<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000.
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION FROM _______ TO ________.
COMMISSION FILE NUMBER 0-29369
MORNING SPLENDOR MANAGEMENT, INC.
----------------------------------------------
(Name of Small Business Issuer in its charter)
Nevada 88-0409146
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1105 Terminal Way, Suite 202 Century Park
Reno, Nevada 89502
----------------------------------------- ----------
(Address of principal executive offices) (Zip code)
N/A
----------------------------------------------
(Former name, former address and former fiscal
year, if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
At September 30, 2000, there were outstanding 2,100,000 shares of the
Registrant's Common Stock, $.001 par value.
Transitional Small Business Disclosure Format: Yes [ ] No [X]
<PAGE> 2
PART I
FINANCIAL INFORMATION
Item I. Financial Statements
MORNING SPLENDOR MANAGEMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
September 30, 2000
December 31, 1999
<PAGE> 3
TABLE OF CONTENTS
PAGE
ACCOUNTANT'S LETTER 1
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BALANCE SHEET - ASSETS 2
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BALANCE SHEET - LIABILITIES AND STOCKHOLDERS' EQUITY 3
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STATEMENT OF OPERATIONS 4-5
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STATEMENT OF STOCKHOLDERS' EQUITY 6
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STATEMENT OF CASH FLOWS 7-8
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NOTES TO FINANCIAL STATEMENTS 9-13
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<PAGE> 4
1582 Tulita Drive OFFICE (702) 361-8414
Las Vegas, NV 89123 FAX NO.(702) 896-0278
INDEPENDENT AUDITORS' REPORT
Board of Directors October 17, 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 September 30, 2000, and
December 31, 1999, and the related statements of stockholders' equity for
September 30, 2000, and December 31, 1999, and statements of operations and cash
flows for the three months ended September 30, 2000, and June 30, 1999, for the
nine months ended September 30, 2000, and June 30, 1999, and the two years ended
December 31, 1999, and December 31, 1998, and the period December 6, 1996,
(inception), to September 30, 2000. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of MORNING SPLENDOR
MANAGEMENT, INC. (A Development Stage Company), as of September 30, 2000, and
December 31, 1999, and the related statements of stockholders' equity for
September 30, 2000, and December 31, 1999, and statements of operations and cash
flows for the three months ended September 30, 2000, and June 30, 1999, for the
nine months ended September 30, 2000, and June 30, 1999, and the two years ended
December 31, 1999, and December 31, 1998, and the period December 6, 1996,
(inception), to September 30, 2000, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note #5 to the
financial statements, the Company has had no 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
<PAGE> 5
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
9 Mos. Ending Year Ended
Sept. 30, 2000 Dec.31, 1999
-------------- -------------
<S> <C> <C>
CURRENT ASSETS $ 0 $ 0
-------------- -------------
TOTAL CURRENT ASSETS $ 0 $ 0
-------------- -------------
OTHER ASSETS $ 0 $
-------------- -------------
TOTAL OTHER ASSETS $ 0 $ 0
-------------- -------------
TOTAL ASSETS $ 0 $ 0
-------------- -------------
</TABLE>
The accompanying notes are an integral part of these financial statements
- 2 -
<PAGE> 6
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
9 Mos. Ending Year Ended
Sept. 30, 2000 Dec.31, 1999
-------------- -------------
<S> <C> <C>
CURRENT LIABILITIES
Officers Advances (Note #8) $ 24,821 $ 350
-------------- -------------
TOTAL CURRENT LIABILITIES $ 24,821 $ 350
-------------- -------------
STOCKHOLDERS EQUITY (Note #4)
Common stock, $.001 par value
authorized 25,000,000 shares
issued and outstanding at
December 31, 1999 - 2,100,000 shares $ 2,100
September 30, 2000 - 2,100,000 shares $ 2,100
Additional paid in Capital 0 0
Accumulated loss during
the development stage -26,921 -2,450
-------------- -------------
TOTAL STOCKHOLDERS' EQUITY $ -28,821 $ -350
-------------- ------------
TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY $ 0 $ 0
-------------- -------------
</TABLE>
The accompanying notes are an integral part of these financial statements
- 3 -
<PAGE> 7
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
3 Mos.Ended 3 Mos.Ended 9 Mos.Ended 9 Mos.Ended
Sep. 30, Sep. 30, Sep. 30, Sep. 30,
2000 1999 2000 1999
------------- -------------- -------------- -----------
<S> <C> <C> <C> <C>
REVENUE $ 0 $ 0 $ 0 $ 0
------------- -------------- -------------- -----------
EXPENSES
General, Selling
and Administrative $ 500 $ 0 $ 24,471 $ 350
------------ -------------- -------------- -----------
Total Expenses $ 500 $ 0 $ 24,471 $ 350
------------ -------------- -------------- -----------
Net Profit/Loss (-) $ -500 $ 0 $ -24,471 $ -350
------------ -------------- -------------- -----------
Net Loss per share -
Basic and diluted
(Note #2) $ -.0002 $ NIL $ -.0117 $ -.0002
------------- ------------ -------------- -----------
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
- 4 -
<PAGE> 8
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS (Continued)
<TABLE>
<CAPTION>
Dec.6, 1996
Year Ended Year Ended (Inception)
December 31, December 31, to Sep. 30,
1999 1998 2000
---- ---- ----
<S> <C> <C> <C>
REVENUE $ 0 $ 0 $ 0
--------------- --------------- --------------
EXPENSES
General, Selling
and Administrative $ 350 $ 0 $ 26,921
--------------- --------------- --------------
Total Expenses $ 350 $ 0 $ 26,921
--------------- --------------- --------------
Net Profit/Loss (-) $ -350 $ -0 $ -26,921
--------------- --------------- --------------
Net Loss per share -
Basic and diluted
(Note #2) $ -.0002 $ NIL $ -.0128
--------------- -------------- --------------
Weighted average
number of common
shares outstanding 2,100,000 2,100,000 2,100,000
--------------- --------------- --------------
</TABLE>
The accompanying notes are an integral part of these financial statements
- 5 -
<PAGE> 9
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Additional Accumu-
Common Stock paid-in lated
Shares Amount Capital Deficit
--------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
Balance,
December 31, 1998 21,000 $ 2,100 $ 0 $ -2,100
November 29, 1999
Changed from no par
value to $0.001 -2,079 +2,079
November 29, 1999
Forward stock split
100:1 +2,079 -2,079
Net loss, Year Ended
December 31, 1999 -350
--------------- ---------------- --------------- ----------------
Balance,
December 31, 1999 2,100,000 $ 2,100 $ 0 $ -2,450
Net Loss
January 1, 2000, to
September 30, 2000 -24,471
--------------- ---------------- --------------- ----------------
Balance,
September 30, 2000 2,100,000 $ 2,100 $ 0 $ -26,921
--------------- ---------------- --------------- ----------------
</TABLE>
The accompanying notes are an integral part of these financial statements
- 6 -
<PAGE> 10
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
3 Mos.Ended 3 Mos.Ended 9 Mos.Ended 9 Mos.Ended
Sep. 30, Sep. 30, Sep. 30, Sep. 30,
2000 1999 2000 1999
---------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Cash Flow from
Operating Activities
Net Loss $ -500 $ 0 $ -24,471 $ -350
Adjustment to reconcile
net loss to net cash
provided by operating
activities
Changes in Assets
and Liabilities
Increase in current
Liabilities
Officers Advances +500 0 +24,471 +350
---------------- ----------------- ----------------- -----------------
Net cash used in
operating Activities $ 0 $ 0 $ 0 $ 0
Cash Flows from
Investing Activities 0 0 0 0
Cash Flows from
Financing Activities
Issuance of Common
Stock 0 0 0 0
---------------- ----------------- ----------------- -----------------
Net increase
(decrease)
in cash $ 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
- 7 -
<PAGE> 11
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS (CONTINUED)
<TABLE>
<CAPTION>
Dec.6, 1996
Year Ended Year Ended (Inception)
December 31, December 31, to Sep. 30,
1999 1998 2000
--------------- --------------- --------------
<S> <C> <C> <C>
Cash Flow from
Operating Activities
Net Loss $ -350 $ 0 $ -26,921
Adjustment to reconcile
net loss to net cash
provided by operating
activities
Changes in Assets
and Liabilities
Increase in current
Liabilities
Officers Advances +350 0 +24,821
--------------- --------------- --------------
Net cash used in
operating Activities $ 0 $ 0 $ -2,100
Cash Flows from
Investing Activities 0 0 0
Cash Flows from
Financing Activities
Issuance of Common
Stock 0 0 +2,100
--------------- --------------- --------------
Net increase
(decrease)
in cash $ 0 $ 0 $ 0
Cash, beginning
of period 0 0 0
--------------- --------------- --------------
Cash, end of period $ 0 $ 0 $ 0
--------------- --------------- --------------
</TABLE>
The accompanying notes are an integral part of these financial statements
- 8 -
<PAGE> 12
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2000, and December 31, 1999
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized December 6, 1996, under the laws of the State
of Nevada as MORNING SPLENDOR MANAGEMENT, INC. The Company currently
has no operations and in accordance with SFAS #7, is considered a
development stage company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements
and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those
estimates.
Cash and equivalents
The Company maintains a cash balance in a non-interest-bearing
bank that currently does not exceed federally insured limits.
For the purpose of the statements of cash flows, all highly
liquid investments with the maturity of three months or less
are considered to be cash equivalents. There are no cash
equivalents as of December 31, 1999, or September 30, 2000.
- 9 -
<PAGE> 13
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
September 30, 2000, and December 31, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial
Accounting Standards No. 109 (SFAS #109) "Accounting for
Income Taxes". A deferred tax asset or liability is recorded
for all temporary difference between financial and tax
reporting. Deferred tax expense (benefit) results from the net
change during the year of deferred tax assets and liabilities.
Reporting on Costs of Start-Up Activities
Statement of Position 98-5 ("SOP 98-5"), "Reporting on the
Costs of Start-Up Activities" which provides guidance on the
financial reporting of start-up costs and organization costs.
It requires most costs of start-up activities and organization
costs to be expensed as incurred. SOP 98-5 is effective for
fiscal years beginning after December 15, 1998. 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, 2000, the
Company had no dilative common stock equivalents such as stock
options.
Year End
The Company has selected December 31st as its year-end.
- 10 -
<PAGE> 14
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
September 30, 2000, and December 31, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Year 2000 Disclosure
The Y2K issued had no effect on this Company.
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended September
30, 2000. 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 between 2014
and 2019.
This carry forward may be limited upon the consummation of a business
combination under IRC Section 381.
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.
- 11 -
<PAGE> 15
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2000, and December 31, 1999
NOTE 4 - STOCKHOLDERS' EQUITY (CONTINUED)
On December 6, 1996, the company issued 21,000 shares of its no par
value common stock in consideration of $2,100 in cash.
On November 29, 1999, the State of Nevada approved the Company's
restated Articles of Incorporation, which increased its capitalization
from 25,000 common shares to 25,000,000 common shares. The no par value
was changed to $0.001.
On November 29, 1999, the Company forward split its common stock 100:1,
thus increasing the number of outstanding common stock shares from
21,000 shares to 2,100,000.
NOTE 5 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business. However, the Company does not have
significant cash or other material assets, nor does it have an
established source of revenues sufficient to cover its operating costs
and to allow it to continue as a going concern. It is the intent of the
Company to seek a merger with an existing, operating company.
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.
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<PAGE> 16
MORNING SPLENDOR MANAGEMENT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
September 30, 2000, and December 31, 1999
NOTE 7 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
shares of common stock.
NOTE 8 - OFFICERS ADVANCES
While the Company is seeking additional capital through a merger with
an existing company, an officer of the Company has advanced funds on
behalf of the Company to pay for any costs incurred by it. These funds
are interest free.
- 13 -
<PAGE> 17
Item II. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The Company has not commenced business activities and has no assets or
operations. However, the Company has entered into negotiations to effectuate a
business combination with the shareholder(s) of Creative Technology &
Interactive Entertainment Group, Inc. (See Item 5(c) below).
The Company is dependent upon its officers to meet any de minimis
costs which may occur. Robert Gonzalez, an officer and director of the Company,
has agreed to provide the necessary funds, without interest, for the Company to
comply with the Securities Exchange Act of 1934, as amended, provided that he is
an officer and director of the Company when the obligation is incurred. All
advances are interest-free.
In addition, since the Company has had no operating history nor any
revenues or earnings from operations, with no significant assets or financial
resources, the Company will in all likelihood sustain operating expenses without
corresponding revenues, at least until the consummation of a business
combination. This may result in the Company incurring a net operating loss which
will increase continuously until the Company can consummate a business
combination with a profitable business opportunity and consummate such a
business combination.
This discussion may contain certain forward looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. Actual
results could differ materially from those forward-looking statements. The
factors that may cause actual results to differ materially is that the Company
has no arrangement, agreement or understanding with respect to engaging in a
merger with, joint venture with or acquisition of, a private or public company
and that there can be no assurance that the Company will be successful in
identifying and evaluating suitable business opportunities or including a
business combination.
Item III. Qualitative and Quantitative Disclosures About Market Risk.
The Company has neither considered or conducted any research
concerning qualitative and quantitative market risk.
<PAGE> 18
PART II
OTHER INFORMATION
Item 1 - Legal Proceedings ................................................None
Item 2 - Changes in the Rights of the Company's
Security Holders .................................................None
Item 3 - Defaults by the Company on its
Senior Securities ................................................None
Item 4 - Submission of Matter to Vote of Security
Holders ..........................................................None
Item 5 - Other Information
(a) Board Meetings.
The board held one meeting during the current quarter, including both
regularly scheduled and special meetings and actions by unanimous written
consent.
The board of directors has not established any audit committee. In
addition, the Company does not have any other compensation or executive or
similar committees. The Company will not, in all likelihood, establish any audit
committee until such time as the Company completes a business combination, of
which there can be no assurance. The Company recognizes that an audit committee,
when established, will play a critical role in the financial reporting system of
the Company by overseeing and monitoring management's and the independent
auditors' participation in the financial reporting process. At such time as the
Company establishes an audit committee, its additional disclosures with the
Company's auditors and management may promote investor confidence in the
integrity of the financial reporting process.
(b) Committees.
Until such time as an audit committee has been established, the full
board of directors will undertake those tasks normally associated with an audit
committee to include, but not by way of limitation, the (i) review and
discussion of the audited financial statements with management, (ii) discussions
with the independent auditors the matters required to be discussed by the
Statement On Auditing Standards No. 61, as may be modified or supplemented, and
(iii) received from the auditors disclosures regarding the auditors'
Independents Standards Board Standard No. 1, as may be modified or supplemented.
The board of directors of the Company, consistent with its intent to
enhance the reliability and credibility of its financial statements, has
submitted the financial statements
<PAGE> 19
included in this Form 10-QSB to its independent auditors prior to the filing of
this report. An audit was completed for the period then ended.
(c) Negotiation.
The Company has entered into negotiations to effectuate a business
combination with the shareholder(s) of Creative Technology & Interactive
Entertainment Group, Inc. Creative Technology & Interactive Entertainment Group,
Inc. is a holding company with an investment in a corporation that creates,
develops and markets, or intends to create, develop and market internet gaming
solutions, online e-commerce applications, data mining applications and other
online entertainment and game-related consumer products and services. The
Company intends, upon completion of further and additional due diligence, to
enter into either a letter of intent or a definitive agreement for the
acquisition of Creative Technology & Interactive Entertainment Group, Inc.;
provided that Creative Technology & Interactive Entertainment Group, Inc. can
supply such information for the Company to comply with the Securities Exchange
Act of 1934, as amended. The provisions of any letter of intent shall not be
considered a binding commitment to either the Company or the shareholder(s) of
Creative Technology & Interactive Entertainment Group, Inc. but will be an
indication of their desire to consummate the transaction upon the terms and
conditions contained therein. No enforceable obligations will exist against the
Company or the shareholder(s) of Creative Technology & Interactive Entertainment
Group, Inc. regarding the terms contained in the letter of intent until a
definitive agreement covering the proposed transaction has been executed by the
parties. The Company will file a Form 8-K at such time as either a letter of
intent or a definitive agreement has been executed, in accordance with law.
Item 6 - Exhibits and Reports on Form 8-K
The following exhibits are filed with this report:
(a) No reports on Form 8-K were filed during the quarter for
which the report is filed.
(b) Financial Data Schedule 27.1.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: October 24, 2000 MORNING SPLENDOR MANAGEMENT, INC.
By: /S/ Robert Gonzalez
---------------------------------
Robert Gonzalez
President
