UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRANTS OF SECURITIES OF SMALL
BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of
1934
MORGAN CLARK MANAGEMENT, INC.
(Name of Small Business Issuer in its charter)
Utah 87-0633496
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3158 Redhill Avenue, Suite 240, Costa Mesa, California 92626
(Address of principal executive officers) (Zip Code)
Issuer's telephone number:(949) 770-2578
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
N/A N/A
Securities to be registered under Section 12(g) of the Act:
Common Stock, par value $.001 per share
(Title of Class)
MORGAN CLARK MANAGEMENT, INC.
FORM 10-SB
TABLE OF CONTENTS PAGE
PART I
ITEM 1. Description of Business 3
ITEM 2. Management's Discussion and Analysis or
Plan of Operation 7
ITEM 3. Description of Property 16
ITEM 4. Security Ownership of Certain Beneficial
Owners and Management 16
ITEM 5. Directors, Executive Officers, Promoters
and Control Persons 16
ITEM 6. Executive Compensation 19
ITEM 7. Certain Relationships and Related Transaction 20
ITEM 8. Description of Securities 20
PART II
ITEM 1. Market Price of and Dividends on Registrant's
Common Equity and Other Shareholder Matters 21
ITEM 2. Legal Proceedings 24
ITEM 3. Changes in and Disagreements with Accountants 24
ITEM 4. Recent Sales of Unregistered Securities 24
ITEM 5. Indemnification of Directors and Officers 24
PART F/S
Financial Statements 25
PART III
ITEM 1. Index to Exhibits 32
ITEM 2. Description of Exhibits 32
Signatures 32
ITEM 1. DESCRIPTION OF BUSINESS
Background
MORGAN CLARK MANAGEMENT, INC. (the Company) is a Utah
corporation formed on June 3, 1999. Its principal place of
business is located at 3158 Redhill Avenue, Ste 240, Costa Mesa,
California 92626. The Company was organized to engage in any
lawful corporate business, including but not limited to,
participating in mergers with and acquisitions of other
companies and/or businesses. The Company has been a
developmental stage since inception and has no operating history
other than organizational matters.
The Company was incorporated by Mr. James Barber. He no longer
holds any position with the Company, and holds none of the
Company's outstanding common stock. The Company has never had
any operations. On June 3, 1999, founders shares of the
Company's common stock were issued to Vincent Van Den Brink, the
Company's sole officer and director. The shareholder has held
his stock since that time. The primary activity of the Company
currently involves seeking a business or businesses that it can
acquire or with whom it can merge.
The Company has not selected any specific business or entity as
an acquisition target or merger partner. The Company does not
intend to limit potential candidates to any particular field or
industry, but does retain the right to limit candidates, if it
so chooses, to a particular field or industry.
The Board of Directors has begun to implement the Company's
principal business plan, described below under Item 2.
Therefore, the Company can be defined as a "shell" or "blank
check" company whose sole purpose, at this time, is to locate
and consummate a merger or acquisition with a private entity or
business.
The Company's business plan classify it as a blank check
company. Many states have enacted statutes, rules, and
regulations limiting the sale of securities of blank check
companies in their respective jurisdictions. Management does
not intend to undertake any efforts to cause a market to develop
in the Company's securities until such time as the Company has
successfully implemented its business plan.
The Company is filing this registration statement on a voluntary
basis, pursuant to section 12(g) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), in order to ensure
that public information is readily accessible to all
shareholders and potential investors, and to increase the
Company's access to financial markets. The Company anticipates
that it will continue to file such reports, notwithstanding the
fact that it may not otherwise be required to file a
registration statement under Section 12(g) of the Exchange Act.
Risk Factors
The Company's business is subject to numerous risk factors
including, but not limited to, the following:
No Operating History or Revenues and Minimal Assets. The Company
has had no operating history and has received no revenues or
earnings from operations. The Company has no significant assets
or financial resources and, in all likelihood, will sustain
operating expenses without corresponding revenues at least until
it completes a business combination. This may result in the
Company incurring a net operating loss which will increase
continuously until the Company completes a business combination
with a profitable business opportunity. There is no assurance
that the Company will successfully identify a business
opportunity or complete a business combination.
Speculative Nature of Company's Proposed Operations. 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. Although
management intends to seek business combinations with entities
having established operating histories, it cannot be assured
that the Company will successfully locate candidates meeting
such criteria. In the event the Company completes a business
combination, the success of the Company's operations may be
dependent upon management of the successor firm or venture
partner firm together with numerous other factors beyond the
Company's control.
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 and
joint ventures with, and acquisitions of small private entities.
A large number of established and well-financed entities,
including venture capital firms, are active in mergers and
acquisitions of companies which may also be desirable target
candidates for the Company. Nearly all such entities have
significantly greater financial resources, technical expertise,
and managerial capabilities than the Company. The Company is,
consequently, at a competitive disadvantage in identifying
possible business opportunities and successfully completing a
business combination. Moreover, the Company will compete with
numerous other small public companies in seeking merger or
acquisition candidates.
No Agreement for Business Combination or Other Transaction - No
Standards for Business Combination. The Company has no
arrangement, agreement, or understanding with respect to
engaging in a business combination with any private entity.
There can be no assurance the Company will successfully identify
and evaluate suitable business opportunities or conclude a
business combination. Management has not identified any
particular industry or specific business within an industry for
evaluations. The Company has been in the developmental stage
since inception and has no operations to date. Other than
issuing shares to its original shareholder, the Company has not
commenced any operational activities. 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
history, losses, limited or no potential for earnings, limited
assets, negative net worth, or other negative characteristics.
Continued Management Control, Limited Time Availability. While
seeking a business combination, management anticipates devoting
from five to ten hours per month to the business of the Company
on an as-needed basis. The Company's sole officer and director
has not entered into a written employment agreement with the
Company and is not expected to do so in the foreseeable future.
The Company has not obtained key man life insurance on its sole
officer and director. Notwithstanding the combined limited
experience and time commitment of management, loss of the
services of any of this individual 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".
Conflicts of Interest - General. The Company's sole and director
participates in other business ventures which compete directly
with the Company. Additional conflicts of interest and non
arms-length transactions may also arise in the event the
Company's sole directors are involved in the management of any
firm with which the Company transacts business. The Company's
Board of Directors has adopted a resolution which prohibits the
Company from completing a combination with any entity in which
management may serve as officers, directors or partners, or in
which they or their family members own or hold any ownership
interest. Management is not aware of any circumstances under
which this policy could be changed while current management is
in control of the Company. See Item 5 - "Directors, Executive
Officers, Promoters and Control Persons".
Reporting Requirements May Delay or Preclude Acquisition.
Companies subject to Section 13 of the Exchange Act must provide
certain information about significant acquisitions including,
but not limited to, certified financial statements for the
company acquired covering up to two years. The time and
additional costs that may be incurred by some target entities to
prepare such statements may significantly delay or even preclude
the Company from completing an otherwise desirable acquisition.
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.
Lack of Market Research or Marketing Organization. The Company
has not conducted or received results of market research
indicating that a market demand exists for the transactions
contemplated by the Company. Moreover, the Company does not
have nor does it plan to establish a marketing organization. If
there is demand for a business combination as contemplated by
the Company, there is no assurance the Company will successfully
complete such transaction.
Lack of Diversification. In all likelihood, the Company's
proposed operations, even if successful, will result in a
business combination with only one entity. Consequently, the
resulting activities will be limited to that entity's business.
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, thereby increasing the
risks associated with the Company's operations.
Government Regulations. Although the Company will be subject to
regulation under the Exchange Act, management believes the
Company will not be subject to regulation under the Investment
Company Act of 1940(the "Investment Company Act"), 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 become subject to regulation under the Investment
Company Act. 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 (the "Commission") as to the status of the
Company under the Investment Company Act and, consequently, any
violation of such Act would subject the Company to material
adverse consequences.
Probable Change in Control And Management. A business
combination involving the issuance of the Company's common stock
will, in all likelihood, result in owners of a private business
or entity 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
stock 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 current officers and
directors of the Company and a corresponding reduction in or
elimination of their participation in the future affairs of the
Company.
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 such private business or entity. Issuing
previously authorized and unissued common stock of the Company
will reduce the percentage of shares owned by present and
prospective shareholders, and a change in the Company's control
and/or management.
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 target
company may attempt to avoid what it deems to be adverse
consequences of undertaking its own public offering by seeking a
business combination with the Company. The perceived adverse
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 securities laws enacted for the protection of
investors. These securities laws primarily relate to
registering securities and full disclosure of the Company's
business, management, and financial statements.
Taxation. Federal and state tax consequences will, in all
likelihood, be major considerations in any business combination
the Company may undertake. Typically, these transactions may be
structured 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. Management cannot assure that a
business combination will meet the statutory requirements for 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.
Requirement of Audited Financial Statements May Disqualify
Business Opportunities. Management believes that any potential
target must provide audited financial statements for review, and
for the protection of all parties to the business combination.
One or more attractive business opportunities may forego a
business combination with the Company, rather than incur the
expenses associated with preparing audited financial statements.
Blue Sky Considerations. Because the securities registered
hereunder have not been registered for resale under the blue sky
laws of any state and the Company has no current plans to
register or qualify its shares in any state, holders of these
shares and persons who desire to purchase them in any trading
market that might develop in the future, should be aware that
there may be significant state blue sky restrictions upon the
ability of new investors to purchase the securities. Some
states may restrict the trading or resale of blind-pool or
blank-check securities. Accordingly, investors should consider
any potential secondary market for the Company's securities to
be a limited one.
ITEM 2.MANAGEMENTS DISCUSSION AND ANALYSIS OF PLAN OF OPERATION
The following information should be read in conjunction with the
consolidated financial statements and notes thereto appearing
elsewhere in the Form 10-SB.
The Company is considered a development stage company with
minimal or no assets or capital and with no operations or income
since its inception. The costs and expenses associated with the
preparation and filing of this registration statement have been
paid for by an advance from a shareholder of the Company. It is
anticipated that the Company will require only nominal capital
to maintain the corporate viability of the Company and necessary
funds will most likely be provided by the Company's officers and
directors in the immediate future. However, unless the Company
is able to facilitate an acquisition of or merger with an
operating business or is able to obtain significant outside
financing, there is substantial doubt about its ability to
continue as a going concern.
Risk Factors and Cautionary Statements
This Registration Statement contains certain forward-looking
statements. The Company wishes to advise readers that actual
results may differ substantially from such forward-looking
statements. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ
materially from those expressed in or implied by the statements,
including, but not limited to, the following: the ability of the
Company search for appropriate business opportunities and
subsequently acquire or merge with such entity, to meet its cash
and working capital needs, the ability of the Company to
maintain its existence as a viable entity, and other risks
detailed in the Company's periodic report filings with the
Commission.
Plan of Operation
The Company's plan is to seek, investigate, and if such
investigation warrants, acquire an interest in one or more
business opportunities. At this time, the Company has no plan,
proposal, agreement, understanding, or arrangement to acquire or
merge with any specific business or entity, and the Company has
not identified any specific business or entity for investigation
and evaluation. No member of management or any promoter of the
Company, or an affiliate of either, has had any material
discussions with any other business or entity with respect to
any acquisition of that business or entity. The Company will
not restrict its search to any specific business, industry, or
geographical location, and may participate in business ventures
of virtually any kind or nature. Discussion of the proposed
business under this caption and throughout this Registration
Statement 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.
The Company's potential success is heavily dependant on the
Company's management, which will have virtually unlimited
discretion in searching for and entering into a business
combination. The Company's sole officer and director has not
had any experience in the proposed business of the Company.
Management anticipates that it will only participate in one
potential business venture. This lack of diversification
should be considered a substantial risk in investing in 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 combination with a business that
(i) only recently commenced operations; (ii) is a developing
company in need of additional funds to expand into new products
or markets; (iii) is seeking to develop a new product or
service; or (iv) is an established business which may be
experiencing financial or operating difficulties and needs
additional capital. In some instances, a business combination
may involve acquiring or merging with a corporation which does
not need substantial additional cash but which desires to
establish a public trading market for its common stock. The
Company may purchase assets and establish wholly-owned
subsidiaries in various businesses or purchase existing
businesses as subsidiaries.
The Company anticipates that the selection of a business
opportunity in which to participate will be complex and
extremely risky. Because of 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 a publicly-traded
corporation. Such perceived benefits of a publicly traded
corporation may include (i) facilitating or improving the terms
on which additional equity financing may be sought; (ii)
providing liquidity for the principals of a business; (iii)
creating a means for providing incentive stock options or
similar benefits to key employees; and (iv) providing liquidity,
subject to restrictions of applicable statues, for all
shareholders. Potentially available business 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.
Management believes that the Company may be able to benefit from
the use of leverage to acquire a target company. Leveraging a
transaction involves acquiring a business while incurring
significant indebtedness for a large percentage of the purchase
price of that business. Through leveraged transactions, the
Company would be required to use less of its available funds, if
any funds are available, to acquire a target company.
Therefore, the Company could commit those funds to the
operations of the business, to combinations with other target
companies, or to other activities. The borrowing involved in a
leveraged transaction will ordinarily be secured by the assets
of the acquired business. If that business is not able to
generate sufficient revenues to make payments on the debt
incurred by the Company to acquire that business, the lender
would be able to exercise the remedies provided by law or by
contract. These leveraging techniques, while reducing the
amount of funds that the Company must commit to acquire a
business, may correspondingly increase the risk of loss to the
Company. No assurance can be given as to the terms or
availability of financing for any acquisition by the Company.
During periods when interest rates are relatively high, benefits
of leveraging are not as great as during periods of lower
interest rates. This is because the investment in the business
held on a leveraged basis will only be profitable if it
generates sufficient revenues to cover the related debt and
other costs of the financing.
Lenders from which the Company may obtain funds for purposes of
a leveraged buy-out may impose restrictions on the future
borrowing, distribution, and operating policies of the Company.
It is not possible at this time to predict the restrictions, if
any, which lenders may impose, or the impact thereof on the
Company.
As part of any transactions, the acquired entity may require the
Company's management or other shareholders of the Company to
sell all or a portion of their shares to the acquired entity or
the principles thereof. It is anticipated that the sales price
of such shares will be lower than the current market price or
anticipated market price of the Company's Common Stock. The
Company's funds are not expected to be used for any stock
purchase from insiders. The Company shareholders will not be
provided the opportunity to approve or consent to such sale.
The opportunity to sell all or a portion of their shares in
connection with an acquisition may influence management's
decision to enter into a specific transaction. However,
management believes that since the anticipated sales price will
be less than the market value, the potential of a stock sale by
management will be a material factor in their decision to enter
a specific transaction.
The above description of potential sales of management stock is
not based upon any corporate bylaw, shareholder or board
resolution, or contract or agreement. No other payment of cash
or property ix expected to be received by management in
connection with any acquisition.
The Company has insufficient capital with which to provide the
owners of businesses significant cash or other assets.
Management believes the Company will offer owners of businesses
the opportunity to acquire a controlling ownership interest in
the Company at substantially less cost than is required to
conduct an initial public offering. The owners of the
businesses will, however, incur significant post-merger or
acquisition registration costs in the event they wish to
register a portion of their shares for subsequent sale. The
Company will also incur significant legal and accounting costs
in connection with the acquisition of a business opportunity,
including the costs of preparing post-effective amendments,
Forms 8-K, agreements, and related reports and documents.
Nevertheless, the officers and directors of the Company have not
conducted market research and are not aware of statistical data
which would support the perceived benefits of a merger or
acquisition transaction for the owners of a business. The
Company does not intend to make any loans to any prospective
merger or acquisition candidates or to unaffiliated third
parties.
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 perceived 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.
Sources of Opportunities
The Company anticipates that business for possible acquisition
will be referred by various sources, including its officers and
directors, professional advisors, securities broker-dealers,
venture capitalists, members of the financial community, and
others who may present unsolicited proposals.
The Company will seek a potential business opportunity from all
known sources, but will rely principally on personal contacts of
its officers and directors as well as indirect associations
between them and other business and professional people. It is
not presently anticipated that the Company will engage
professional firms specializing in business acquisitions or
reorganizations.
The officers and directors of the Company are currently employed
in other positions and, until such time as an acquisition has
been determined to be highly favorable, will devote only a
portion of their time to the business affairs of the Company.
If a business opportunity is considered promising, management
will spend additional time, on an as-needed basis, to consummate
an acquisition. In addition, in the face of competing demands
for their time, the officers and directors may grant priority to
their full-time position rather than to the Company.
Management, while not particularly experienced in matters
relating to the new business of the Company, will rely upon
their own efforts and, to a much lesser extent, the efforts of
the Company's shareholders, in accomplishing the business
purposes of the Company.
It is not anticipated that any outside consultants or advisors,
other than the Company's legal counsel and accountants, will be
used 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 earned by such party
will need to be paid by the prospective merger/acquisition
candidate, as the Company presently has no cash assets with
which to pay such obligation. There have been no discussions,
understandings, contracts or agreements with any outside
consultants and none are anticipated in the future. In the
past, the Company's management has never used outside
consultants or advisors in connection with a merger or
acquisition.
As is customary in the industry, the Company may pay a finders
fee for locating an acquisition prospect. If any such fee is
paid, it will be approved by the Company's Board of Directors
and will be in accordance with the industry standards. Such
fees are customarily between 1% and 5% of the size of the
transaction, based upon a sliding scale of the amount involved.
Management has adopted a policy that such a finders fee or real
estate brokerage fee could, in certain circumstances, be paid to
any employee, officer, director or 5% shareholder of the
Company, if such person plays a material role in bringing a
transaction to the Company. Any such prospective fee will be
negotiated in connection with any potential acquisition or
merger. It is not possible at this time to estimate the terms
of any such arrangement.
Most likely the Company will not have sufficient funds to
undertake any significant development, marketing, and
manufacturing of any products which may be acquired.
Accordingly, if it acquires the rights to a product, rather than
entering into a merger or acquisition, it most likely would need
to seek debt or equity financing or obtain funding from third
parties, in exchange for which the Company would probably be
required to give up a substantial portion of its interest in any
acquired product. There is no assurance that the Company will
be able either to obtain additional financing or to interest
third parties in providing funding for the further development,
marketing and manufacturing of any products acquired.
Evaluation of Opportunities
The analysis of new business opportunities will be undertaken by
or under the supervision of the Board of Directors (see Item 5 -
"Directors, Executive Officers, Promoters and Control Persons").
Management intends to concentrate on identifying prospective
business opportunities which may be brought to its attention
through their present associations and business contacts. In
analyzing prospective business opportunities, management will
consider, among other factors, such matters as:
1. Available technical, financial and managerial resources.
2. Working capital and other financial requirements.
3. History of operation, if any.
4. Prospects for the future.
5. Present and expected competition.
6. Quality and experience of management services which may be
available and the depth of that management.
7. Potential for further research, development or exploration.
8. Specific risk factors not now foreseeable, but which may be
anticipated to impact the proposed activities of the Company.
9. Potential for growth or expansion.
10. Potential for profit.
11. Perceived public recognition or acceptance of products, services
or trades.
12. Name identification.
The Company's management will meet personally with
management and key personnel of the firm sponsoring the business
opportunity as part of their investigation. To the extent
possible, the Company intends to use written reports and
personal investigation to evaluate the above factors. The
Company will not acquire or merge with any business or entity
for which audited financial statements cannot be obtained.
It is likely that any opportunity in which the Company
participates will present certain risks. Many of these risks
cannot be adequately identified prior to selection of the
specific opportunity, and the Company's shareholders must,
therefore, depend on the ability of management to identify and
evaluate such risk. In the case of some of the opportunities
available to the company, it may be anticipated that the
promoters thereof have been unable to develop a going concern or
that such business is in its development state in that it has
not generated significant revenues from its principal business
activities prior to the Company's participation.
There is a risk as to whether, even after the Company
becomes involved in an opportunity, the combined enterprises
will be able to become a going concern or advance beyond the
development stage. Many of the potential opportunities may
involve new and untested product, processes, or market
strategies which may not succeed. Such risks will be assumed by
the Company and, therefore, its shareholders.
The Company will not restrict its search for any specific
kind of business, 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
currently impossible to predict the status of any business in
which the Company may become engaged, in that such business may
need additional capital, may merely desire to have its shares
publicly traded, or may seek other perceived advantages which
the Company may offer.
It is anticipated that the investigation of specific business
opportunities and the negotiation, drafting and execution of
relevant agreements, disclosure documents and other instruments
will require substantial management time and attention and
substantial costs for accountants, attorneys and others. If a
decision is made not to participate in a specific business opportunity
the cost therefore incurred in the related investigation would, most
likely, not be recoverable. Furthermore, even if an agreement is reached
for the participation in a specific business opportunity, the failure to
consummate that transaction may result in the loss of the
Company of the related costs incurred. Opportunities in which
the Company participates will present certain risks, many of which cannot
be identified adequately prior to selecting a specific opportunity.
The Company's shareholders must, therefore, depend on
management to identify and evaluate such risks. Promoters of
some opportunities may have been unable to develop a going
concern or may present a business in its development stage, one
that has not generated significant revenues from its principal
business activities prior to the Company's participation. Even
after the Company's participation, there is a risk that the
combined enterprise may not become a going concern or advance
beyond the development stage. Other opportunities may involve
new and untested products, processes, or market strategies which
may not succeed. Such risks will be assumed by the Company and,
therefore, its shareholders.
There is the additional risk that the Company may not find
a suitable target. Management does not believe the Company will
generate revenue without finding and completing a transaction
with a suitable target company. If no such target is found,
therefore, no return on an investment in the Company will be
realized, and there will not, most likely, be a market for the
Company's stock.
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, franchise, or
licensing agreement with the business or entity. It may also
purchase stock or assets of an existing business. Once a
transaction is complete, it is possible that present management
and shareholders of the Company will not be in control of the
Company. In addition, a majority or all of the Company's
officers and directors may, as part of the terms of the
transaction, resign and be replaced by new officers and
directors without a vote of the Company's shareholders.
It is anticipated that securities issued in any such
reorganization would be issued in reliance on exemptions from
registration under applicable Federal and state securities laws.
In some circumstances, however, as a negotiated element of this
transaction, the Company may agree to register such securities
either at the time the transaction is consummated, under certain
conditions, or at specified time thereafter. The issuance of
substantial additional securities and their potential sale into
any trading market which may develop in the Company's Common
Stock may have a depressive effect on such market.
Although the actual terms of a future transaction cannot be
predicted, it may be expected that the parties to the
transaction will find it desirable to avoid the creation of a
taxable event and, thereby, structure the transaction as a so
called tax free reorganization under Sections 368(a)(1) or 351
of the Internal Revenue Code of 1986, as amended (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, including investors in this
offering, would retain less than 20% of the issued and
outstanding shares of the surviving entity, which could 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 or verification of certain
information provided, check references of management and key
personnel, and 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 with a target
opportunity will depend on (i) the nature of the opportunity;
(ii) the respective needs and desires of the Company and other
parties; (iii) management of the opportunity; and (iv) the
relative negotiating strength of management of the two entities.
With respect to any merger or acquisition, negotiations
with target company management will be expected to focus on the
percentage of the Company which the target company's
shareholders would acquire in exchange for 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 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, including purchasers in this
offering.
Management has advanced, and will continue to advance,
funds which shall be used by the Company in identifying and
pursuing agreements with target companies. Management
anticipates that these funds will be repaid from the proceeds of
any agreement with the target company, and that any such
agreement may, in fact, be contingent upon the repayment of
those funds.
Rights of Shareholders
It is presently anticipated by management that prior to
consummating a possible acquisition or merger, the Company, if
required by relevant state laws and regulations, will seek to
have the transaction ratified by shareholders in the appropriate
manner. However, under Utah law, certain actions that would
routinely be taken at a meeting of shareholders, may be taken by
written consent of shareholders having not less than the minimum
number of votes that would be necessary to authorize or take the
action at a meeting of shareholders. Thus, if shareholders
holding a majority of the Company's outstanding shares decide by
written consent to consummate an acquisition or a merger,
minority shareholders would not be given the opportunity to vote
on the issue. The Board of Directors will have the discretion
to consummate an acquisition or merger by written consent if it
is determined to be in the best interest of the Company to do
so. Regardless of whether an action to acquire or merge is
ratified by written consent or by holding a shareholders'
meeting, the Company will provide to its shareholders complete
disclosure documentation concerning a potential target business
opportunity including the appropriate audited financial
statements of the target. This information will be disseminated
by proxy statement in the event a shareholders' meeting is held,
or by subsequent report to the shareholders if the action is
taken by written consent.
Competition
The Company is an insignificant participant among firms
which engage in business combinations with, or financing of
development-stage enterprises. There are many established
management and financial consulting companies and venture
capital firms which have significantly greater financial and
personal resources, technical expertise and experience than the
Company. In view of the Company's limited financial resources
and management availability, the Company will continue to be at
a significant competitive disadvantage with its competitors.
Inflation
In the opinion of management, inflation has not and will
not have a material effect on the operations of the Company
until such time as the Company successfully completes an
acquisition or merger. At that time, management will evaluate
the possible effects of inflation on the Company related to it
business and operations following a successful acquisition or
merger.
Year 2000
Year 2000 issues may arise if computer programs have been
written using two digits (rather than four) to define the
applicable year. In such case, programs that have time-
sensitive logic may recognize a date using "00" as the year 1900
rather than the year 2000, which could result in miscalculations
or system failures.
Because the Company currently does not have any operations
except for its search for viable business opportunities, it does
not own or use any computer equipment. The Company does not
anticipate doing a full assessment of the potential Year 2000
issue until it has made an acquisition of or merged with an
operating entity. The Company does not believe that the cost of
addressing the issue will have a material adverse impact on its
financial position. Further, the Company believes that no third
parties with whom it may have a material relationships will be
materially affected by the Year 2000 issues.
Regulation and Taxation
The Investment Company Act defines an investment company as
an issuer which is or holds itself out as being engaged
primarily in the business of investing, reinvesting or trading
securities. Although the Company does not intend to engage in
such activities, the Company may, through business combinations,
obtain and hold a minority interest in a number of development
stage enterprises.
The Company could be expected to incur significant
registration and compliance costs if required to register under
the Investment Company Act. Accordingly, management will
continue to review the Company's activities from time to time
with a view toward reducing the likelihood the Company could be
classified as an investment company.
The Company intends to structure any future merger or
acquisition in such manner as to minimize Federal and state tax
consequences to the Company and to any target company.
Employees
The Company's only employee at the present time is its sole
officer and director, who will devote as much time as the Board
of Directors determine is necessary to carry out the affairs of
the Company.
Recent Accounting Pronouncements
The Financial Accounting Standards Board ("FASB") has
issued Statement of Financial Accounting Standard ("SFAS") No.
128, "Earnings Per Share" and Statement of Financial Accounting
Standards No. 129 "Disclosures of Information About an Entity's
Capital Structure." SFAS No. 128 provides a different method of
calculating earnings per share than is currently used in
accordance with Accounting Principles Board Opinion No. 15,
"Earnings Per Share." SFAS No. 128 provides for the calculation
of "Basic" and "Dilutive" earnings per share. Basic earnings
per share includes no dilution and is computed by dividing
income available to common shareholders by the weighted average
number of common shares outstanding for the period. Diluted
earnings per share reflects the potential dilution of securities
that could share in the earnings of an entity, similar to fully
diluted earnings per share. SFAS No. 129 establishes standards
for disclosing information about an entity's capital structure.
SFAS No. 128 and SFAS No. 129 are effective for financial
statements issued for periods ending after December 15, 1997.
Their implementation is not expected to have a material effect
on the financial statements.
The FASB has also issued SFAS No. 130, "Reporting
Comprehensive Income" and SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information." SFAS No. 130
establishes standards for reporting and display of comprehensive
income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those
resulting from investments by owners and distributions to
owners. Among other disclosures, SFAS No. 130 requires that all
items that are required to be recognized under current
accounting standards as components of comprehensive income be
reported in a financial statement that displays with the same
prominence as other financial statements. SFAS No. 131
supersedes SFAS No. 14 "Financial Reporting for Segments of a
Business Enterprise." SFAS No. 131 establishes standards on the
way that public companies report financial information about
operating segments in annual financial statements and requires
reporting of selected information about operating segments in
interim financial statements issued to the public. It also
establishes standards for disclosure regarding products and
services, geographic areas and major customers. SFAS No. 131
defines operating segments as components of a company about
which separate financial information is available that is
evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance.
SFAS 130 and 131 are effective for financial statements for
periods beginning after December 15, 1997 and requires
comparative information for earlier years to be restated.
Management believes the adoption of this statement will have no
material impact on the Company's financial statements.
The FASB has also issued SFAS No 132. "Employers'
Disclosures about Pensions and other Postretirement Benefits,"
which standardizes the disclosure requirements for pensions and
other Postretirement benefits and requires additional
information on changes in the benefit obligations and fair
values of plan assets that will facilitate financial analysis.
SFAS No. 132 is effective for years beginning after December 15,
1997 and requires comparative information for earlier years to
be restated, unless such information is not readily available.
Management believes the adoption of this statement will have no
material impact on the Company's financial statements.
In June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities" which requires
companies to record derivatives as assets or liabilities,
measured at fair market value. Gains or losses resulting from
changes in the values of those derivatives would be accounted
for depending on the use of the derivative and whether it
qualifies for hedge accounting. The key criterion for hedge
accounting is that the hedging relationship must be highly
effective in achieving offsetting changes in fair value or cash
flows. SFAS No. 133 is effective for all fiscal quarters of
fiscal years beginning after June 15, 1999. Management believes
the adoption of this statement will have no material impact on
the Company's financial statements.
ITEM 3. DESCRIPTION OF PROPERTY.
The Company at present has no interest in any real
property. The Company neither owns nor leases any real
property. Office services are provided without charge by a
director. Such costs are immaterial to the financial
statements, and accordingly, have not been reflected therein.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth each person known to the
Company, as of June 6, 1999, to be a beneficial owner of five
percent (5%) or more of the Company's common stock, by the
Company's directors individually, and by all of the Company's
directors and executive officers as a group. Except as noted,
each person has sole voting and investment power with respect to
the shares shown. Presently, the only such beneficial holder is
also an executive officer and director. Therefore, only one
table is included.
Title of Name/Address Shares Percentage
Class of Owner Owned Beneficially
Owned
Common Vincent van den Brink 1,000,000 100%
3158 Redhill Ave.
Ste. 240
Costa Mesa, CA 92626
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS.
Members of the Company's Board of Directors of the Company
serve until the next annual meeting of the shareholders, or
until their successors have been elected. Executive officers
serve at the pleasure of the Board of Directors.
There are no agreements for any officer or director to
resign at the request of any other person, and none of the
officers or directors named below are acting on behalf of, or at
the direction of, any other person.
The Company's sole officer and director will devote time to
the business on an as-needed basis, which is expected to require
five to ten hours per month.
Information as to the sole director and executive officer
of the Company is as follows:
Name/Address Age Position
Vincent van den Brink 58 President/Secretary/Director
3158 Redhill Ave., Ste. 240
Costa Mesa, CA 92626
Vincent van den Brink has been President, Secretary and
Director of the Issuer since June 3, 1999. Since October 1997
to present, he has been a Financial Consultant with Airway
Capital, Costa Mesa, California, providing asset based lending,
factoring, equipment leasing, and export financing for various
businesses. From June 1985 until May 1997, he was a Business
Consultant writing business plans and business development plans
for companies across the country. Since 1978 to present, in
addition to working for the above companies, he has been
operating an export business providing export consulting, export
products and sourcing products for international clients. He
holds a Bachelor's degrees in automotive engineering from the
Auto Technische School in Apeldoorn, Netherlands. He is fluent
in English, Dutch, German and Afrikaans.
Blank Check Experience
Mr. van den Brink is President, Director, and sole
shareholder of Theinternetcorp.net, Inc., a Nevada blank check
company, formed in May, 1999 and which has filed a Registration
Statement with the Commission on Form 10-SB. Mr. van den Brink
is President, Director, and sole shareholder of Glennaire
Financial Services, Inc., a Utah blank check company, formed in
March, 1999 and which has filed a Registration Statement with
the Commission on Form 10-SB.It is possible that Mr. van den
Brink may establish additional blind pool or blank check
companies in the future. See "Conflicts of Interest."
Conflicts of Interest
Insofar as the sole officer and director is engaged in
other business activities, management anticipates it will devote
only a minor amount of time to the Company's affairs. The sole
officer and director of the Company may in the future become a
shareholder, officer or director of other companies which may be
formed for the purpose of engaging in business activities
similar to those conducted by the Company. 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.
Directors and executive officers of the Company will be
subject to the doctrine of corporate opportunities only insofar
as it applies to business opportunities in which the Company has
indicated an interest, either through its proposed business plan
or by way of an express statement of interest contained in the
Company's minutes. Any opportunity contemplated by the Company
which may come to the attention of an officer or director,
either in the performance of their duties or in any other
manner, will be considered opportunities of, and be made
available to the Company. A breach of this requirement will be
a breach of the fiduciary duties of the officer or director. If
a director is presented with business opportunities that may
conflict with business interests identified by the Company, such
opportunities must be promptly disclosed to the Board of
Directors and made available to the Company. In the event the
Board shall reject an opportunity so presented and only in that
event, any of the Company's officers and directors may avail
themselves of such an opportunity. Every effort will be made to
resolve any conflicts that may arise in favor of the Company.
There can be no assurance, however, that these efforts will be
successful.
Subject to the next paragraph, if a situation arises in
which more than one company desires to merge with or acquire a
target opportunity, and the principals of the proposed target
have no preference as to which company will merge or acquire
such target, the company of which the President first became an
officer and director will be entitled to proceed with the
transaction. Except as set forth above, the Company has not
adopted any other conflict of interest policy with respect to
such transactions.
Investment Company Act of 1940
Although the Company will be subject to regulation under
the Securities Act of 1933, as amended ("Securities Act"), and
the Exchange 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. 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 Commission as to the
status of the Company under the Investment Company Act and,
consequently, any violation of such Act would subject the
Company to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION.
The Company's sole director does not receive any
compensation for his services rendered to the Company, nor has
he received such compensation in the past. He has 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 consummating a merger or
acquisition. As of the date of this registration statement, the
Company has no funds available to pay directors. Further, the
sole director is not 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 more 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.
Management has agreed to disclose to the Company's Board of
Directors any discussions concerning possible compensation to be
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 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
finders 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 finder's fee, either
directly or indirectly, as a result of their respective efforts
to implement the Company's business plan outlined herein.
Persons associated with management is meant to refer to persons
with whom management may have had other business dealings, but
who are not affiliated with or relatives of management.
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
The Board of Directors has passed a resolution which
contains a policy that the Company will not seek an acquisition
or merger with any entity in which any of the Company's
Officers, Directors, principal shareholders or their affiliates
or associates serve as officer or director or hold any ownership
interest. Management is not aware of any circumstances under
which this policy may be changed through their own initiative.
The proposed business activities described herein classify
the Company as a blank check company. Many states have enacted
statutes, rules and regulations limiting the sale of securities
of blank check companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as
the Company has successfully implemented its business plan
described herein.
ITEM 8. DESCRIPTION OF SECURITIES.
Common Stock
The Company's Articles of Incorporation authorized the
issuance of 140,000,000 shares consisting of 100,000,000 shares
of common stock, $0.001 par value, and 40,000,000 shares of
preferred stock, $0.001 par value, of which 1,000,000 shares of
common stock were issued and are now outstanding. All shares
are non-assessable, without pre-emptive rights, and do not carry
cumulative voting rights. Holders of common shares are entitled
to one vote for each share on all matters to be voted on by
shareholders. Also, common shareholders are entitled to share
ratably in dividends, if any, as may be declared by the Company
from time-to-time, from funds legally available. In the event
of a liquidation, dissolution, or winding up of the Company, the
holders of shares of common stock are entitled to share on a
pro-rata basis all assets remaining after payment in full of all
liabilities.
Management is not aware of any circumstances in which
additional shares of any class or series of the Company's stock
would be issued to management or promoters, or affiliates or
associates of either.
Preferred Stock
The Company's Articles of Incorporation authorizes the
issuance of 40,000,000 shares of preferred stock, $0.001 par
value, none of which have been issued. The Company currently has
no plans to issue any preferred stock. The Company's Board of
Directors has the authority, without action by the shareholders,
to issue all or any portion of the authorized but unissued
preferred stock in one or more series and to determine the
voting rights, preferences as to dividends and liquidation,
conversion rights, and other rights of such series. The
preferred stock, if and when issued, may carry rights superior
to those of common stock; however no preferred stock may be
issued with rights equal or senior to the preferred stock
without the consent of a majority of the holders of then-
outstanding preferred stock.
The Company considers it desirable to have preferred stock
available to provide increased flexibility in structuring
possible future acquisitions and financings, and in meeting
corporate needs which may arise. If opportunities arise that
would make the issuance of preferred stock desirable, either
through public offering or private placements, the provisions
for preferred stock in the Company's Certificate of
Incorporation would avoid the possible delay and expense of a
shareholders meeting, except as may be required by law or
regulatory authorities. Issuance of the preferred stock could
result, however, in a series of securities outstanding that will
have certain preferences with respect to dividends and
liquidation over the common stock. This could result in
dilution of the income per share and net book value of the
common stock.
Issuance of additional common stock pursuant to any
conversion right which may be attached to the terms of any
series of preferred stock may also result in dilution of the net
income per share and the net book value of the common stock.
The specific terms of any series of preferred stock will depend
primarily on market conditions, terms of a proposed acquisition
or financing, and other factor existing at the time of issuance.
Therefore it is not possible at this time to determine in what
respect a particular series of preferred stock will be superior
to the Company's common stock or any other series of preferred
stock which the Company may issue. The Board of Directors does
not have any specific plan for the issuance of preferred stock
at the present time, and does not intend to issue any preferred
stock at any time except on terms which it deems to be in the
best interest of the Company and its shareholders.
The issuance of preferred stock could have the effect of
making it more difficult for a third party to acquire a majority
of the outstanding voting stock of the Company. Further, certain
provisions of Utah law could delay or make more difficult a
merger, tender offer, or proxy contest involving the Company.
Although such provisions are intended to enable the Board of
Directors to maximize shareholder value, they may have the
effect of discouraging takeovers which could be in the best
interests of certain shareholders. There is no assurance that
such provisions will not have an adverse effect on the market
value of the Company's stock in the future.
PART II
ITEM 1. MARKET PRICE AND DIVIDENDS ON THE REGISTRANT'S COMMON
EQUITY AND RELATED SHAREHOLDER MATTERS.
The Company's common stock is not quoted on the over-the-
counter market or on any other recognized market or exchange.
Management has not undertaken any discussions, preliminary or
otherwise, with any prospective market maker concerning the
participation of such market maker in the after-market for the
Company's securities and management does not intend to initiate
any such discussions until such time as the Company has
consummated a merger or acquisition. There is no assurance that
a trading market will ever develop or, if such a market does
develop, that it will continue.
After a business combination, merger or acquisition has
been completed, the Company's sole director will most likely be
the person to contact prospective market makers. It is also
possible that persons associated with the entity that merges
with or is acquired by the Company will contact prospective
market makers. The Company does not intend to use consultants
to contact market makers.
Market Price
The ability of an individual shareholder to trade their
shares in a particular state may be subject to various rules and
regulations of that state. A number of states require that an
issuer's securities be registered in their state or
appropriately exempted from registration before the securities
are permitted to trade in that state. Presently, the Company
has no plans to register its securities in any particular state.
Although there is presently no market for the Company's
shares of common stock, if a marked does develop it is likely
that the shares will be subject to the provisions of Section
15(g) and Rule 15g-9 of the Exchange Act, commonly referred to
as the "penny stock" rule. Section 15(g) sets forth certain
requirements for transactions in penny stocks and
Rule 15g-9(d)(1) incorporates the definition of penny stock as
that used in Rule 3a51-1 of the Exchange Act.
The Commission generally defines penny stock to be any
equity security that has a market price less than $5.00 per
share, subject to certain exceptions. Rule 3a51-1 provides that
any equity security is considered to be a penny stock unless
that security is: registered and traded on a national
securities exchange meeting specified criteria set by the
Commission; authorized for quotation on The NASDAQ Stock Market;
issued by a registered investment company; excluded from the
definition on the basis of price (at least $5.00 per share) or
the issuer's net tangible assets; or exempted from the
definition by the Commission. If the Company's shares are
deemed to be a penny stock, trading in the shares will be
subject to additional sales practice requirements on broker-
dealers who sell penny stocks to persons other than established
customers and accredited investors, generally persons with
assets in excess of $1,000,000 or annual income exceeding
$200,000, or $300,000 together with their spouse.
For transactions covered by these rules, broker-dealers
must make a special suitability determination for the purchase
of such securities and must have received the purchaser's
written consent to the transaction prior to the purchase.
Additionally, for any transaction involving a penny stock,
unless exempt, the rules require the delivery, prior to the
first transaction, of a risk disclosure document relating to the
penny stock market. A broker-dealer also must disclose the
commissions payable to both the broker-dealer and the registered
representative, and current quotations for the securities.
Finally, monthly statements must be sent disclosing recent price
information for the penny stocks held in the account and
information on the limited market in penny stocks.
Consequently, these rules may restrict the ability of broker-
dealers to trade and/or maintain a market in the Company's
common stock and may affect the ability of shareholders to sell
their shares.
The National Association of Securities Dealers, Inc.
("NASD"), which administers The Nasdaq Stock Market, has
recently made changes in the criteria for initial listing on The
Nasdaq Small Cap Market and for continued listing. For initial
listing, a company must have net tangible assets of $4 million,
market capitalization of $50 million or net income of $750,000
in the most recently completed fiscal year or in two of the last
three fiscal years. For initial listing, the common stock must
also have a minimum bid price of $4.00 per share. In order to
continue to be included on The Nasdaq Stock Market, a company
must maintain $2,000,000 in net tangible assets and a $1,000,000
market value of its publicly-traded securities. In addition,
continued inclusion requires two market-makers and a minimum bid
price of $1.00 per share.
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 The Nasdaq Stock Market 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 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 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.
As of the date hereof, the Company has issued and
outstanding 1,000,000 shares of common stock, all of which are
deemed "restricted securities" as defined by the Securities Act.
These shares are held by one person, an officer and director of
the Company.
Presently, no outstanding shares are eligible for sale
pursuant to Rule 144. However, restricted shares that have been
beneficially owned for more than one year may be eligible for
sale under Rule 144, subject to the volume and other limitations
set forth by such Rule. In general, under Rule 144 as currently
in effect, a person (or persons whose shares are aggregated) who
has beneficially owned restricted shares of the Company for at
least one year, including any person who may be deemed to be an
"affiliate" of the Company (as the term "affiliate" is defined
under the Act), is entitled to sell, within any three-month
period, an amount of shares that does not exceed the greater of
(i) the average weekly trading volume in the Company's common
stock, as reported through the automated quotation system of a
registered securities association, during the four calendar
weeks preceding such sale or (ii) 1% of the shares then
outstanding. A person who is not deemed to be an "affiliate" of
the Company and has not been an affiliate for the most recent
three months, and who has held restricted shares for at least
two years would be entitled to sell such shares without regard
to the resale limitations of Rule 144.
Dividend Policy
The Company has not declared or paid cash dividends or made
distributions in the past, and the Company does not anticipate
that it will pay cash dividends or make distributions in the
foreseeable future. The Company currently intends to retain and
invest future earnings to finance its operations.
ITEM 2. LEGAL PROCEEDINGS.
The Company is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by
or against the Company has been threatened.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
This Item is not applicable to the Company.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
All shares of the Company's common stock presently
outstanding were issued to the founder of the Company on June 3,
1999. These shares were issued in a private transaction in
accordance with the exemption from registration afforded by
Section 4(2) of the Securities Act. No transfers of stock have
occurred since June 3, 1999. No advertising or general
solicitation was employed in offering the shares. The
securities were offered for investment only and not for the
purpose of resale or distribution, and the transfer thereof was
appropriately restricted.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by the provisions of the Utah Revised Business
Corporation Act (the "Utah Act"), the Company has the power to
indemnify an individual made a party to a proceeding because
they are or were a director, against liability incurred in the
proceeding, if such individual acted in good faith and in a
manner reasonably believed to be in, or not opposed to, the best
interest of the Company and, in a criminal proceeding, they had
no reasonable cause to believe their conduct was unlawful.
Indemnification under this provision is limited to reasonable
expenses incurred in connection with the proceeding. The
Company must indemnify a director or officer who is successful,
on the merits of otherwise, in the defense of any proceeding or
in defense of any claim, issue, or matter in the proceeding, to
which they are a party to because they are or were a director of
officer of the Company, against reasonable expenses incurred by
them in connection with the proceeding or claim with respect to
which they have been successful. Pursuant to the Utah Act, the
Company's Board of Directors may indemnify its officers,
directors, agents, or employees against any loss or damage
sustained when acting in good faith in the performance of their
corporate duties.
The Company may pay for or reimburse reasonable expenses
incurred by a director, officer employee, fiduciary or agent of
the Company who is a party to a proceeding in advance of final
disposition of the proceeding provided the individual furnishes
the Company with a written affirmation that their conduct was in
good faith and in a manner reasonably believed to be in, or not
opposed to, the best interest of the Company, and undertake to
repay the advance if it is ultimately determined that they did
not meet such standard of conduct.
Also pursuant to the Utah Act, a corporation may set forth
in its articles of incorporation, by-laws or by resolution, a
provision eliminating or limiting in certain circumstances,
liability of a director to the corporation or its shareholders
for monetary damages for any action taken or any failure to take
action as a director. This provision does not eliminate or
limit the liability of a director (i) for the amount of a
financial benefit received by a director to which they are not
entitled; (ii) an intentional infliction of harm on the
corporation or its shareholders; (iii) for liability for a
violation of Section 16-10a-842 of the Utah Act (relating to the
distributions made in violation of the Utah Act); and (iv) an
intentional violation of criminal law. To date, the Company has
not adopted such a provision in its Articles of Incorporation,
By-Laws, or by resolution. A corporation may not eliminate or
limit the liability of a director for any act or omission
occurring prior to the date when such provision becomes
effective. The Utah Act also permits a corporation to purchase
and maintain liability insurance on behalf of its directors,
officers, employees, fiduciaries or agents.
Transfer Agent
The Company is presently acting as its own transfer agent.
It is likely that following a business combination, merger or
acquisition, the Company will engage a transfer agent.
PART F/S
The Company's financial statements for the period from
inception on June 3, 1999 through June 30, 1999 have been
examined to the extent indicated in their reports by Jones,
Jensen & Company, independent certified public accountants, and
have been prepared in accordance with generally accepted
accounting principles and pursuant to Regulation S-B as
promulgated by the Commission and are included herein in
response to Item 15 of this Form 10-SB.
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Morgan Clark Management, Inc.
(A Development Stage Company)
Costa Mesa, California
We have audited the accompanying balance sheet of Morgan Clark
Management, Inc. (a development stage company) as of June 30,
1999 and the related statements of operations, stockholders'
equity (deficit) and cash flows for the period from inception on
June 3, 1999 through June 30, 1999. These financial statements
are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Morgan Clark Management, Inc. (a development stage company)
as of June 30, 1999 and the results of its operations and its
cash flows for the period from inception on June 3, 1999 through
June 30, 1999 in conformity with generally accepted accounting
principles.
The accounting financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed
in Note 2 to the financial statements, the Company is a
development stage company with no significant operating results
to date, which raises substantial doubt about its ability to
continue as a going concern. Management's plans in regard to
these matters are also described in Note 2. The financial
statements do not include any adjustments that might result from
the outcome of the uncertainty.
Jones, Jensen & Company
Salt Lake City, Utah
July 26, 1999
EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
MORGAN CLARK MANAGEMENT, INC.
The undersigned, a natural person at least eighteen years
old, does hereby act as incorporator in adopting the following
Articles of Incorporation for the purpose of organizing the
business corporation hereinafter named MORGAN CLARK MANAGEMENT,
INC., pursuant to the provisions of the Utah Revised Business
Corporation Act.
FIRST: The name of the corporation is MORGAN CLARK MANAGEMENT, INC.
(the "Corporation").
SECOND: The principal office of the Corporation in the
State of Utah is located at 935 E. 7220 South, Ste. D-103,
Midvale, Utah 84047. The name and address of the registered
agent of the Corporation is Mr. James Barber, 935 E. 7220 South,
Ste. D-103, Midvale, Utah 84047. The registered office of the
Corporation is 935 E. 7220 South, Ste. D-103, Midvale, Utah
84047. The name and address of the first Director and
Incorporator is Mr. James Barber, 935 E. 7220 South, Ste. D-103,
Midvale, Utah 84047. The signature of the said registered agent
is set forth in the last Article of these Articles of
Incorporation.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which a corporation may be organized
under the Utah Revised Business Corporation Act and the duration
of the Corporation shall be perpetual.
FOURTH: The following provisions are inserted for the
management of the business and the conduct of the affairs of the
Corporation, and for further definition, limitation and
regulation of the powers of the Corporation and of its directors
and stockholders:
A. The governing board of this Corporation shall be
known as the board of directors (the "Board of Directors" or the
"Board") and its members all be known as directors, and the
number of directors may from time to time be increased or
decreased by resolution of the Board of Directors, provided that
the number of directors shall not be reduced to less than one
(1). The Board of Directors shall be divided into three classes,
as nearly equal in number as possible, and the term of office
for each respective class of directors shall be so arranged that
the term of office of directors of one class shall expire at
each successive annual meeting of stockholders, and in all cases
as to each director until their successor shall be elected and
shall qualify, or until his earlier resignation, removal from
office, death or incapacity. At each annual meeting of
stockholders after the first annual meeting, the number of
directors equal to the number of directors of the class whose
term expires at the time of such meeting (or such greater or
lesser number as would be required by an increase or decrease in
the size of the Board of Directors) shall be elected to hold
office until the third succeeding annual meeting of stockholders
after their election. This Article FOURTH may not be amended or
repealed without the affirmative vote of at least sixty-six and
two-thirds percent (66-2/3%) of the voting power of the shares
entitled to vote thereon.
B. Special meetings of stockholders of the Corporation may be
called only by the Chairman of the Board or the President or by
the Board of Directors acting pursuant to a resolution adopted by
a majority of the Whole Board. For purposes of these Articles
of Corporation, the term "Whole Board" shall mean the total number
of authorized directors whether or not there exists any vacancies in
previously authorized directorships.
FIFTH: A. The total number of shares of all classes of
stock which the Corporation shall have authority to issue is One
Hundred Forty Million (140,000,000), consisting of One Hundred
million (100,000,000) shares of common stock, par value one-
tenth of one cent ($0.001) per share (the "Common Stock") and
Forty million (40,000,000) shares of preferred stock, par value
one-tenth of one cent ($0.001) per share (the "Preferred
Stock").
B. COMMON STOCK. The shares of Common Stock shall
have no pre-emptive or preferential rights of subscription
concerning further issuance or authorization of any securities
of the Corporation. Each share of Common Stock shall entitle the
holder thereof to one vote, in person or by proxy. The holders
of the Common Stock shall be entitled to receive dividends if,
as and when declared by the Board of Directors.
The Common Stock may be issued from time to time in
one or more series and shall have such other relative,
participant, optional or special rights, qualifications,
limitations or restrictions thereof as shall be stated and
expressed in the resolution or resolutions providing for the
issuance of such Common Stock from time to time adopted by the
Board of Directors pursuant to authority so to adopt which is
hereby vested in the Board of Directors.
C. REFERRED STOCK. The Preferred Stock may be
issued from time to time in one or more series and (a) may have
such voting powers, full or limited, or may be without voting
powers; (b) may be subject to redemption at such time or times
and at such prices; (c) may be entitled to receive dividends
(which may be cumulative or non-cumulative) at such rate or
rates, on such conditions, and at such times, and payable in
preference to, or in such relation to, the dividends payable on
any other class or classes or series of stock; (d) may have such
rights upon the dissolution of, or upon any distribution of the
assets of, the Corporation; (e) may be made convertible into, or
exchangeable for, shares of any other class or classes or of any
other series of the same or any other class or classes of stock
of the Corporation, at such price or prices or at such rates of
exchange, and with such adjustments and (f) shall have such
other relative, participating, optional or special rights,
qualifications, limitations or restrictions thereof as shall
hereafter be stated and expressed in the resolution or
resolutions providing for the issuance of such Preferred Stock
from time to time adopted by the Board of Directors pursuant to
authority so to do which is hereby vested in the Board of Directors.
At any time from time to time when authorized by
resolution of the Board of Directors and without any action by
its shareholders, the Corporation may issue or sell any shares
of its stock of any Class or series, whether out of the unissued
shares thereof authorized by these Articles of Incorporation, as
amended, or out of shares of its stock acquired by it after the
issue thereof, and whether or not the shares thereof so issued
or sold shall confer upon the holders thereof the right to
exchange or convert such shares for or into other shares of
stock of the Corporation of any class or classes or any series
thereof. When similarly authorized, but without any action by
its shareholders, the Corporation may issue or grant rights,
warrants or options, in bearer or registered or such other form
as the Board of Directors may determine, for the purchase of
shares of the stock of any class or series of the Corporation
within such period of time, or without limit as to time, of such
aggregate number of shares, and at such price per share, as the
Board of Directors may determine. Such rights, warrants or
options may be issued or granted separately or in connection
with the issue of any bonds, debentures, notes, obligations or
other evidences of indebtedness or shares of the stock of any
class or series of the Corporation and for such consideration
and on such terms and conditions as the Board of Directors, in
its sole discretion, may determine. In each case, the
consideration to be received by the Corporation for any such
shares so issued or sold shall be such as shall be fixed from
time to time by the Board of Directors.
D. The capital stock, after the amount of the subscription
price, or par value, has been paid in, shall not be subject to
assessment.
E. No holder of shares of stock of the Corporation
shall be entitled as of right to purchase or subscribe for any
part of any unissued stock of this Corporation or of any new or
additional authorized stock of the Corporation of any class
whatsoever, or of any issue of securities of the Corporation
convertible into stock, whether such stock or securities be
issued for money or for a consideration other than money or by
way of dividend, but any such unissued stock or such new or
additional authorized stock or such securities convertible into
stock may be issued and disposed of to such persons, firms,
corporations and associations, and upon such terms as may be
deemed advisable by the Board of Directors without offering to
stockholders of record or any class of stockholders upon the
same terms or upon any terms.
SIXTH: A. Subject to the rights of the holders of any
series of Preferred Stock to elect additional directors under
specified circumstances, the number of directors shall be fixed
from time to time exclusively by the Board of Directors pursuant
to a resolution adopted by a majority of the Whole Board. The
first Director shall be the undersigned incorporator.
B. Subject to the rights of the holders of any
series of Preferred Stock then outstanding, newly created
directorships resulting from any increase in the authorized
number of directors or any vacancies in the Board of Directors
resulting from death, resignation, retirement, disqualification,
removal from office or other cause shall, unless otherwise
provided by law or by resolution of the Board of Directors, be
filled only by a majority vote of the directors then in office,
though less than a quorum, and directors so chosen shall hold
office for a term expiring at the annual meeting of stockholders
at which the term of office of the class to which they have been
chosen expires. No decrease in the authorized number of
directors shall shorten the term of any incumbent director.
C. Advance notice of stockholder nominations
for the election of directors and of business to be brought by
stockholders before any meeting of the stockholders of the
Corporation shall be given in the manner provided in the by-laws
of the Corporation.
D. Subject to the rights of the holders of any
series of Preferred Stock then outstanding, any directors, or
the entire Board of Directors, may be removed from office at any
time, but only for cause and only by the affirmative vote of the
holders at least fifty percent (50%) of the voting power of all
of the then-outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of
directors, voting together as a single class.
SEVENTH: The Board of Directors is expressly empowered to
adopt, amend or repeal by-laws of the Corporation. Any adoption,
amendment or repeal of the by-laws of the Corporation by the
Board of Directors shall require the approval of a majority of
the Whole Board. The stockholders shall also have power to
adopt, amend or repeal the by-laws of the Corporation; provided,
however, that, in addition to any vote of the holders of any
class or series of stock of the Corporation required by law or
by these Articles of Corporation, the affirmative vote of the
holders of at least fifty percent (50%) of the voting power of
all of the then-outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of
directors, voting together as a single class, shall be required
to adopt, amend or repeal any provision of the by-laws of the
Corporation.
EIGHTH: The Corporation reserves the right to amend or
repeal any provision contained in these Articles of
Incorporation in the manner prescribed by the laws of the State
of Utah and all rights conferred upon stockholders are granted
subject to this reservation; provided, however, that,
notwithstanding any other provision of these Articles of
Incorporation or any provision of law that might otherwise
permit a lesser vote or no vote, but in addition to any vote of
the holders of any class or series of the stock of this
Corporation required by law or by these Articles of
Incorporation, the affirmative vote of the holders of at least
sixty-six and two-thirds percent (66-2/3%) of the voting power
of all the then-outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of
Directors, voting together as a single class, shall be required
to amend or repeal this Article EIGHTH, Article SIXTH, Article
SEVENTH, or Article NINTH.
NINTH: The Board of Directors of the Corporation, when
evaluating any offer of another party to (a) make a tender or
exchange offer for any equity security of the Corporation, (b)
merge or consolidate the Corporation with another corporation or
(c) purchase or otherwise acquire all or substantially all of
the properties and assets of the Corporation, may, in connection
with the exercise of its judgment in determining what is in the
best interests of the Corporation and its stockholders, give due
consideration to (i) all relevant factors, including without
limitation the social, legal, environmental and economic effects
on the employees, customers, suppliers and other affected
persons, firms and corporations, and on the communities and
geographical areas in which the Corporation and its subsidiaries
operate or are located and on any of the businesses and
properties of the Corporation or any of its subsidiaries, as
well as such other factors as the directors deem relevant, (ii)
not only the financial consideration being offered in relation
to the then current market price for the Corporation's
outstanding shares of capital stock, but also in relation to the
then current value of the Corporation in a freely negotiated
transaction and in relation to the Board of Directors' estimate
of the future value of the Corporation (including the unrealized
value of its properties and assets) as an independent going
concern, and (iii) the obligations of the Corporation, and any
of its subsidiaries, to provide stable, reliable services on a
continuing or long term basis.
TENTH: A director or officer of the Corporation shall have
no personal liability to the Corporation or its stockholders for
damages for breach of fiduciary duty as a director or officer,
except for (a) acts or omissions which involve intentional
misconduct, fraud or a knowing violation of law; or (b) the
payment of dividends in violation of the applicable statutes of
Utah. If the Utah Revised Business Corporation Act is amended
after approval by the stockholders of this Article TENTH to
authorize corporate action further eliminating or limiting the
personal liability of directors or officers, the liability of a
director or officer of the Corporation shall be eliminated or
limited to the fullest extent permitted by the Utah General
Corporation Law, as so amended from time to time. No repeal or
modification of this Article TENTH by the stockholders shall
adversely affect any right or protection of a director or
officer of the Corporation existing by virtue of this Article
TENTH at the time of such repeal or modification.
ELEVENTH: A. The Corporation shall indemnify and hold
harmless any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he or she is or was or
has agreed to become a director or officer of the Corporation or
is serving at the request of the Corporation as a director or
officer of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise or by reason of
actions alleged to have been taken or omitted in such capacity
or in any other capacity while serving as a director or officer.
The indemnification of directors and officers by the Corporation
shall be to the fullest extent authorized or permitted by
applicable law, as such law exists or may hereafter be amended
(but only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than
permitted prior to the amendment). The indemnification of
directors and officers shall be against all loss, liability and
expense (including attorneys fees, costs, damages, judgments,
fines, amounts paid in settlement and ERISA excise taxes or
penalties) actually and reasonably incurred by or on behalf of a
director or officer in connection with such action, suit or
proceeding, including any appeal; provided, however, that with
respect to any action, suit or proceeding initiated by a
director or officer, the Corporation shall indemnify such
director or officer only if the action, suit or proceeding was
authorized by the Board of Directors of the Corporation, except
with respect to a suit for the enforcement of rights to
indemnification or advancement of expenses in accordance with
Section C below.
B. The expenses of directors and officers incurred as a party to
any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative shall be paid by the
Corporation as they are incurred and in advance of the final
disposition of the action, suit or proceeding; provided,
however, that if applicable law so requires, the advance payment
of expenses shall be made only upon receipt by the Corporation
of an undertaking by or on behalf of the director or officer to
repay ail amounts so advanced in the event that it is ultimately
determined by a final decision, order or decree of a court of
competent jurisdiction that the director or officer is not
entitled to be indemnified for such expenses under this Article
ELEVENTH.
C. Any director or officer may enforce his or her
rights to indemnification or advance payments for expenses in a
suit brought against the Corporation if his or her request for
indemnification or advance payments for expenses is wholly or
partially refused by the Corporation or if there is no
determination with respect to such request within 60 days from
receipt by the Corporation of a written notice from the director
or officer for such a determination. If a director or officer is
successful in establishing in a suit his or her entitlement to
receive or recover an advancement of expenses or a right to
indemnification, in whole or in part, he or she shall also be
indemnified by the Corporation for costs and expenses incurred
in such suit. It shall be a defense to any such suit (other than
a suit brought to enforce a claim for the advancement of
expenses under Section B of this Article ELEVENTH where the
required undertaking, if any, has been received by the
Corporation) that the claimant has not met the standard of
conduct set forth in the Utah Revised Business Corporation Act.
Neither the failure of the Corporation to have made a
determination prior to the commencement of such suit that
indemnification of the director or officer is proper in the
circumstances because the director or officer has met the
applicable standard of conduct nor a determination by the
Corporation that the director or officer has not met such
applicable standard of conduct shall be a defense to the suit or
create a presumption that the director or officer has not met
the applicable standard of conduct. In a suit brought by a
director or officer to enforce a right under this Section C or
by the Corporation to recover and advancement of expenses
pursuant to the terms of an undertaking, the burden of proving
that a director or officer is not entitled to be indemnified or
is not entitled to an advancement of expenses under this Section
C or otherwise, shall be on the Corporation.
D. The right to indemnification and to the
payment of expenses as they are incurred and in advance of the
final disposition of the action, suit or proceeding shall not be
exclusive of any other right to which a person may be entitled
under these Articles of Incorporation or any by-law, agreement,
statute, vote of stockholders or disinterested directors or
otherwise. The right to indemnification under Section A above
shall continue for a person who has ceased to be a director or
officer and shall inure to the benefit of his or her heirs, next
of kin, executors, administrators and legal representatives.
E. The Corporation may maintain insurance, at
its expense, to protect itself and any director, officer,
employee or agent of the Corporation or another corporation,
partnership, joint venture, trust or other enterprise against
any loss, liability or expense, whether or not the Corporation
would have the power to indemnify such person against such loss,
liability or expense under the Utah General Corporation Law.
F. The Corporation shall not be obligated to
reimburse the amount of any settlement unless it has agreed to
such settlement. If any person shall unreasonably fail to enter
into a settlement of any action, suit or proceeding within the
scope of Section A above, offered or assented to by the opposing
party or parties and which is acceptable to the Corporation,
then, notwithstanding any other provision of this Article
ELEVENTH, the indemnification obligation of the Corporation in
connection with such action, suit or proceeding shall be limited
to the total of the amount at which settlement could have been
made and the expenses incurred by such person prior to the time
the settlement could reasonably have been effected.
G. The Corporation may, to the extent
authorized from time to time by the Board of Directors, grant
rights to indemnification and to the advancement of expenses to
any employee or agent of the Corporation or to any director,
officer, employee or agent of any of its subsidiaries to the
fullest extent of the provisions of this Article ELEVENTH
subject to the imposition of any conditions or limitations as
the Board of Directors of the Corporation may deem necessary or
appropriate.
TWELFTH: In the event of a conflict between the terms of
these Articles of Incorporation and the By-Laws of the
Corporation, the terms and provisions of these Articles of
Incorporation shall govern.
THIRTEENTH: The signature of the aforesaid registered
agent of the corporation is as follows:
___________________________
JAMES BARBER
935 E. 7220 South, Ste. D-103
Midvale, Utah 84047
THE UNDERSIGNED, being the incorporator of this Corporation, for
the purpose of adopting these Articles of Incorporation under
the laws of the State of Utah do make, file and record these
Articles of Incorporation, do certify that the facts herein
stated are true, and, accordingly, have hereto set my hand and
seal this ____ day of June, 1999.
_________________________________
JAMES BARBER, Incorporator, Director
935 E. 7220 South, Ste. D-103,
Midvale, Utah 84047
EXHIBIT 3.2
BYLAWS
OF
MORGAN CLARK MANAGEMENT, INC.
ARTICLE I: OFFICES
The principal office of the Corporation in the State of
Utah shall be located in Salt Lake City; the Corporation may
have such other offices, either within or without the State of
Utah, as the Board of Directors my designate or as the business
of the Corporation may require from time to time.
ARTICLE II: SHAREHOLDERS
SECTION 1. Annual Meeting. The annual meeting of the
shareholders shall be held on the 15th day in the month of
December in each year, beginning with the transaction of such
other business as my come before the meeting. If the day fixed
for the annual meeting shall be a legal holiday in the State of
Utah, such meeting shall be held on the next succeeding business
day. If the election of Directors shall be held on the day
designated herein for any annual meeting of the shareholders or
at any adjournment thereof, the Board of Directors shall cause
the election to be held at a special meeting of the shareholders
as soon thereafter as conveniently may be.
SECTION 2. Special Meetings. Special meeting of the
shareholders, for any purpose or purposes, unless otherwise
prescribed by statute, may be called by the President or by the
Board of Directors, and shall be called by the President at the
request of the holders of not less than ten percent (10%) of all
the outstanding shares of the Corporation entitled to vote at
the meeting.
SECTION 3. Place of Meeting. The Board of Directors my
designate any place, either within or without the State of Utah,
unless otherwise prescribed by statute, as the place of meeting
for any annual meeting or for any special meeting. A waiver of
notice signed by all shareholders entitled to vote at a meeting
may designate any place, either within our without the State of
Utah, unless otherwise prescribed by statute, as the place for
the holding of such meeting. If no designation is made, the
place of meeting shall be the principal office of the
Corporation.
SECTION 4. Notice of Meeting. Written notice stating the
place, day and hour of the meeting and, in case of a special
meeting, the purpose or purposes for which the meeting is
called, shall unless otherwise prescribed by statute, be
delivered not less than ten (10) nor more than sixty (60) days
before the date of the meeting, to each shareholder of record
entitled to vote at such meeting. If mailed, such notice shall
be deemed to be delivered when deposited in the United States
Mail, addressed to the shareholder at his address as it appears
on the stock transfer books of the Corporation, with postage
thereon prepaid.
SECTION 5. Closing of Transfer Books or Fixing of Record.
For the purpose of determining shareholders entitled to notice
of or to vote at any meeting of shareholders or any adjournment
thereof, or shareholders entitled to receive payment of any
dividend, or in order to make a determination of shareholders
for any other proper purpose, the Board of Directors of the
Corporation may provide that the stock transfer books shall be
closed for a stated period, but not to exceed in any case fifty
(50) days. If the stock transfer books shall be closed for the
purpose of determining shareholders entitled to notice of or to
vote at a meeting of shareholders, such books shall be closed
for at least fifteen (15) days immediately preceding such
meeting. In lieu of closing the stock transfer books, the board
of Directors may fix in advance a date as the record date for
any such determination of shareholders, such date in any case to
be not more than thirty (30) days and, in case of a meeting of
shareholders, not less than ten (10) days, prior to the date on
which the particular action requiring such determination of
shareholders is to be taken. If the stock transfer books are
not closed and no record date is fixed for the determination of
shareholders entitled to notice of or to vote at a meeting of
shareholders, or shareholders entitled to receive payment of a
dividend, the date on which notice of the meeting is mailed or
the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be
the record date for such determination of shareholders. When a
determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof.
SECTION 6. Voting Lists. The officer or agent having
charge of the stock transfer books for shares of the corporation
shall make a complete list of shareholders entitled to vote at
each meeting of shareholders or any adjournment thereof,
arranged in alphabetical order, with the address of and the
number of shares held by each. Such lists shall be produced
and kept open at the time and place of the meeting and shall be
subject to the inspection of any shareholder during the whole
time of the meeting for the purposes thereof.
SECTION 7. Quorum. A majority of the outstanding shares
of the Corporation entitled to vote, represented in person or by
proxy, shall constitute a quorum at a meeting of shareholders.
If less than a majority of the outstanding shares are
represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without
further notice. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted
which might have been transacted at the meeting as originally
noticed. The shareholders present at a duly organized meeting
may continue to transact business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave
less than a quorum.
SECTION 8. Proxies. At all meetings of shareholders, a
shareholder may vote in person or by proxy executed in writing
by the shareholder or by his or duly authorized attorney-in-
fact. Such proxy shall be filed with the secretary of the
Corporation before or at the time of the meeting. A meeting of
the Board of Directors may be had by means of telephone
conference or similar communications equipment by which all
persons participating in the meeting can hear each other, and
participation in a meeting under such circumstances shall
constitute presence at the meeting.
SECTION 10. Voting of Shares by Certain Holders. Shares
standing in the name of another corporation may be voted by such
officer, agent or proxy as the Bylaws of such corporation may
prescribe or, in the absence of such provision, as the Board of
Directors of such corporation may determine.
Shares held by an administrator, executor, guardian or
conservator may be voted by him either in person or by proxy,
without a transfer of such shares into his name. Shares
standing in the name of a trustee may be voted by him, either in
person or by proxy, but no trustee shall be entitled to vote
shares held by him without a transfer of such shares into his
name.
Shares standing in the name of a receiver may be voted by
such receiver, and shares held by or under the control of a
receiver may be voted by such receiver without the transfer
thereof into his name, if authority to do so be contained in an
appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to
vote such shares until the shares have been transferred into the
name of the pledgee, and thereafter the pledgee shall be
entitled to vote the shares so transferred.
Shares of its own stock belonging to the Corporation shall
not be voted directly or indirectly, at any meeting, and shall
not be counted in determining the total number of outstanding
shares at any given time.
SECTION 11. Informal Action by Shareholders. Unless
otherwise provided by law, any action required to be taken at a
meeting of the shareholders, or any other action which may be
taken at a meeting of the shareholders, may be taken without a
meeting if a consent in writing, setting forth the action so
taken, shall be signed by all of the shareholders entitled to
vote with respect to the subject matter thereof.
ARTICLE III: BOARD OF DIRECTORS
SECTION 1. General Powers. The business and affairs of
the Corporation shall be managed by its Board of Directors.
SECTION 2. Number, Tenure and Qualifications. The number
of directors of the Corporation shall be fixed by the Board of
Directors, but in no event shall be less than one ( 1 ). Each
Director shall hold office until the next annual meeting of
shareholder and until his successor shall have been elected and
qualified.
SECTION 3. Regular Meetings. A regular meeting of the
Board of Directors shall be held without other notice than this
Bylaw immediately after, and at the same place as, the annual
meeting of shareholders. The Board of Directors may provide, by
resolution, the time and place for the holding of additional
regular meetings without notice other than such resolution.
SECTION 4. Special Meetings. Special meetings of the
Board of Directors may be called by or at the request of the
President or any two directors. The person or persons
authorized to call special meetings of the Board of Directors
may fix the place for holding any special meeting of the Board
of Directors called by them.
SECTION 5. Notice. Notice of any special meeting shall be
given at least one (1) day previous thereto by written notice
delivered personally or mailed to each director at his business
address, or by telegram. If mailed, such notice shall be deemed
to be delivered when deposited in the United Sates mail so
addressed, with postage thereon prepaid. If notice be given by
telegram, such notice shall be deemed to be delivered when the
telegram is delivered to the telegraph company. Any directors
may waive notice of any meeting. The attendance of a director
at a meeting shall constitute a waiver of notice of such
meeting, except where a director attends a meeting for the
express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened.
SECTION 6. Quorum. A majority of the number of directors
fixed by Section 2 of the Article III shall constitute a quorum
for the transaction of business at any meeting of the Board of
Directors, but if less than such majority is present at a
meeting, a majority of the directors present may adjourn the
meeting from time to time without further notice.
SECTION 7. Manner of Acting. The act of the majority of
the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
SECTION 8. Action Without a Meeting. Any action that may
be taken by the Board of Directors at a meeting may be taken
without a meeting if a consent in writing, setting forth the
action so to be taken, shall be signed before such action by all
of the directors.
SECTION 9. Vacancies. Any vacancy occurring in the Board
of Directors may be filled by the affirmative vote of a majority
of the remaining directors though less than a quorum of the
Board of Directors, unless otherwise provided by law. A
director elected to fill a vacancy shall be elected for the
unexpired term of his predecessor in office. Any directorship
to be filled by reason of an increase in the number of directors
may be filled by election by the Board of Directors for a term
of office continuing only until the next election of directors
by the shareholders.
SECTION 10. Compensation. By resolution of the Board of
Directors, each director may be paid his expenses, if any, of
attendance at each meeting of the Board of Directors, and may be
paid a stated salary as a director or a fixed sum for attendance
at each meeting of the Board of Directors or both. No such
payment shall preclude any director from serving the Corporation
in any other capacity and receiving compensation thereof.
SECTION 11. Presumption of Assent. A director of the
Corporation who is present at a meeting of the Board of
Directors at which action on any corporate matter is taken shall
be presumed to have assented to the action taken unless his
dissent shall be entered in the minutes of the meeting or unless
he shall file his written dissent to such action with the person
acting as the Secretary of the meeting before the adjournment
thereof, or shall forward such dissent by registered mail to the
Secretary of the Corporation immediately after the adjournment
of the meeting. Such right to dissent shall not apply to a
director who voted in favor of such action.
ARTICLES IV: OFFICERS
SECTION 1. Number. The officers of the corporation shall
be a President, one or more vice Presidents, a Secretary and a
Treasurer, each of whom shall be elected by the Board of
Directors. Such other officers and assistant officers as may be
deemed necessary may be elected or appointed by the Board of
Directors, including a Chairman of the Board. In its
discretion, the Board of Directors may leave unfilled for any
such period as it may determine any office except those of
President and Secretary. Any two or more offices may be held by
the same person. Officers may be directors or shareholders of
the Corporation.
SECTION 2. Election and Term of Office. The officers of
the Corporation to be elected by the board of Directors shall be
elected annually by the board of Directors at the first meeting
of the Board of Directors held after each annual meeting of the
shareholders. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as
conveniently may be. Each officer shall hold office until his
successor shall have been duly elected and shall have qualified,
or until his death, or until he shall resign or shall have been
removed in the manner hereinafter provided.
SECTION 3. Removal. Any officer or agent may be removed
by the Board of Directors whenever, in its judgement, the best
interests of the Corporation will be served thereby, but such
removal shall be without prejudice to the contract rights, if
any, of the person so removed. Election or appointment of an
officer or agent shall not of itself create contract rights, and
such appointment shall be terminable at will.
SECTION 4. Vacancies. A vacancy in any office because of
death, resignation, removal, disqualification or otherwise, may
be filled by the Board of Directors for the unexpired portion of
the term.
SECTION 5. President. The president shall be the
principal executive officer of the Corporation and, subject to
the control of the Board of Directors, shall in general
supervise and control all of the business and affairs of the
Corporation. He shall, when present, preside at all meetings of
the shareholders and of the Board of Directors, unless there is
a Chairman of the Board, in which case the Chairman shall
preside. He may sign, with the Secretary or any other proper
officer of the Corporation thereunto authorized by the Board of
Directors, certificates for shares of the Corporation, any deed,
mortgages, bonds, contract, or other instruments which the Board
of Directors has authorized to be executed, except in cases
where the signing and execution thereof shall be expressly
delegated by the Board of Directors or by there Bylaws to some
other officer or agent of the Corporation, or shall be required
by law to be otherwise signed or executed; and in general shall
perform all duties incident to the office of President and such
other duties as may be prescribed by the Board of Directors from
time to time.
SECTION 6. Vice President. In the absence of the
president or in the event of his death, inability or refusal to
act, the Vice President shall perform 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
President shall perform such other duties as from time to time
may be assigned to him by the President or by the Board of
Directors, If there is more than one Vice President, each Vice
President shall succeed to the duties of the President in order
of rank as determined by the Board of Directors. If no such
rank has been determined, then each Vice President shall succeed
to the duties of the President in order of date of election, the
earliest date having the first rank.
SECTION 7. Secretary. The Secretary shall: (a) keep the
minutes of the Board of Directors in one or more minute books
provided for the purpose; (b) see that all notices are duly
given in accordance with the provisions of the Bylaws or as
required by law; (c) be custodian of the corporate records and
of the seal of the Corporation and see that the seal of the
Corporation is affixed to all documents, the execution of which
on behalf of the Corporation under its seal is duly authorized;
(d) keep a register of the post office address of each
shareholder which shall be furnished to the Secretary by such
shareholder; (e) sign with the President certificates for share
of the Corporation, the issuance of which shall have been
authorized by resolution of the Board of Directors; (f) have
general charge of the stock transfer books of the Corporation,
and (g) in general perform all duties incident to the office of
the Secretary and such other duties as from time to time may be
assigned to him by the President or by the Board of Directors.
SECTION 8. Treasurer. The Treasurer shall: (a) have
charge and custody of and be responsible for all funds and
securities of the Corporation; (b) receive and give receipts
for moneys due and payable to the Corporation in such banks,
trust companies or other depositories as shall be selected in
accordance with the provisions of Article VI of these Bylaw; and
(c) in general perform all of the duties incident to the office
of Treasurer and such other duties as from time to time may be
assigned to him by the President or by the Board of Directors.
If required by the Board of Directors, the Treasurer shall give
a bond for the faithful discharge of his duties in such sum and
with such sureties as the Board of Directors shall determine.
SECTION 9. Salaries. The salaries of the officers shall
be fixed from time to time by the Board of Directors, and no
officer shall be prevented from receiving such salary by reason
of the fact that he is also a director of the Corporation.
ARTICLE V: INDEMNITY
The Corporation shall indemnify its directors, officers and
employees as follows:
(a) Every director, officer, or employee of the Corporation
shall be indemnified by the Corporation against all expenses and
liabilities, including counsel fees, reasonable incurred by or
imposed upon him in connection with any proceeding to which he
may become involved, by reason of his being or having been a
director, officer, employee or agent of the Corporation or is or
was serving at the request of the Corporation as a director,
officer, employee or agent of the corporation, partnership,
joint venture, trust or enterprise, or any settlement thereof,
whether or not he is a director, officer, employee or agent at
the time such expenses are incurred, except in such cases
wherein the director, officer, or employee is adjudged guilty of
willful misfeasance or malfeasance in the performance of his
duties; provided that in the event of a settlement the
indemnification herein shall apply only when the Board of
Directors approves such settlement and reimbursement as being
for the best interests of the Corporation.
(b) The Corporation shall provide to any person who is or
was a director, officer, employee, or agent of the Corporation
or is or was serving at the request of the Corporation as
director, officer, employee or agent of the corporation,
partnership, joint venture, trust or enterprise, the indemnity
against expenses of suit, litigation or other proceedings which
is specifically permissible under applicable law.
The Board of Directors may, in its discretion, direct the
purchase of liability insurance by way of implementing the
provisions of the Article V.
ARTICLE VI: CONTRACTS, LOANS, CHECKS, AND DEPOSITS
SECTION 1. Contracts. The Board of Directors may
authorize any office or officers, agent or agents, to enter into
any contract or execute and deliver any instrument in the name
of and on behalf of the Corporation, and such authority may be
general or confined to specific instances.
SECTION 2. Loans. No loans shall be contracted on behalf
of the Corporation and no evidences of indebtedness shall be
issued in its name unless authorized by a resolution of the
Board of Directors. Such authority may be general or confined
to specific instances.
SECTION 3. Checks, Drafts, etc. All checks, drafts or
other orders for the payment of money, notes or other evidences
of indebtedness issued in the name of the Corporation, shall be
signed by such officer or officers, agent or agents of the
Corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
SECTION 4. Deposits. All funds of the Corporation not
otherwise employed shall be deposited from time to time to the
credit of the Corporation in such banks, trust companies or
other depositories as the Board of Directors may select.
ARTICLE VII. CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 1. Certificates for Shares. Certificates
representing shares of the Corporation shall be in such form as
shall be determined by the Board of Directors. Such
certificates shall be signed by the President and by the
Secretary or by such other officers authorized by law and by the
Board of Directors so to do, and sealed with the corporate seal.
All certificates for shares shall be consecutively numbered or
otherwise identified. The name and address of the person to
whom the shares represented thereby are issued, with the number
of shares and date of issue, shall be entered on the stock
transfer books of the Corporation. All certificates surrendered
to the Corporation for transfer shall be cancelled and no new
certificate shall be issued until the former certificate for a
like number of shares shall have been surrendered and cancelled,
expect that in case of a lost, destroyed or mutilated
certificate a new one may be issued therefore upon such terms
and indemnity to the Corporation as the Board of Directors may
prescribe.
SECTION 2. Transfer of Shares. Transfer of shares of the
Corporation shall be made only on the stock transfer books of
the Corporation by the holder of record thereof or by his legal
representative, who shall furnish proper evidence of authority
to transfer, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary of the
Corporation, and on surrender for cancellation of the
certificate for such shares. The person in whose name shares
stand on the books of the Corporation shall be deemed by the
Corporation to be the owner thereof for all purposes, Provided,
however, that upon any action undertaken by the shareholder to
elect S Corporation status pursuant to Section 1362 of the
Internal Revenue Code and upon any shareholders agreement
thereto restricting the transfer of said shares so as to
disqualify said S Corporation status, said restriction on
transfer shall be made a part of the Bylaws so long as said
agreements is in force and effect.
ARTICLE VIII: FISCAL YEAR
The fiscal year of the Corporation shall begin on the 1st
day of January and end on the 31st day of December of each year.
ARTICLE IX: DIVIDENDS
The Board of Directors may from time to time declare, and
the Corporation may pay, dividends on its outstanding shares in
the manner and upon the terms and condition provided by law and
its Articles of Incorporation.
ARTICLE X: CORPORATE SEAL
The Board of Directors shall provide a corporate seal which
shall be circular in form and shall have inscribed thereon the
name of the Corporation and the state of incorporation and the
words, Corporate Seal.
ARTICLE XI: WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is
required to be given to any shareholder or director of the
Corporation under the provision of the Articles of Incorporation
or under the provisions of the applicable Business Corporation
Act, a waiver thereof in writing, signed by the person or
persons entitled to such notice, whether before or after the
time stated therein, shall be deemed equivalent to the giving of
such notice.
ARTICLE XII: AMENDMENTS
These Bylaws may be altered, amended or repealed and new
Bylaws may be adopted by the Board of Directors at any regular
or special meeting of the Board of Directors.
The above Bylaws are certified to have been adopted by the Board
of Directors of the Corporation on the _____ day of June, 1999.
Vincent van den Brink, Secretary
EXHIBIT 27
MORGAN CLARK MANAGEMENT, INC.
(A Development Stage Company)
Balance Sheet
ASSETS
June 30,1999
CURRENT ASSETS
Cash $ -
Total Current Assets -
TOTAL ASSETS $ -
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable - related party $ 100
Total Liabilities 100
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock: $0.001 par value, authorized 100,000,000
shares; 1,000,000 shares issued and outstanding 1,000
Preferred stock: $0.001 par value, authorized 40,000,000
shares; -0- shares issued and outstanding -
Subscription receivable (900)
Additional paid-in capital -
Deficit accumulated during the development stage (200)
Total Stockholders' Equity (Deficit) (100)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ -
The accompanying notes are an integral part of these financial
Statements.
MORGAN CLARK MANAGEMENT, INC.
(A Development Stage Company)
Statement of Operations
From Inception on
June 3,1999 Through
June 30,1999
REVENUES $ -
OPERATING COSTS
General and administrative 200
Total Operating Costs 200
LOSS FROM OPERATIONS (200)
NET LOSS $ (200)
BASIC LOSS PER SHARE $ (0.00)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 1,000,000
The accompanying notes are an integral part of these financial
Statements.
MORGAN CLARK MANAGEMENT, INC.
(A Development Stage Company)
Statement of Stockholders' Equity (Deficit)
Deficit
Accumulated
Additional During the
Common Stock Paid-in Subscription Development
Shares Amount Capital Receivable Stage
Balance
June 3, 1999
(Inception) 1,000,000 $1,000 $ - $ (900) $ -
Net loss for
the period
from inception
on
June 3, 1999
through
June 30, 1999 - - - _ (200)
Balance
June 30,
1999 1,000,000 $1,000 $ - $ (900) $ (200)
The accompanying notes are an integral part of these financial
Statements.
MORGAN CLARK MANAGEMENT, INC.
(A Development Stage Company)
Statement of Cash Flows
From
Inception on
June 3,1999 Through
June 30,1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (200)
Changes in operating assets and liabilities:
Common stock issued for stock receivable 900
Decrease (increase) in subscription receivable (900)
Increase (decrease) in accounts payable 100
Net Cash (Used) by Operating Activities (100)
CASH FLOWS FROM INVESTING ACTIVITIES -
CASH FLOWS FROM FINANCING ACTIVITIES
Common stock issued for cash 100
Net Cash Provided by Financing Activities 100
INCREASE IN CASH AND CASH EQUIVALENTS -
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD -
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ -
Cash paid for:
Interest $ -
Income taxes $ -
The accompanying notes are an integral part of these financial
Statements.
MORGAN CLARK MANAGEMENT, INC.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The Company was organized under the laws of the State of Utah on
June 3, 1999. The purpose of the corporation is to engage in
any lawful activity.
Currently, the Company is seeking new business opportunities
believed to hold a potential profit or to merge with an existing
company.
b. Accounting Method
The Company's financial statements are prepared using the
accrual method of accounting. The Company has adopted a June 30
year end.
c. Basic Loss Per Share
The computations of basic loss per share of common stock are
based on weighted average number of shares issued and
outstanding at the date of the financial statements.
d. Use of 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 statement and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
e. Cash Equivalents
The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash
equivalents.
f. Provision for Taxes
At June 30, 1999, the Company had net operating loss
carryforwards of approximately $200 that may be offset against
future taxable income through 2014. No tax benefit has been
reported in the financial statements, because the potential tax
benefits of the net operating loss carryforwards are offset by a
valuation allowance of the same amounts.
MORGAN CLARK MANAGEMENT, INC.
(A Development Stage company)
Notes to the Financial Statements
June 30, 1999
NOTE 2 - 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. In the interim, shareholders of
the Company have committed to meeting its minimal operating
expenses.
PART III
ITEM 1. Index to Exhibits
The following exhibits are filed with this Registration
Statement:
Exhibit No. Exhibit Name
3.1 Articles of Incorporation
3.2 By-Laws
4. See Exhibit No. 3.1, Articles of Incorporation,
Article Fifth
27. Financial Data Schedule
ITEM 2. Description of Exhibits
See Item I above.
SIGNATURES
In accordance with Section 12 of the Securities and
Exchange Act of 1934, the registrant caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly organized.
MORGAN CLARK MANAGEMENT, INC.
(Registrant)
Date: November 16, 1999 By: /S/ VINCENT VAN DEN BRINK
Vincent van den Brink, President
