
at the pleasure of the Board.
Section 17. RESIGNATIONS. Any Director may resign effective upon giving
written notice to the Chairman of the Board, the President, the Secretary or the
Board of Directors of the Corporation, unless the notice specifies a later time
for the effectiveness of such resignation. If the resignation is effective at a
future time, a successor may be elected to take office when the resignation
becomes effective.
ARTICLE III
OFFICERS
Section 1. OFFICERS. The Officers of the corporation shall be a President,
a Secretary, and a Chief Financial Officer. The corporation may also have, at
the discretion of the Board of Directors, a Chairman of the Board, one or more
Vice Presidents, one or more Assistant Secretaries, or one or more Assistant
Treasurers, and such other Officers as may be appointed in accordance with the
provisions of Section 3 of this Article. Any number of offices may be held by
the same person.
Section 2. ELECTION. The Officers of the corporation, except such Officers
as may be appointed in accordance with the provisions of Section 3 or Section 5
of this Article, shall be chosen annually by the Board of Directors, and each
shall hold office until he or she shall resign or shall be removed or otherwise
disqualified to serve or a successor shall be elected and qualified.
Section 3. SUBORDINATE OFFICERS, ETC. The Board of Directors may appoint
such other Officers as the business of the corporation may require, each of whom
shall hold office for such period, have such authority and perform such duties
as are provided by the By-Laws or as the Board of Directors may from time to
time determine.
Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights, if
any, of any Officer under any contract of employment, any Officer may be
removed, either with or without cause, by the Board of Directors, at any regular
or special meeting of the Board, or except in case of an Officer chosen by the
Board of Directors by any Officer upon whom such power of removal may be
conferred by the Board of Directors.
Any Officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that
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notice; and, unless otherwise specified in that notice, the acceptance of the
resignation shall not be necessary to make it effective. Any resignation is
without prejudice to the rights, if any, of the corporation under any contract
to which the Officer is a party.
Section 5. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filed in the
manner prescribed in the By-Laws for regular appointment to that office.
Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if such an
officer be elected, shall, if present, preside at meetings of the Board of
Directors and exercise and perform such other powers and duties as may be from
time to time assigned by the Board of Directors or prescribed by the By-Laws. If
there is no President, the Chairman of the Board shall in addition be the Chief
Executive Officer of the corporation and shall have the powers and duties
prescribed in Section 7 of this Article.
Section 7. PRESIDENT/CHIEF EXECUTIVE OFFICER. Subject to such supervisory
powers, if any, as may be given by the Board of Directors to the Chairman of the
Board, if there be such an Officer, the President shall be the Chief Executive
Officer of the corporation and shall, subject to the control of the Board of
Directors, have general supervision, direction and control of the business and
Officers of the corporation. He or she shall preside at all meetings of the
Shareholders and in the absence of the Chairman of the Board, or if there be
none, at all meetings of the Board of Directors. The President shall be ex
officio a member of all the standing committees, including the Executive
Committee, if any, and shall have the general powers and duties of management
usually vested in the office of President of a corporation, and shall have such
other powers and duties as may be prescribed by the Board of Directors or the
By-Laws.
Section 8. VICE PRESIDENT. In the absence or disability of the President,
the Vice Presidents, if any, in order of their rank as fixed by the Board of
Directors, or if not ranked, the Vice President designated by the Board of
Directors, shall perform all the duties of the President, and when so acting
shall have all the powers of, and be subject to, all the restrictions upon, the
President. The Vice Presidents shall have such other powers and perform such
other duties as from time to time may be prescribed for them respectively by the
Board of Directors or the By-Laws.
Section 9. SECRETARY. The Secretary shall keep, or cause to be kept, a book
of minutes at the principal office or such other place as the Board of Directors
may order, of all meetings of Directors and Shareholders, with the time and
place of holding, whether regular or special, and if special, how authorized,
the notice thereof given, the names of those present at Directors' meetings, the
number of shares present or represented at Shareholders' meetings and the
proceedings thereof.
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The Secretary shall keep, or cause to be kept, at the principal office or
at the office of the corporation's transfer agent, a share register, or
duplicate share register showing the names of the Shareholders and their
addresses, the number and classes of shares held by each, the number and date of
certificates issued for the same, and the number and date of cancellation of
every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all the meetings
of the Shareholders and of the Board of Directors required by the By-Laws or by
law to be given. He or she shall keep the seal of the corporation in safe
custody, and shall have such other powers and perform such other duties as may
be prescribed by the Board of Directors or by the By-Laws.
Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall keep
and maintain, or cause to be kept and maintained in accordance with generally
accepted accounting principles, adequate and correct accounts of the properties
and business transactions of the corporation, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, earnings (or
surplus) and shares. The books of accounts shall at all reasonable times be open
to inspection by any Director.
This Officer shall deposit all moneys and other valuables in the name and
to the credit of the corporation with such depositaries as may be designated by
the Board of Directors. He or she shall disburse the funds of the corporation as
may be ordered by the Board of Directors, shall render to the President and
Directors, whenever they request it, an account of all of his or her
transactions and of the financial condition of the corporation, and shall have
such other powers and perform such other duties as may be prescribed by the
Board of Directors or the By-Laws.
ARTICLE IV
SHAREHOLDERS' MEETINGS
Section 1. PLACE OF MEETINGS. All meetings of the Shareholders shall be
held at the principal executive office of the corporation unless some other
appropriate and convenient location be designated for that purpose from time to
time by the Board of Directors.
Section 2. ANNUAL MEETINGS. The annual meetings of the Shareholders shall
be held, each year, at the time and on the day following:
Time of Meeting: 10:00 A.M.
Date of Meeting: April 20th
If this day shall be a legal holiday, then the meeting shall be held on the
next succeeding business day, at the same hour. At the annual meeting, the
Shareholders shall elect a Board of
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Directors, consider reports of the affairs of the corporation and transact such
other business as may be properly brought before the meeting.
Section 3. SPECIAL MEETINGS. Special meetings of the Shareholders may be
called at any time by the Board of Directors, the Chairman of the Board, the
President, a Vice President, the Secretary, or by one or more Shareholders
holding not less than one-tenth (1/10) of the voting power of the corporation.
Except as next provided, notice shall be given as for the annual meeting.
Upon receipt of a written request addressed to the Chairman, President,
Vice President, or Secretary, mailed or delivered personally to such Officer by
any person (other than the Board) entitled to call a special meeting of
Shareholders, such Officer shall cause notice to be given, to the Shareholders
entitled to vote, that a meeting will be held at a time requested by the person
or persons calling the meeting, not less than thirty-five (35) nor more than
sixty (60) days after the receipt of such request. If such notice is not given
within twenty (20) days after receipt of such request, the persons calling the
meeting may give notice thereof in the same manner provided by these By-Laws.
Section 4. NOTICE OF MEETINGS - REPORTS. Notice of meetings, annual or
special, shall be given in writing not less than ten (10) nor more than sixty
(60) days before the date of the meeting to Shareholders entitled to vote
thereat. Such notice shall be given by the Secretary or the Assistant Secretary,
or if there be no such Officer, or in the case of his or her neglect or refusal,
by any Director or Shareholder.
Such notices or any reports shall be given personally or by mail and shall
be sent to the Shareholder's address appearing on the books of the corporation,
or supplied by him or her to the corporation for the purpose of the notice.
Notice of any meeting of Shareholders shall specify the place, the day and
the hour of meeting, and (1) in case of a special meeting, the general nature of
the business to be transacted and no other business may be transacted, or (2) in
the case of an annual meeting, those matters which Board at date of mailing,
intends to present for action by the Shareholders. At any meetings where
Directors are to be elected notice shall include the names of the nominees, if
any, intended at date of notice to be presented by management for election.
If a Shareholder supplies no address, notice shall be deemed to have been
given if mailed to the place where the principal executive office of the
corporation is situated, or published at least once in some newspaper of general
circulation in the County of said principal office.
Notice shall be deemed given at the time it is delivered personally or
deposited in the mail or sent by other means of
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written communication. The Officer giving such notice or report shall prepare
and file an affidavit or declaration thereof.
When a meeting is adjourned for forty-five (45) days or more, notice of the
adjourned meeting shall be given as in case of an original meeting. Save, as
aforesaid, it shall not be necessary to give any notice of adjournment or of the
business to be transacted at an adjourned meeting other than by announcement at
the meeting at which said adjournment is taken.
Section 5. WAIVER OF NOTICE OR CONSENT BY ABSENT SHAREHOLDERS. The
transactions of any meeting of Shareholders, however called and notice, shall be
valid as through had at a meeting duly held after regular call and notice, if a
quorum be present either in person or by proxy, and if, either before or after
the meeting, each of the Shareholders entitled to vote, not present in person or
by proxy, sign a written waiver of notice, or a consent to the holding of such
meeting or an approval shall be filed with the corporate records or made a part
of the minutes of the meeting. Attendance shall constitute a waiver of notice,
unless objection shall be made as provided in applicable law.
Section 6. SHAREHOLDERS ACTING WITHOUT A MEETING - DIRECTORS. Any action
which may be taken at a meeting of the Shareholders, may be taken without a
meeting or notice of meeting if authorized by a writing signed by all of the
Shareholders entitled to vote at a meeting for such purpose, and filed with the
Secretary of the corporation, provided, further, that while ordinarily Directors
can be elected by unanimous written consent, if the Directors fail to fill a
vacancy, then a Director to fill that vacancy may be elected by the written
consent of persons holding a majority of shares entitled to vote for the
election of Directors.
Section 7. OTHER ACTIONS WITHOUT A MEETING. Unless otherwise provided for
under applicable law or the Articles of Incorporation, any action which may be
taken at any annual or special meeting of Shareholders may be taken without a
meeting and without prior notice, if a consent in writing, setting forth the
action so taken, signed by the holders of outstanding shares having not less
than the minimum number of votes that would be necessary to authorize to take
such action at a meeting at which all shares entitled to vote thereon were
present and voted.
Unless the consents of all Shareholders entitled to vote have been
solicited in writing,
(1) Notice of any Shareholder approval without a meeting by less than
unanimous written consent shall be given at least ten (10) days before the
consummation of the action authorized by such approval, and
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(2) Prompt notice shall be given of the taking of any other corporate
action approved by Shareholders without a meeting be less than unanimous
written consent, to each of those Shareholders entitled to vote who have
not consented in writing.
Any Shareholder giving a written consent, or the Shareholder's
proxyholders, or a transferee of the shares of a personal representative of the
Shareholder or their respective proxyholders, may revoke the consent by a
writing received by the corporation prior to the time that written consents of
the number of shares required to authorize the proposed action have been filed
with the Secretary of the corporation, but may not do so thereafter. Such
revocation is effective upon its receipt by the Secretary of the corporation.
Section 8. QUORUM. The holder of a majority of the shares entitled to vote
thereat, present in person, or represented by proxy, shall constitute a quorum
at all meetings of the Shareholders for the transaction of business except as
otherwise provided by law, by the Articles of Incorporation, or by these
By-Laws. If, however, such majority shall not be present or represented at any
meeting of the Shareholders, the shareholders entitled to vote thereat, present
in person, or by proxy, shall have the power to adjourn the meeting from time to
time, until the requisite amount of voting shares shall be present. At such
adjourned meeting at which the requisite amount of voting shares shall be
represented, any business may be transacted which might have been transacted at
a meeting as originally notified.
If a quorum be initially present, the Shareholders may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
Shareholders to leave less than a quorum, if any action taken is approved by a
majority of the Shareholders required to initially constitute a quorum.
Section 9. VOTING. Only persons in whose names shares entitled to vote
stand on the stock records of the corporation on the day of any meeting of
Shareholders, unless some other day be fixed by the Board of Directors for the
determination of Shareholders of record, and then on such other day, shall be
entitled to vote at such meeting.
Provided the candidate's name has been placed in nomination prior to the
voting and one or more Shareholders has given notice at the meeting prior to the
voting of the Shareholder's intent to cumulate the Shareholder's votes, every
Shareholder entitled to vote at any election for Directors of any corporation
for profit may cumulate their votes and give one candidate a number of votes
equal to the number of Directors to be elected multiplied by the number of votes
to which his or her shares are entitled to, or distribute his or her votes on
the same principle among as many candidates as he or she thinks fit.
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The candidates receiving the highest number of votes up to the number of
Directors to be elected are elected.
The Board of Directors may fix a time in the future not exceeding thirty
(30) days preceding the date of any meeting of Shareholders or the date fixed
for the payment of any dividend or distribution, or for the allotment of rights,
or when any change or conversion or exchange of shares shall go into effect, as
a record date for the determination of the Shareholders entitled to notice of
and to vote at any such meeting, or entitled to receive any such dividend or
distribution, or any allotment of rights or to exercise the rights in respect to
any such change, conversion or exchange of shares. In such case only
Shareholders of record on the date so fixed shall be entitled to notice of and
to vote at such meeting, to receive such dividends, distribution or allotment of
rights, or to exercise such rights, as the case may be notwithstanding any
transfer of any share on the books of the corporation after any record date
fixed as aforesaid. The Board of Directors may close the books of the
corporation against transfers of shares during the whole or any part of such
period.
Section 10. PROXIES. Every Shareholder entitled to vote, or to execute
consents, may do so, either in person or by written proxy, executed in
accordance with the provisions of applicable law filed with the Secretary of the
corporation.
Section 11. ORGANIZATION. The President, or in the absence of the
President, any Vice President, shall call the meeting of the Shareholders to
order, and shall act as Chairman of the meeting. In the absence of the President
and all of the Vice Presidents, Shareholders shall appoint a Chairman for such
meeting. The Secretary of the corporation shall act as Secretary of all meetings
of the Shareholders, but in the absence of the Secretary at any meeting of the
Shareholders, the presiding Officer may appoint any person to act as Secretary
of the meeting.
Section 12. INSPECTORS OF ELECTION. In advance of any meeting of
Shareholders, the Board of Directors may, if they so elect, appoint inspectors
of election to act at such meeting or any adjournment thereof. If inspectors of
election be not so appointed, or if any persons so appointed fail to appear or
refuse to act, the chairman of any such meeting may, and on the request of any
Shareholder or his or her proxy shall, make such appointment at the meeting in
which case the number of inspectors shall be either one (1) or three (3) as
determined by a majority of the Shareholders represented at the meeting.
ARTICLE V
CERTIFICATES AND TRANSFER OF SHARES
Section 1. CERTIFICATES FOR SHARES. Certificates for shares shall be of
such form and device as the Board of Directors
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may designate and shall state the name of the record holder of the shares
represented thereby; its number; date of issuance; the number of shares for
which it is issued; a statement of the rights, privileges preferences and
restriction, if any; a statement as to the redemption or conversion, if any; a
statement of liens or restrictions upon transfer or voting, if any; if the
shares be assessable or, if assessments are collectible by personal action, a
plain statement of such facts.
All certificates shall be signed in the name of the corporation by the
Chairman of the Board or Vice Chairman of the Board or the President or Vice
President and by the Chief Financial Officer or an Assistant Treasurer or the
Secretary or any Assistant Secretary, certifying the number of shares and the
class or series of shares owned by the Shareholder.
Any or all of the signatures on the certificate may be facsimile. In case
any Officer, transfer agent, or registrar who has signed or whose facsimile
signature has been placed on a certificate shall have ceased to be that Officer,
transfer agent, or registrar before that certificate is issued, it may be issued
by the corporation with the same effect as if that person were an Officer,
transfer agent, or registrar at the date of issuance.
Section 2. TRANSFER ON THE BOOKS. Upon surrender to the Secretary or
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 to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 3. LOST OR DESTROYED CERTIFICATES. Any person claiming a
certificate of stock to be lost or destroyed shall make an affidavit or
affirmation of that fact and shall, if the Directors so require, give the
corporation a bond of indemnity, in form and with one or more sureties
satisfactory to the Board, in at least double the value of the stock represented
by said certificate, whereupon a new certificate may be issued in the same
tender and for the same number of shares as the one alleged to be lost or
destroyed.
Section 4. TRANSFER AGENTS AND REGISTRARS. The Board of Directors may
appoint one or more transfer agents or transfer clerks, and one or more
registrars which shall be an incorporated bank or trust company, either domestic
or foreign, who shall be appointed at such times and places as the requirements
of the corporation may necessitate and the Board of Directors may designate.
Section 5. CLOSING STOCK TRANSFER BOOKS - RECORD DATE. In order that the
corporation may determine the Shareholders entitled to notice of any meeting or
to vote or entitled to receive payment of any dividend or other distribution or
allotment of any rights or
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entitled to exercise any rights in respect to any other lawful action, the Board
may fix, in advance, a record date, which shall not be more than sixty (60) days
nor less than ten (10) days prior to the date of such meeting nor more than
sixty (60) days prior to any other action.
If no record date is fixed; the record date for determining Shareholders
entitled to notice of or to vote at a meeting of Shareholders shall be at the
close of business on the business day next preceding the day on which notice is
given or if notice is waived, at the close of business on the business day next
preceding the day on which the meeting is held. The record date for determining
Shareholders entitled to give consent to corporate action in writing without a
meeting, when no prior action by the Board is necessary, shall be the day on
which the first written consent is given.
The record date for determining Shareholders for any other purpose shall be
at the close of business on the day on which the Board adopts the resolution
relating thereto, or the sixtieth (60th) day prior to the date of such other
action, whichever is later.
ARTICLE VI
RECORDS - REPORTS - INSPECTION
Section 1. RECORDS. The corporation shall maintain, in accordance with
generally accepted accounting principles, adequate and correct accounts, books
and records of its business and properties. All of such books, records and
accounts shall be kept at its principal executive office as fixed by the Board
of Directors from time to time.
Section 2. INSPECTION OF BOOKS AND RECORDS. All books and records shall be
open to inspection of the Directors and Shareholders from time to time and in
the manner provided under applicable law.
Section 3. CERTIFICATION AND INSPECTION OF BY-LAWS. The original or a copy
of these By-Laws, as amended or otherwise altered to date, certified by the
Secretary, shall be kept at the corporation's principal executive office and
shall be open to inspection by the Shareholders at all reasonable times during
office hours.
Section 4. CHECK, DRAFTS, ETC. All checks, drafts, or other orders for
payment of money, notes or other evidences of indebtedness, issued in the name
of or payable to the corporation, shall be signed or endorsed by such person or
persons and in such manner as shall be determined from time to time by the Board
of Directors.
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Section 5. CONTRACT, ETC. -- HOW EXECUTED. The Board of Directors, except
as in the By-Laws otherwise provided, may authorize any Officer or Officers,
agent or agents, to enter into any contract or execute any instrument in the
name of and on behalf of the corporation. Such authority may be general or
confined to specific instances. Unless so authorized by the Board of Directors,
no Officer, agent or employee shall have any power or authority to bind the
corporation by any contract or agreement, or to pledge its credit, or to render
it liable for any purpose or to any amount except as may be provided under
applicable law.
ARTICLE VII
ANNUAL REPORTS
Section 1. REPORT TO SHAREHOLDERS, DUE DATE. The Board of Directors shall
cause an annual report to be sent to the Shareholders not later than one hundred
twenty (120) days after the close of the fiscal or calendar year adopted by the
corporation. This report shall be sent at least fifteen (15) days before the
annual meeting of Shareholders to be held during the next fiscal year and in the
manner specified in Section 4 of the Article IV of these By-Laws for giving
notice to Shareholders of the corporation. The annual report shall contain a
balance sheet as of the end of the fiscal year and an income statement and
statement of changes in financial position for the fiscal year, accompanied by
any report of independent accountants or, if there is no such report, the
certificate of an authorized officer of the corporation that the statements were
prepared without audit from the books and records of the corporation.
ARTICLE VIII
AMENDMENTS TO BY-LAWS
Section 1. AMENDMENT BY SHAREHOLDERS. New By-Laws may be adopted or these
By-Laws may be amended or repealed by the vote or written consent of holders of
a majority of the outstanding shares entitled to vote; provided, however, that
if the Articles of Incorporation of the corporation set forth the number of
authorized Directors of the corporation, the authorized number of Directors may
be changed only by an amendment of the Article of Incorporation.
Section 2. POWERS OF DIRECTORS. Subject to the right of the Shareholders to
adopt, amend or repeal By-Laws, as provided in Section 1 of this Article VIII,
and the limitations, if any, under law, the Board of Directors may adopt, amend
or repeal any of these By-Laws other than a By-Law or amendment thereof changing
the authorized number of Directors.
Section 3. RECORD OF AMENDMENTS. Whenever an amendment or new By-Law is
adopted, it shall be copied in the book of By-Laws
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with the original By-Laws, in the appropriate place. If any By-Law is repealed,
the fact of repeal with the date of the meeting at which the repeal was enacted
or written assent was filed shall be stated in said book.
ARTICLE IX
CORPORATE SEAL
Section 1. Seal. The corporate seal shall be circular in form, and shall
have inscribed thereon the name of the corporation, the date and State of
incorporation.
ARTICLE X
MISCELLANEOUS
Section 1. REPRESENTATION OF SHARES IN OTHER CORPORATIONS. Shares of other
corporations standing in the name of this corporation may be voted or
represented and all incidents thereto may be exercised on behalf of the
corporation by the Chairman of the Board, the President or any Vice President
and the Secretary or an Assistant Secretary.
Section 2. SUBSIDIARY CORPORATIONS. Shares of this corporation owned by a
subsidiary shall not be entitled to vote on any matter. A subsidiary for these
purposes is defined as a corporation, the shares of which possessing more than
25% of the total combined voting power of all classes of shares entitled to
vote, are owned directly or indirectly through one (1) or more subsidiaries.
Section 3. INDEMNITY. Subject to applicable law, the corporation may
indemnify any Director, Officer, agent or employee as to those liabilities and
on those terms and conditions as appropriate. In any event, the corporation
shall have the right to purchase and maintain insurance on behalf of any such
persons whether or not the corporation would have the power to indemnify such
person against the liability insured against.
Section 4. ACCOUNTING YEAR. The accounting year of the corporation shall be
fixed by resolution of the Board of Directors.
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EXHIBIT 12.1
January 5, 2000
Morning Splendor Management, Inc.
1105 Terminal Way, Suite 202
Century Park
Reno, Nevada 89502
Re: Morning Splendor Management, Inc.
Gentlemen:
The undersigned is the record owner of 500,000 shares of the common stock of
Morning Splendor Management, Inc., par value $.001 per share (the "Shares), such
Shares are eligible for sale under Rule 144 promulgated under the Securities Act
of 1933, as amended, subject to certain limitations included in said Rule.
The Company intends to file a Form 10SB12G with the Securities and Exchange
Commission. Thereafter, during the pendency of said filing, the undersigned,
together with the other majority shareholders, and each of them, agreed as
follows:
1. The undersigned will not sell, contract to sell, or make any other
disposition of, or grant any purchase option for the sale of, any of the
shares of the common stock owned by the undersigned, directly or
indirectly, until such time as the Company has entered into a merger or
acquisition or the Company is no longer classified as a "blank check"
company, as that term is defined in the Form 10SB12G on file with the
Securities and Exchange Commission, whichever first occurs.
2. The undersigned acknowledges that Pacific Stock Transfer Company, 5855 S.
Pecos Road, Suite D, Las Vegas, Nevada 89l20, the transfer agent for the
Company, has been advised of the restrictions described herein and that any
attempts by the undersigned to violate said restriction may result in legal
action(s) by the Company. The undersigned further agrees, upon the request
of the Company, that in addition to any other restrictions reflecting that
the Shares have not been registered under the Securities Act of 1933, as
amended, may be placed on individual certificates issued.
Very truly yours,
/s/ ROBERT GONZALEZ
- ------------------------------
ROBERT GONZALEZ
cc: Pacific Stock Transfer Company
<PAGE> 1
EXHIBIT 12.2
January 5, 2000
Morning Splendor Management, Inc.
1105 Terminal Way, Suite 202
Century Park
Reno, Nevada 89502
Re: Morning Splendor Management, Inc.
Gentlemen:
The undersigned is the record owner of 600,000 shares of the common stock of
Morning Splendor Management, Inc., par value $.001 per share (the "Shares), such
Shares are eligible for sale under Rule 144 promulgated under the Securities Act
of 1933, as amended, subject to certain limitations included in said Rule.
The Company intends to file a Form 10SB12G with the Securities and Exchange
Commission. Thereafter, during the pendency of said filing, the undersigned,
together with the other majority shareholders, and each of them, agreed as
follows:
1. The undersigned will not sell, contract to sell, or make any other
disposition of, or grant any purchase option for the sale of, any of the
shares of the common stock owned by the undersigned, directly or
indirectly, until such time as the Company has entered into a merger or
acquisition or the Company is no longer classified as a "blank check"
company, as that term is defined in the Form 10SB12G on file with the
Securities and Exchange Commission, whichever first occurs.
2. The undersigned acknowledges that Pacific Stock Transfer Company, 5855 S.
Pecos Road, Suite D, Las Vegas, Nevada 89l20, the transfer agent for the
Company, has been advised of the restrictions described herein and that any
attempts by the undersigned to violate said restriction may result in legal
action(s) by the Company. The undersigned further agrees, upon the request
of the Company, that in addition to any other restrictions reflecting that
the Shares have not been registered under the Securities Act of 1933, as
amended, may be placed on individual certificates issued.
Very truly yours,
/s/ LARRY ECK
- -------------------------------
LARRY ECK
cc: Pacific Stock Transfer Company
<PAGE> 1
EXHIBIT 12.3
January 5, 2000
Morning Splendor Management, Inc.
1105 Terminal Way, Suite 202
Century Park
Reno, Nevada 89502
Re: Morning Splendor Management, Inc.
Gentlemen:
The undersigned is the record owner of 350,000 shares of the common stock of
Morning Splendor Management, Inc., par value $.001 per share (the "Shares), such
Shares are eligible for sale under Rule 144 promulgated under the Securities Act
of 1933, as amended, subject to certain limitations included in said Rule.
The Company intends to file a Form 10SB12G with the Securities and Exchange
Commission. Thereafter, during the pendency of said filing, the undersigned,
together with the other majority shareholders, and each of them, agreed as
follows:
1. The undersigned will not sell, contract to sell, or make any other
disposition of, or grant any purchase option for the sale of, any of the
shares of the common stock owned by the undersigned, directly or
indirectly, until such time as the Company has entered into a merger or
acquisition or the Company is no longer classified as a "blank check"
company, as that term is defined in the Form 10SB12G on file with the
Securities and Exchange Commission, whichever first occurs.
2. The undersigned acknowledges that Pacific Stock Transfer Company, 5855 S.
Pecos Road, Suite D, Las Vegas, Nevada 89l20, the transfer agent for the
Company, has been advised of the restrictions described herein and that any
attempts by the undersigned to violate said restriction may result in legal
action(s) by the Company. The undersigned further agrees, upon the request
of the Company, that in addition to any other restrictions reflecting that
the Shares have not been registered under the Securities Act of 1933, as
amended, may be placed on individual certificates issued.
Very truly yours,
/s/ DANNY HOWARD COOPER
- -----------------------------------
DANNY HOWARD COOPER
cc: Pacific Stock Transfer Company
<PAGE> 1
EXHIBIT 23.1
BARRY L. FRIEDMAN, P.C.
CERTIFIED PUBLIC ACCOUNTANT
1582 TULITA DRIVE OFFICE (702) 361-8414
LAS VEGAS, NEVADA 89123 FAX NO. (702) 896-0278
To Whom It May Concern: January 21, 2000
The firm of Barry L. Friedman, P.C., Certified Public Accountant consents to the
inclusion of their report of January 21, 2000, on the Financial Statements of
Morning Splendor Management, Inc., as of December 31, 1999, in any filings that
are necessary now or in the near future with the U.S. Securities and Exchange
Commission.
Very truly yours,
/s/ BARRY L. FRIEDMAN
- ---------------------------
Barry L. Friedman
Certified Public Accountant
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 350
<BONDS> 0
0
0
<COMMON> 2,100,000
<OTHER-SE> (350)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (350)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (350)
<EPS-BASIC> (.001)
<EPS-DILUTED> (.001)
</TABLE>
