<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
1st Amendment
SEC FILE NO. 333-47238
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
MORANZO, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 5812 88-0469180
-------- ---- ----------
(STATE OR OTHER JURISDICTION OF (PRIMARY (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) SIC NUMBER) IDENTIFICATION NO.)
566 PORT HARWICK, CHULA VISTA, CA 91913 619-692-2505
--------------------------------------- ------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (TELEPHONE)
ROBERTO BERNARDONI
566 PORT HARWICK, CHULA VISTA, CA 91913 619-692-2505
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(NAME & ADDRESS OF AGENT FOR SERVICE) (TELEPHONE)
</TABLE>
Approximate Date of Commencement of Proposed Sale to the Public: As soon as
practicable after the effective date of this Registration Statement.
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [ ]
CALCULATION OF REGISTRATION FEE
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Title of Each Proposed Proposed
Class of Maximum Maximum
Securities Offering Aggregate Amount of
to be Amount to be Price Offering Registration
Registered Registered Per Unit (1) Price (2) Fee
---------- ------------ ------------ --------- ------------
<S> <C> <C> <C> <C>
Common 4,720,000 $ 0.10 $ 472,000 $124.61
</TABLE>
(1) Based on the price paid per share by the selling shareholders.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE> 2
PROSPECTUS
MORANZO, INC.
4,720,000 SHARES
COMMON STOCK
The selling shareholders named in this prospectus are offering all of the shares
of common stock offered through this prospectus. The shares were acquired by the
48 selling shareholders directly from Moranzo in a private offering that was
exempt from registration under the U.S. Securities laws. See section entitled
"Description of Securities".
Our common stock is presently not traded on any market or securities exchange.
THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH
DEGREE OF RISK. SEE SECTION ENTITLED "RISK FACTORS" BEGINNING ON PAGE 4.
Neither the Securities Exchange Commission nor any state securities commission
has approved or disapproved of these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal
offense.
The date of this Prospectus is: September 30, 2000
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
Summary ............................................................................................ 4
Offering ........................................................................................... 4
Risk Factors ....................................................................................... 4
Forward Looking Statements ......................................................................... 6
Use of Proceeds .................................................................................... 6
Determination of Offering Price .................................................................... 7
Dilution ........................................................................................... 7
Dividend Policy .................................................................................... 7
Selling Shareholders ............................................................................... 7
Plan of Distribution ............................................................................... 9
Legal Proceedings .................................................................................. 10
Directors, Officers, Promoters and Control Persons ................................................. 10
Security Ownership of Certain Beneficial Owners and Management ..................................... 12
Description of Securities .......................................................................... 12
Interest of Named Experts and Counsel .............................................................. 13
Disclosure of Commission Position for Securities Act Liabilities ................................... 13
Organization within Last Five Years ................................................................ 13
Description of Business ............................................................................ 14
Plan of Operation .................................................................................. 20
Description of Property ............................................................................ 21
Certain Relationships and Related Transactions ..................................................... 21
Market Price of and Dividends on the Common Equity and Other Stockholder Matters ................... 21
Executive Compensation ............................................................................. 21
Financial Statements ............................................................................... 22
Changes in or Disagreements with Accountants on Accounting Control & Financial Disclosure ......... 22
Indemnification of Directors and Officers .......................................................... 23
Other Expenses of Issuance and Distribution ........................................................ 23
Recent Sales of Unregistered Securities ............................................................ 23
Exhibit List ....................................................................................... 24
Undertakings ....................................................................................... 25
Signatures ......................................................................................... 26
</TABLE>
<PAGE> 4
SUMMARY
Moranzo, Inc. was incorporated in Delaware on May 31, 1994. Management formed
Moranzo to develop a chain of full-service, white tablecloth Italian restaurants
serving creatively prepared, premium quality cuisine based on authentic Italian
regional recipes. Moranzo has not advanced beyond its business plan state from
its inception until the date of this filing. In the interim, management refined
their concept of an up-scale Italian restaurant at La Strada, a separate private
restaurant company they partially controlled and owned. During June 1998,
Moranzo received initial funding through the sale of common stock to investors.
From inception until the date of this filing, we had no material operating
activities.
OFFERING
Securities Being Offered 4,720,000 shares of common stock held by 48
selling shareholders. The 4,800,000 shares of
restricted stock held by the officers of the
corporation are not being offered. See section
entitled "Description of Securities to be
Registered".
Securities Issued
And to be Issued 9,520,000 shares of common stock were issued and
outstanding as of the date of this prospectus.
See section entitled "Description of Securities
to be Registered".
Use of Proceeds We will not receive any proceeds from the sale
of the common stock by the selling shareholders.
See section entitled "Use of Proceeds".
RISK FACTORS
Investors in Moranzo should be particularly aware of the inherent risks
associated with the company's business plan. These risks include but are not
limited to:
Our business strategy requires us to raise funds through a private placement.
Without funding, Moranzo could remain as a start-up company with no material
operations, revenues, or profits.
Although we intend to implement our business plan through the
foreseeable future and will do our best to mitigate the risks associated
with the business plan, there can be no assurance that our efforts will
be successful.
We have no liquidation plans should we be unable to receive funding. Should we
be unable to implement our business plan, we would investigate all options
available to retain value for the shareholders.
Among the options that would be considered are: acquisition of a unique
product or service, or a merger or acquisition of another business
entity that has revenue and/or long-term growth potential. However,
there are no pending arrangements, understandings or agreements with
outside parties for acquisitions, mergers or any other material
transactions.
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This is the initial stage of our business. Moranzo has no operating history, no
material current operations, and no profits.
While we intend to open our restaurants per our business plan, our plan
may not work. In such a scenario, we could remain as a start-up company
with no material operations, revenues, or profits.
Although management has been successful in planning, opening, and operating
other Italian restaurants and believes their plan for Moranzo will generate
revenue and profit, there is no guarantee their past experiences will provide
Moranzo with similar future successes.
Our restaurants may not open, or we may not be able to open our restaurants on a
timely basis. Delays in opening or failure to open planned new restaurants could
result in a material reduction of our revenue and profit.
We currently anticipate that each new restaurant will take several
months to reach planned operating levels due to inefficiencies typically
associated with opening a new restaurant, such as lack of market
awareness, acceptance of our restaurant concept and time required to
hire sufficient staff.
Our competitors are well-established and have substantially greater financial,
marketing, personnel and other resources than we do. Should we be unable to
achieve enough customer market share in our industry, we may experience less
revenue than anticipated and a significant reduction in our profit.
There are many different segments within the restaurant industry that
are distinguished by types of service, food types and price/value
relationships. We plan to position our restaurants only in the
high-quality, full-service Italian food segment of the industry that is
familiar to our management. Although we believe we will be able compete
very favorably in this Italian restaurant segment, there is no guarantee
we will be successful in attracting enough customers to be a competitive
force in each of our planned restaurant locations.
We may be unable to attract and retain sufficient qualified personnel needed to
provide a high level of service to our customers. This could lower our revenue
due to customer dissatisfaction. It might also substantially increase our labor
costs and lower profit in the current tight labor marketplace in the U.S.
Our success and the success of our individual restaurants depend upon
our ability to attract and retain highly motivated, well qualified
management personnel, as well as a sufficient number of qualified
employees, including guest service and culinary staff. Qualified
individuals needed to fill these positions are in short supply. If we
encounter substantial problems recruiting and retaining these
individuals, we could experience delays in the planned opening of a new
restaurant or increased costs due to higher employee turnover in
existing restaurants. In addition, while our by-laws allow for
indemnification of our directors and officers, we currently have no
individual indemnification agreements protecting company employees.
Management intends to implement individual indemnification agreements
protecting employees when Moranzo receives its next funding per its
business plan. We believe the current indemnification provided by our
by-laws is
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sufficient in our start-up phase.
The current officers, Mr. Giovannini and Mr. Bernardoni, are the sole officers
and directors of Moranzo and have control in directing the activities of
Moranzo. They are involved in other business activities and may, in the future,
become involved in additional business opportunities. If a specific business
opportunity becomes available, the officers and directors may face a conflict of
interest.
We have not formulated a plan to resolve any conflicts that may arise.
While Moranzo and its sole officers and directors have not formally
adopted a plan to resolve any potential or actual conflicts of interest
that exist or that may arise, they have verbally agreed to limit their
roles in all other business activities to roles of passive investors and
devote full time services to Moranzo after we raise capital of
$7,500,000 through the sale of securities through a private placement
and are able to provide officers' salaries per our business plan.
There is no current public market for Moranzo's securities. We have no current
public offering and no proposed public offering of our equity. As our stock is
not publicly traded, investors should be aware they probably will be unable to
sell their shares and their investment in our securities are not liquid.
We plan to file for trading on the OTC Electronic Bulletin Board which
is sponsored by the National Association of Securities Dealers, the
NASD. While this could create liquidity for our shareholders through
public trading by securities dealers, we do not know when we will be
able to file for trading, and there is no guarantee of trading volume or
trading price levels sufficient for investors to sell their stock,
recover their investment in our stock, or profit from the sale of their
stock.
FORWARD LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risk and
uncertainties. We use words such as "anticipate", "believe", "plan", "expect",
"future", "intend", and similar expressions to identify such forward-looking
statements. Investors should be aware that all forward-looking statements
contained within this filing are good faith estimates of management as of the
date of this filing. Our actual results could differ materially from those
anticipated in these forward-looking statements for many reasons, including the
risks faced by us as described in the "Risk Factors" section and elsewhere in
this prospectus.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock offered
through this prospectus by the selling shareholders. We plan to use the June
1998, $5,900 funding from our sale of common stock for the following estimated
costs:
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<S> <C>
Licenses and fees $ 500
Outside services $1,000
Legal and accounting $4,000
</TABLE>
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<TABLE>
<S> <C>
Supplies and miscellaneous $ 400
Total $5,900
</TABLE>
DETERMINATION OF OFFERING PRICE
We will not determine the offering price of the common stock. The offering price
will be determined by market factors and the independent decisions of the
selling shareholders. See section entitled "Selling Shareholders".
DILUTION
The common stock to be sold by the selling shareholders is common stock that is
currently issued and outstanding. Accordingly there will be no dilution to our
existing shareholders.
DIVIDEND POLICY
We have never declared or paid any cash dividends on our common stock. We
currently intend to retain future earnings, if any, to finance the expansion of
the business. As a result, we do not anticipate paying any cash dividends in the
foreseeable future.
SELLING SHAREHOLDERS
The selling shareholders named in this prospectus are offering all of the
4,720,000 shares of common stock offered through this prospectus. The shares
include the following:
1. 59,000 shares of our common stock that the selling shareholders acquired
from us in an offering that was exempt from registration pursuant to
Section 4(2) as amended of the Securities Act of 1933 and completed on
June 30, 1998; and
2. 4,661,000 shares of our common stock that the selling shareholders
acquired from us pursuant to an 80 for 1 forward stock split executed
March 15, 2000.
The following table provides as of September 30, 2000, information regarding the
beneficial ownership of our common stock held by each of the selling
shareholders, including:
1. The number of shares owned by each prior to this offering;
2. The total number of shares that are to be offered for each;
3. The total number of shares that will be owned by each upon completion of
the offering;
4. The percentage owned by each; and
5. The identity of the beneficial holder of any entity that owns the
shares.
To the best of our knowledge, the named parties in the table that follows are
the beneficial owners and have the sole voting and investment power over all
shares or rights to the shares reported. In addition, the table assumes that the
selling shareholders do not sell shares of common stock not being offered
through this prospectus and do not purchase additional shares of common stock.
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The column reporting the percentage owned upon completion assumes that all
shares offered are sold, and is calculated based on 9,520,000 shares outstanding
on September 30, 2000.
<TABLE>
<CAPTION>
Shares Total of Total Percent
Owned Prior Shares Shares Owned
Name of To This Offered After After
Selling Shareholder Offering For Sale Offering Offering
------------------- ----------- -------- -------- --------
<S> <C> <C> <C> <C>
Alice Arterberry 80,000 80,000 0 0
Lawrence Barrett 80,000 80,000 0 0
John Batliner 320,000 320,000 0 0
Brian Belknap 160,000 160,000 0 0
David Bounds 80,000 80,000 0 0
Serena Boyd 80,000 80,000 0 0
Theodore Daniels 80,000 80,000 0 0
Richard Davis 80,000 80,000 0 0
Victor Farley 80,000 80,000 0 0
Dominique Feeley 80,000 80,000 0 0
Adolph Guerrero 80,000 80,000 0 0
Daniel Heavlin 80,000 80,000 0 0
Mary Heavlin 80,000 80,000 0 0
William Howe 80,000 80,000 0 0
Nichole Hudson 320,000 320,000 0 0
Cheryl Kozlowski 80,000 80,000 0 0
Ray Kruger 80,000 80,000 0 0
Russell Lajoie 80,000 80,000 0 0
Jaime Lara 80,000 80,000 0 0
Jill Ann Lewis 80,000 80,000 0 0
Sean Manning 80,000 80,000 0 0
Bill McMillen 80,000 80,000 0 0
John Neel 80,000 80,000 0 0
Shannon Nevett 320,000 320,000 0 0
Dianne Newman 80,000 80,000 0 0
Leslie O'Keefe 80,000 80,000 0 0
Kurt Pierson 80,000 80,000 0 0
Ryan Ramos 80,000 80,000 0 0
Gerrie Rikert 80,000 80,000 0 0
Elizabeth Schier 80,000 80,000 0 0
Rosemary Shaber 80,000 80,000 0 0
James Shafer 80,000 80,000 0 0
Maureen Sipple 80,000 80,000 0 0
Garry Smith 80,000 80,000 0 0
Terry Smith 80,000 80,000 0 0
Shirley Spittle 80,000 80,000 0 0
Andrew Stamets 80,000 80,000 0 0
Christopher Stapleton 80,000 80,000 0 0
L.E. Stapleton 80,000 80,000 0 0
Rosemary Stapleton 80,000 80,000 0 0
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C>
Margaret Sturtevant 80,000 80,000 0 0
Toshaiki Tachikawa 80,000 80,000 0 0
Sharon Thompson 80,000 80,000 0 0
Kenneth Twedt 80,000 80,000 0 0
Rodger Ward 80,000 80,000 0 0
Terry Westergard 80,000 80,000 0 0
Richard White 80,000 80,000 0 0
Leonard Womack 80,000 80,000 0 0
Marvin Woodring 80,000 80,000 0 0
</TABLE>
To our knowledge, none of the selling shareholders:
1. Has had a material relationship with Moranzo other than as a shareholder
as noted above at any time within the past three years; or
2. Has ever been an officer or director of Moranzo.
PLAN OF DISTRIBUTION
The selling shareholders have not informed us of how they plan to sell their
shares. However, they may sell some or all of their common stock in one or more
transactions, including block transactions:
1. on such public markets or exchanges as the common stock may from time to
time be trading;
2. in privately negotiated transactions;
3. through the writing of options on the common stock;
4. in short sales; or
5. in any combination of these methods of distribution.
The sales price to the public may be:
1. the market price prevailing at the time of sale;
2. a price related to such prevailing market price; or
3. such other price as the selling shareholders determine from time to
time.
The shares may also be sold in compliance with the Securities and Exchange
Commission's Rule 144.
The selling shareholders may also sell their shares directly to market makers
acting as principals or brokers or dealers, who may act as agent or acquire the
common stock as a principal. Any broker or dealer participating in these
transactions as agent may receive a commission from the selling shareholders,
or, if they act as agent for the purchaser of this common stock, from that
purchaser. The selling shareholders will likely pay the usual and customary
brokerage fees for those services. Brokers or dealers may agree with the selling
shareholders to sell a specified number of shares at a stipulated price per
share and, to the extent that a broker or dealer is unable to do so acting as
agent for the selling shareholders, to purchase, as principal, any unsold
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shares at the price required to fulfill the respective broker's or dealer's
commitment to the selling shareholders. Brokers or dealers who acquire shares as
principals may thereafter resell these shares from time to time in transactions
in a market or on an exchange, in negotiated transactions or otherwise, at
market prices prevailing at the time of sale or at negotiated prices, and in
connection with those resales may pay or receive commissions to or from the
purchasers of those shares. These transactions may involve cross and block
transactions that may involve sales to and through other brokers or dealers. If
applicable, the selling shareholders also may have distributed, or may
distribute, shares to one or more of their partners who are unaffiliated with
us. These partners may, in turn, distribute the shares as described above. We
can provide no assurance that all or any of the common stock offered will be
sold by the selling shareholders.
We are bearing all costs relating to the registration of the common stock. Any
commissions or other fees payable to brokers or dealers in connection with any
sale of the common stock, however, will be borne by the selling shareholders or
other party selling that common stock.
The selling shareholders must comply with the requirements of the Securities Act
of 1933 and the Securities Exchange Act of 1934 in the offer and sale of their
common stock. A selling shareholder may be deemed an underwriter if: (1) they
acquired the stock with a view to distribute; (2) participated either directly
or indirectly in the offering or selling process; (3) or sell on behalf of a
control person. In particular, during the time as the selling shareholders may
be deemed to be an underwriter, they must comply with applicable law and may,
among other things:
1. not engage in any stabilization activities in connection with our common
stock;
2. furnish each broker or dealer through which common stock may be offered,
copies of this prospectus, as amended from time to time, as may be
required by the broker or dealer; and
3. not bid for or purchase any of our securities or attempt to induce any
person to purchase any of our securities other than as permitted under
the Securities Exchange Act.
LEGAL PROCEEDINGS
Moranzo is not currently involved in any legal proceedings and is not aware of
any pending or potential legal actions.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS,
AND CONTROL PERSONS
The Directors and Officers of Moranzo, all of those whose one year terms will
expire 5/20/01, or at such a time as their successors shall be elected and
qualified are as follows:
<TABLE>
<CAPTION>
Name & Address Age Position Date First Elected Term Expires
-------------- --- -------- ------------------ ------------
<S> <C> <C> <C> <C>
Carlo Giovannini 67 President, 6/15/94 5/20/01
566 Port Harwick Director
Chula Vista, CA 91913
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C>
Roberto Bernardoni 54 Secretary, 6/15/94 5/20/01
566 Port Harwick Treasurer,
Chula Vista, CA 91913 Director
</TABLE>
Each of the foregoing persons may be deemed a "promoter" of Moranzo, as that
term is defined in the rules and regulations promulgated under the Securities
and Exchange Act of 1933.
Directors are elected to serve until the next annual meeting of stockholders and
until their successors have been elected and qualified. Officers are appointed
to serve until the meeting of the Board of Directors following the next annual
meeting of stockholders and until their successors have been elected and
qualified.
No Executive Officer or Director of the Corporation has been the subject of any
Order, Judgement, or Decree of any Court of competent jurisdiction, or any
regulatory agency permanently or temporarily enjoining, barring suspending or
otherwise limiting him from acting as an investment advisor, underwriter, broker
or dealer in the securities industry, or as an affiliated person, director or
employee of an investment company, bank, savings and loan association, or
insurance company or from engaging in or continuing any conduct or practice in
connection with any such activity or in connection with the purchase or sale of
any securities.
No Executive Officer or Director of the Corporation has been convicted in any
criminal proceeding (excluding traffic violations) or is the subject of a
criminal proceeding which is currently pending.
No Executive Officer or Director of the Corporation is the subject of any
pending legal proceedings.
Resumes
Carlo Giovannini
1991 - Present Manager and shareholder of Trattoria La Strada
Restaurants, San Diego, California. Responsible for
purchasing, supervision of office, bar and food service
managers, staff training programs, advertising, new
restaurant site selection, new restaurant construction -
interior design - leasehold improvements. Implemented
customer satisfaction, public relations, and regional
restaurant "best of" contest programs that have earned
La Strada restaurants consistent top food and top
overall Italian restaurant awards in Southern California
regional contests every year since 1991.
1991 - Present Board of directors member and shareholder, Becar
Corporation, San Diego, California. The Company imports
Italian marble, granite, and furniture for sale
throughout the United States.
Roberto Bernardoni
1991 - Present Chef and shareholder of Trattoria La Strada Restaurants,
San Diego, California. Responsible for implementation of
culinary design, creation and
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implementation of new menu dishes, managing all kitchen
personnel, cuisine quality control, daily menu food
selections. Originally from Florence, Italy, his
speciality is Tuscan cuisine solely in an up-scale meal
price range. Designed and manages a "just in time
delivery" food inventory system and daily advance baking
and pasta preparation systems in order to serve only
fresh food each day. The inventory system utilizes daily
computerized inventory updates and automated purchasing
systems linked with local food and beverage providers in
order to maintain minimum inventory levels through six
days per week deliveries.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth information on the ownership of Moranzo's voting
securities by Officers, Directors and major shareholders as well as those who
own beneficially more than five percent of Moranzo's common stock through the
most current date - September 30, 2000:
<TABLE>
<CAPTION>
Title Of Name & Amount & Percent
Class Address Nature of owner Owned
----- ------- --------------- -------
<S> <C> <C> <C>
Common Carlo Giovannini 2,400,000 25.5%
566 Port Harwick
Chula Vista, CA 91913
Common Roberto Bernardoni 2,400,000 25.5%
566 Port Harwick
Chula Vista, CA 91913
Total Shares Owned by Officers & Directors
As a Group 4,800,000 51%
</TABLE>
(A) Mr. Giovannini received for administrative services 1,000 shares of
Moranzo's common stock on May 31, 1994. He received for administrative
services 29,000 shares of Moranzo's common stock on March 15, 1998.
2,370,000 shares of Moranzo's common stock were issued to him per an 80
for 1 forward stock split on March 15, 2000.
(B) Mr. Bernardoni received for administrative services 1,000 shares of
Moranzo's common stock on May 31, 1994. He received for administrative
services 29,000 shares of Moranzo's common stock on March 15, 1998.
2,370,000 shares of Moranzo's common stock were issued to him per an 80
for 1 forward stock split on March 15, 2000.
DESCRIPTION OF SECURITIES
Moranzo's Certificate of Incorporation authorizes the issuance of 50,000,000
Shares of common stock, .001 par value per share. There is no preferred stock
authorized. Holders of shares of
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common stock are entitled to one vote for each share on all matters to be voted
on by the stockholders. Holders of Common Stock have cumulative voting rights.
Holders of shares of common stock are entitled to share ratably in dividends, if
any, as may be declared, from time to time by the Board of Directors in its
discretion, from funds legally available therefor. In the event of a
liquidation, dissolution, or winding up of Moranzo, the holders of shares of
common stock are entitled to share pro rata all assets remaining after payment
in full of all liabilities. Holders of Common Stock have no preemptive or other
subscription rights, and there are no conversion rights or redemption or sinking
fund provisions with respect to the shares. All of the outstanding Common Stock
is, and the shares offered by Moranzo pursuant to this offering will be, when
issued and delivered, fully paid and non-assessable.
INTEREST OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or certified
any part of this prospectus or having given an opinion upon the validity of the
securities being registered or upon other legal matters in connection with the
registration or offering of the common stock was employed on a contingency
basis, or had, or is to receive, in connection with the offering, a substantial
interest, direct or indirect, in the registrant. Nor was any person connected
with the registrant as a promoter, managing or principal underwriter, voting
trustee, director, officer or employee.
Jennifer Pulver, our independent counsel, has provided an opinion on the
validity of our common stock.
DISCLOSURE OF COMMISSION POSITION FOR SECURITIES ACT LIABILITIES
Moranzo's By-Laws allow for the indemnification of Company Officers and
Directors in regard to their carrying out the duties of their offices. We have
been advised that in the opinion of the Securities and Exchange Commission
indemnification for liabilities arising under the Securities Act is against
public policy as expressed in the Securities Act, and is, therefore
unenforceable. In the event that a claim for indemnification against these
liabilities is asserted by one of our directors, officers, or other controlling
persons in connection with the securities registered, we will, unless in the
opinion of our legal counsel the matter has been settled by controlling
precedent, submit the question of whether this indemnification is against public
policy to a court of appropriate jurisdiction. We will then be governed by the
court's decision.
ORGANIZATION WITHIN LAST FIVE YEARS
Moranzo was incorporated in Delaware on May 31, 1994. In May of 1998 the board
of directors voted to seek capital and began development of Moranzo's business
plan. During June 1998, Moranzo received its initial funding through the sale of
common stock to investors.
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DESCRIPTION OF BUSINESS
Form And Year Of Organization
Moranzo, Inc. was incorporated in Delaware on May 31, 1994. From inception until
the date of this filing, we had no material operating activities.
Any Bankruptcy, Receivership, Or Similar Proceeding
There have been no bankruptcy, receivership or similar proceedings.
Any Material Reclassification, Merger, Consolidation, Or Purchase Or Sale Of A
Significant Amount Of Assets Not In The Ordinary Course Of Business
There have been no material reclassifications, mergers, consolidations, or
purchase or sale of a significant amount of assets not in the ordinary course of
business.
Principal Products Or Services And Their Markets
Moranzo's primary business plan objective is to offer guests the most up-scale
authentic Italian dining experience available outside Italy. Management plans to
offer a menu that features a wide variety of authentic Italian foods, fresh
ingredients, and an extensive list of imported wines from Italy. Our two year
business plan involves the following steps: during months one through six raise
capital of $7,500,000 through the sale of common stock in a private placement;
during months seven through twelve budget $2,870,000 for its first restaurant in
La Jolla, California to include $1,200,000 for construction costs, $350,000 for
pre-opening costs, and monthly operating expenses of $220,000, which includes
$13,000 for two full-time chefs, $35,000 for service and support personnel,
$49,000 for food and alcohol costs, $9,000 for advertising and promotional
expenses, and $20,000 for rent.
After securing funding and building our first restaurant, we plan to emphasize
the following key elements :
Offer Premium Quality, Authentic Regional Italian Cuisine. Moranzo will
seek to differentiate its planned restaurants from other restaurants in
the Italian food segment by offering creatively prepared, premium
quality Italian cuisine that will be based on authentic regional recipes
and prepared by Italian trained chefs. The core menu served at both
lunch and dinner would feature a variety of dishes from the Tuscany
region, including house- made pasta, poultry and game roasted over a
wood-fired rotisserie, meat and fresh fish from a charcoal grill, soups
and salads. Italian appetizers (antipasti) and desserts prepared
on-site, full liquor service and an extensive wine list emphasizing
imported Italian varietals will be offered. Hand-made breads and rolls,
baked daily and based on original Italian recipes, would be served with
olive oil. The planned menu would also include several low-salt, low-fat
selections for health or diet-conscious guests. From medieval times to
today, Tuscan cuisine has been tied to the agriculture of the area: the
olive tree, the vineyard, vegetables from peas to leeks, variations of
colors from the green of kale to
14
<PAGE> 15
the white of the cannelloni bean, to the dark brown of the chestnut
flour. All of these things are in perfect harmony with the land that
produces them, and Tuscan chefs have carefully preserved the antique
recipes, based directly on the local resources. Tuscan cuisine is known
for its simplicity and use of only the finest ingredients. Moranzo plans
for it's chefs to also develop specialty menu items each month based on
the local cuisine and culinary style of one of Italy's other geographic
regions as part of Moranzo's marketing program. Each specialty menu will
be intended to capture both the unique flavors and culinary style that
characterize that region's local cuisine and will include items based on
produce, cheese, meat, poultry and seafood indigenous to the region.
Selected wines of the region will be offered to complement the menu
items.
Create a Distinctive Authentic Italian Atmosphere. Moranzo hopes to
create a distinctive authentic Italian atmosphere with restaurant
designs unique to each location. The proposed sophisticated, yet
intimate and friendly atmosphere would be suitable for all meal
occasions. Exhibition kitchens with wood-fired rotisseries, charcoal
grills and ovens in full display of the guests are planned to create
appealing cooking aromas to reinforce the perception of quality,
freshness and authenticity. Design elements, which may include European
slate floors, marble bars, mahogany trim, outdoor piazzas, hand-painted
ceilings and fine art, would be selected to evoke the charm and elegance
of a memorable dining experience in Italy. The tables will be a mix of
booths and free-standing tables and chairs, dressed with white
tablecloths and Italian flatware. In addition to dining room service, we
plan to make food available at the liquor/espresso bar, and where
location and weather permit at outdoor "sidewalk" tables.
Focus on Service. Management plans an emphasis on service that will be
an important factor in the company's success. We plan to invest
significant resources in the training of our service personnel and each
restaurant will be staffed with an experienced management team to ensure
attentive guest service, consistent high standard of food quality and
impeccable cleanliness. Service is intended to be professional and
friendly yet not intrusive. Through employee and guest questionnaires,
we will request valuable feedback and implement measures designed to
reinforce our commitment to outstanding service and guest satisfaction.
Provide a Superior Work Environment. Moranzo believes that qualified,
knowledgeable employees are critical to its success. By providing
extensive training, attractive compensation and significant
opportunities for employee feedback and advancement, we will seek to
foster a strong corporate culture that will help attract and retain
highly qualified employees.
Distribution Methods Of Products Or Services
Moranzo believes that providing an authentic Italian dining experience by
offering quality food, wine and bakery products, distinctive decor, enthusiastic
service and an attractive price-value relationship will be the most effective
approach to attracting new and repeat guests. Accordingly, we hope to rely on
reputation, local reviews and awards and word-of-mouth to promote our planned
restaurants in each community in which we plan to operate. We also hope to
implement a program of marketing and public relations activities designed to
create market awareness. To encourage repeat patronage, we plan to develop a
program of specialty menu items which would
15
<PAGE> 16
rotate monthly, based on authentic recipes from one of Italy's geographic
regions. Menu items would be accompanied by selected wines from the region and a
regional bread would be provided by the restaurant's bakery. Mailers describing
each month's offering would be sent monthly to businesses and households in
geographic proximity to the restaurant. Other marketing concepts that may be
pursued include both on-site and off-site activities, like large party, special
event and meeting catering, bread and baked goods classes, food and wine
tasting, chef demonstrations, and programs designed to encourage concierges from
local hotels and office buildings to recommend Moranzo's proposed restaurants to
their clients. Other public awareness activities may include participation in
community activities, fund-raisers for schools, hospitals and other non-profit
organizations.
Management considers location to be a critical factor in determining a
restaurant's long-term success, we plan devote significant effort to the site
selection process. Moranzo's site selection strategy would be to locate
restaurants in affluent urban and suburban areas, located near or on main
traffic routes. We would take into account a variety of local factors, including
demand and consumer preferences, competition, availability of suitable locations
and personnel, local demographics and household income levels, as well as
specific site characteristics, such as visibility, accessibility, traffic volume
and proximity to activity centers such as shopping areas, hotels, offices and
universities. Once an appropriate site has been identified, we would determine
the most beneficial lease option available. Traditionally, leases for new
upscale restaurants are structured in one of two ways: The Turn-Key Deal,
wherein the landlord is in charge of construction and can finance the
development of the building utilizing the tenant's plans. There would usually be
a maximum on the landlord's share of construction costs and the minimum rent
would be based on the cost of construction plus some stipulated amount for land
value. The second option is the Construction Allowance Deal wherein the tenant
would control the construction and negotiate a construction allowance from the
landlord. The allowance is payable in progress payments as the project is
completed. In addition to the construction cost/land value base rent, an
additional rent amount is paid as a percent of gross business, typically a range
of 4% to 7% of sales. Lessee's are typically responsible for a percentage of the
property taxes on the restaurant structure.
Status Of Any Publicly Announced New Product Or Service
Moranzo has no new product or service planned or announced to the public.
Competitive Business Conditions And The Small Business Issuer's Competitive
Position In The Industry And Methods Of Competition
Moranzo does not have any current restaurant operations. The restaurant industry
is intensely competitive. There are many different segments within the
restaurant industry that are distinguished by types of service, food types and
price/value relationships. We plan to position our proposed restaurants in the
high-quality Italian food segment of the industry. In this segment the direct
competitors include both national chains and numerous privately operated local
restaurants. Competition in this segment is based primarily upon food quality,
price, restaurant ambiance, service and location. While Moranzo believes that
its proposed restaurants would be distinctive in design and operating concept,
other companies may have or develop restaurants that operate with similar
concepts. The restaurant business is often affected by changes in consumer
tastes,
16
<PAGE> 17
national, regional or local economic conditions, demographic trends, consumer
confidence in the economy, discretionary spending priorities, weather
conditions, tourist travel, traffic patterns, and the type, number and location
of competing restaurants. Although Moranzo believes it can compete favorably
with respect to each of these factors, many of its direct and indirect
competitors are well-established and have substantially greater financial,
marketing, personnel and other resources. Management is not aware of any
significant barriers to Moranzo's entry into the restaurant market, however,
Moranzo at this time has no market share of this market.
Sources And Availability Of Raw Materials And The Names Of Principal Suppliers
Management will rely on their combined experience and knowledge in the
restaurant business to arrange for the procurement of its food and supplies. To
ensure freshness and quality, maintain low inventory levels and facilitate the
unique preparation of menu items, Moranzo plans to purchase most of its
ingredients in an unprocessed state. In order to maximize operating efficiencies
and to provide the freshest ingredients for its food products, the management
team of each restaurant would determine the daily quantities of food items
needed and order accordingly. Moranzo's ability to ensure a consistent supply of
high-quality food and supplies at competitive prices depends upon identifying
and maintaining relationships with reliable vendors. We plan to utilize multiple
vendors, competitive bids, long-term contracts and long-term vendor
relationships to ensure availability of products and stability of costs.
International contacts maintained by management will facilitate the importation
of wines and other Italian commodities at favorable cost and exchange rates.
Moranzo hopes to enter into agreements with vendors per its business plan after
raising capital during the first six months of its business plan.
Management Information Systems
Moranzo plans to use existing, off-the-shelf integrated management information
systems in all of its restaurants. These systems include a computerized
point-of-sale system which facilitates the movement of guest food and beverage
orders between the guest areas and kitchen and bar, controls cash, handles
credit card authorizations and provides management with revenue data. These
systems also include a computerized time management system to calculate the time
worked by each employee, and would allow management to gather data and schedule
labor hours and produce payroll reports. Additionally, a back-office system for
processing daily and weekly paperwork (sales, accounts payable, labor and
inventory) would be utilized to generate operating statements. These systems
will also allow management to review the mix of menu items in order to better
match guest preferences and improve profitability.
Dependence On One Or A Few Major Customers
Moranzo will not depend on any one or a few major customers. Moranzo intends to
begin its initial operations in La Jolla, California during the first year of
its business plan and expand operations into Los Angeles and San Francisco in
the second year. California is the nation's largest restaurant market with sales
60% higher than either of the next two largest states (Texas and Florida).
According to the National Restaurant Association's 2000 Industry Forecast,
consumer interest in
17
<PAGE> 18
the variety of tastes and experiences at table-service restaurants has fueled a
resurgence in the full-service restaurant industry. With full-service sales
projected to reach $128.1 billion in 2000 up 5.9% from $121 billion in 1999 -
the magnitude of the projected sales gain in the past five years is $31.7
billion or 33%, well ahead of the projected 23% increase for fast-food. In their
1999 Tableservice Operator Survey, more than 8 out of 10 restauranteurs reported
that consumers have higher expectations for both the quality and consistency of
food and service and traditional fine-dining hallmarks such as freshness of
ingredients, quality of service, ambiance and presentation are areas with
increasing customer expectations.
Restaurant industry growth has been led by states in the South and the West,
fueled by strong gains in population, employment and personal income, 18 of the
top 20 states are all located in one of those two regions. With projected
eating-place sales of $30.4 billion, California is expected to lead the nation
in sales volume in 2000. ((C) National Restaurant Association, 2000)
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements Or
Labor Contracts, Including Duration
Moranzo has no current plans for any registrations such as patents, trademarks,
copyrights, concessions, royalty agreements or labor contracts. When Moranzo has
sufficient funding, management will seek legal counsel to determine if these
registrations would be in its best interests. We may utilize a franchise
strategy in selected markets. To date, we have not yet established any criteria
to evaluate prospective franchisees.
Need For Government Approval Of Principal Products Or Services and the Effect Of
Existing Or Probable Governmental Regulations On The Business
Moranzo's restaurants would be subject to licensing and regulation by state and
local health, sanitation, safety, fire and other authorities. The development
and construction of proposed new restaurant sites would be subject to compliance
with applicable zoning, land use and environmental, traffic and other
regulations. Regulations governing the sale of alcoholic beverages require
licensing by each site (in most cases, on an annual basis) and licenses may be
revoked or suspended for cause at any time. The regulations relate to many
aspects of restaurant operation, including the minimum age of patrons and
employees, hours of operation, advertising, wholesale purchasing, inventory
control and handling, storage and dispensing of alcoholic beverages. The failure
of a restaurant to obtain or retain these licenses would adversely affect the
restaurant's operations. We may also be subject in certain states to "dram-shop"
statutes, which generally provide an injured party recourse against an
establishment that wrongfully serves alcoholic beverages to an intoxicated
person causing the injury. As appropriate, we shall seek to obtain liability
insurance against potential liability.
Moranzo would be subject to federal and state minimum wage laws and other laws
governing overtime, tip credits, working conditions, safety standards, and
hiring and employment practices. Moranzo would also be required to monitor its
facilities for compliance with the Federal Americans With Disabilities Act (ADA)
and related state statutes in order to conform to their requirements. Under the
ADA we could be required to expend funds to modify our restaurants to make them
more readily accessible to disabled persons, to better provide service to
disabled persons, or to make reasonable accommodation for the employment of
disabled persons.
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<PAGE> 19
Estimate Of The Amount Spent During Each Of The Last Two Fiscal Years On
Research And Development Activities, And If Applicable The Extent To Which The
Cost Of Such Activities Are Borne Directly By Customers
Moranzo has not expended funds for research and development costs since
inception.
Costs And Effects Of Compliance With Environmental Laws
Environmental regulations have had no materially adverse effect on Moranzo's
operations to date. We would be required to comply with environmental regulation
regarding the disposal of used cooking oil. We are familiar with several
companies (Darling International and Whistler, Inc.) that provide efficient and
ecologically sound ways to dispose of used oils. These companies typically
provide a restaurant with a stainless steel container that is installed inside
the restaurant to receive the spent oil; at pick-up time, the oil is pumped
directly into a tanker truck through an outside valve, so that kitchen
operations are not disrupted. Public interest in the protection of the
environment has increased dramatically in recent years and the trend toward more
expansive and stricter environmental legislation and regulations could continue.
To the extent that laws are enacted or other governmental action is taken that
imposes environmental protection requirements that result in increased costs,
the business and prospects of Moranzo could be adversely affected.
Number Of Total Employees And Number of Full Time Employees
Moranzo's only current employees are its two officers who will devote as much
time as the board of directors determines is necessary to manage the affairs of
the company. The officers intend to work on a full time basis when the company
raises capital per its business plan. Our business plan calls for hiring 58 new
employees during the next twelve months.
Reports To Security Holders
Moranzo's bylaws do not require us to deliver an annual report to its
shareholders, and we have not provided an annual report to our shareholders in
the past. We are voluntarily filing this Form SB-2 in order to make our
financial information equally available to any interested parties or investors.
We will be subject to the disclosure rules of Regulation S-B for a small
business issuer under the Securities Act of 1933 and the Securities Exchange Act
of 1934. Moranzo anticipates it will become subject to disclosure filing
requirements effective sixty days after the date the Securities and Exchange
Commission accepts its original Form SB-2 filing, and, after that date, will be
required to file Form 10-KSB annually and Form 10-QSB quarterly. In addition, we
will be required to file Form 8 and other proxy and information statements from
time to time as required.
The public may read and copy any materials we file with the Securities and
Exchange Commission, ("SEC"), at the SEC's Public Reference Room at 450 Fifth
Street, N. W., Washington D. C. 20549. The public may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The
SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy
and information statements, and other information regarding issuers that file
electronically with SEC.
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<PAGE> 20
PLAN OF OPERATION
Our current cash balance is $5,900. Management believes the current cash balance
is sufficient to fund the current minimum level of operations through March
2001, however, in order to advance our business plan we must raise capital
through the sale of equity securities. To date, we have sold $5,900 in equity
securities. Sales of our equity securities have allowed us to maintain a
positive cash flow balance.
Moranzo's two year business plan encompasses the following steps to implement
its goals: during months one through six raise capital of $7,500,000 through the
sale of common stock in a private placement; during months seven through twelve
budget $2,870,000 for its first restaurant to include $1,200,000 for
construction costs, $350,000 for pre-opening costs, and monthly operating
expenses of $220,000, which includes $13,000 for two full-time chefs, $35,000
for service and support personnel, $49,000 for food and alcohol costs, $9,000
for advertising and promotional expenses, and $20,000 for rent.
We will only be able to advance our business plan after we receive capital
funding through the sale of equity securities in a private placement. We believe
our proposed private placement will be more acceptable to investors if our
common stock is trading on a stock exchange, however, there is no assurance that
investors share in that belief. In order to allow public trading of our
securities, we plan to file for trading on the OTC Electronic Bulletin Board
which is sponsored by the National Association of Securities Dealers, the NASD.
After raising capital, we intend to hire employees, lease restaurant space in La
Jolla, California, build-out the site including the purchase of equipment and
furnishings, and begin development of our operations. We intend to use the
equity capital to fund Moranzo's business plan during the first twelve months as
cash flow from sales is not estimated to begin until year two of the business
plan. We will face considerable risk in each of our business plan steps,
difficulty in hiring competent personnel within our budget, difficulty in
securing a suitable restaurant location, and a shortfall of funding due to our
inability to raise capital in the equity securities market.
Our current business plan provides for funding solely through private placement
investment. We have determined through our experience in business that alternate
sources of business funding include venture capital investment, personal loans
from management, and institutional loans. In the event the we are not successful
in obtaining funding through a private placement, we believe the best
alternative to advance the company's business plan is for management to loan
funds to the company sufficient to maintain a minimum operating level and delay
the business plan steps until such time as private placement investment becomes
available. Moranzo's officers and directors have not, as of the date of this
filing loaned any funds to the company. There are no formal commitments or
arrangements to advance or loan funds to the company or repay any such advances
or loans. At this time, we believe institutional loans are unavailable to us due
to our development stage nature, and venture capital investment is not
beneficial to the existing shareholders due to the fifty percent or greater
amount of ownership normally required for venture capital funding. Without
necessary cash flow, Moranzo may be dormant during the next twelve months, or
until a time as necessary funds could be raised in the equity securities market.
There are no current plans for additional product research and development.
Moranzo plans to purchase approximately $255,000 in equipment, furnishings,
computers, and software during the next twelve months from proceeds of its
equity security sales. Our business plan provides for an increase of 58
employees during the next twelve months.
20
<PAGE> 21
DESCRIPTION OF PROPERTY
Moranzo's principal executive office address is 566 Port Harwick, Chula Vista,
CA 91913. The principal executive office and telephone number are provided by an
officer of the corporation. The costs associated with the use of the telephone
and mailing address were deemed by management to be immaterial as the telephone
and mailing address were almost exclusively used by the officer for other
business purposes. We consider our current principal office space arrangement
adequate until we are able to achieve our business plan goal of raising capital
of $7,500,000 and then begin hiring new employees per our business plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The principal executive office and telephone number are provided by Mr.
Bernardoni, an officer of the corporation. The costs associated with the use of
the telephone and mailing address were deemed by management to be immaterial as
the telephone and mailing address were almost exclusively used by the officer
for other business purposes.
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS
Moranzo plans to file for trading on the OTC Electronic Bulletin Board which is
sponsored by the National Association of Securities Dealers (NASD). The OTC
Electronic Bulletin Board is a network of security dealers who buy and sell
stock. The dealers are connected by a computer network which provides
information on current "bids", "asks" and volume.
As of the date of this filing, there is no public market for our securities. As
of September 30, 2000, Moranzo had 50 shareholders of record. We have paid no
cash dividends and have no outstanding options.
EXECUTIVE COMPENSATION
Moranzo's current officers receive no compensation.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Other
Name & annual Restricted Options All other
principle Salary Bonus compen- stock SARs LTIP compen-
position Year ($) ($) sation ($) awards ($) ($) Payouts sation ($)
-------- ---- ------ ----- ---------- ---------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
C Giovannini 1998 -0- -0- -0- 2,900 -0- -0- -0-
President 1999 -0- -0- -0- -0- -0- -0- -0-
2000 -0- -0- -0- -0- -0- -0- -0-
R Bernardoni 1998 -0- -0- -0- 2,900 -0- -0- -0-
Sec. - Tres 1999 -0- -0- -0- -0- -0- -0- -0-
2000 -0- -0- -0- -0- -0- -0- -0-
</TABLE>
21
<PAGE> 22
There are no current employment agreements between Moranzo and its executive
officers.
The Board agreed to pay Mr. Giovannini, for administrative services, 1,000
shares of Moranzo's common stock on May 31, 1994, and 29,000 shares on March 15,
1998. The stock was valued at the price unaffiliated investors paid for stock
sold by Moranzo, $.10 per share. On March 15, 2000, 2,370,000 shares of
Moranzo's common stock were issued to him per an 80 for 1 stock split.
The Board agreed to pay Mr. Bernardoni, for administrative services, 1,000
shares of Moranzo's common stock on May 31, 1994, and 29,000 shares on March 15,
1998. The stock was valued at the price unaffiliated investors paid for stock
sold by Moranzo, $.10 per share. On March 15, 2000, 2,370,000 shares of
Moranzo's common stock were issued to him per an 80 for 1 stock split.
The terms of these stock issuances were as fair to Moranzo, in the Board's
opinion, as could have been made with an unaffiliated third party.
The officers currently devote an immaterial amount of time to manage the affairs
of Moranzo. The Directors and Principal Officers have agreed to work with no
remuneration until we receive sufficient revenues necessary to provide proper
salaries to all Officers and compensation for Directors' participation. The
Officers and the Board of Directors have the responsibility to determine the
timing of remuneration for key personnel based upon such factors as positive
cash flow to include stock sales, restaurant sales, estimated cash expenditures,
accounts receivable, accounts payable, notes payable, and a cash balance of not
less than $25,000 at each month end. When positive cash flow reaches $25,000 at
each month end and appears sustainable the board of directors will readdress
compensation for key personnel and enact a plan at that time which will that
benefits Moranzo as a whole. At this time, we cannot accurately estimate when
sufficient revenues will occur to implement this compensation, or the exact
amount of compensation.
There are no annuity, pension or retirement benefits proposed to be paid to
officers, directors or employees of the Corporation in the event of retirement
at normal retirement date pursuant to any presently existing plan provided or
contributed to by the Corporation or any of its subsidiaries, if any.
FINANCIAL STATEMENTS
The audited financial statements of Moranzo for the years ended March 31, 2000
and 1999, and the period ended August 31, 2000 and related notes which are
included in this offering have been examined by Barry L. Friedman, PC, and have
been so included in reliance upon the opinion of these accountants given upon
their authority as an expert in auditing and accounting.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING CONTROL
AND FINANCIAL DISCLOSURE
None.
22
<PAGE> 23
MORANZO, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
August 31, 2000
March 31, 2000
March 31, 1999
<PAGE> 24
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE #
------
<S> <C>
INDEPENDENT AUDITORS REPORT F1
ASSETS F2
LIABILITIES AND STOCKHOLDERS' EQUITY F3
STATEMENT OF OPERATIONS F4
STATEMENT OF STOCKHOLDERS' EQUITY F5
STATEMENT OF CASH FLOWS F6
NOTES TO FINANCIAL STATEMENTS F7-F11
</TABLE>
<PAGE> 25
[BARRY L. FRIEDMAN, P.C. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
Board of Directors September 1, 2000
Moranzo, Inc.
Chula Vista, California
I have audited the accompanying Balance Sheets of Moranzo, Inc. (A
Development Stage Company), as of August 31, 2000, March 31, 2000, and March 31,
1999, and the related statements of operations, stockholders' equity and cash
flows for the period April 1, 2000, to August 31, 2000, and the two years ended
March 31, 2000, and March 31, 1999. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Moranzo, Inc. (A
Development Stage Company), as of August 31, 2000, March 31, 2000, and March 31,
1999, and the related statements of operation, stockholders' equity and cash
flows for the period April 1, 2000, to August 31, 2000, and the two years ended
March 31, 2000, and March 31, 1999, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note #5 to the
financial statements, the Company has had no operations and has no established
source of revenue. This raises substantial doubt about its ability to continue
as a going concern. Management's plan in regard to these matters is described in
Note #5. These financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ Barry L. Friedman
-----------------------------------
Barry L. Friedman
Certified Public Accountant
1582 Tulita Drive
Las Vegas, NV 89123
(702)361-8414
<PAGE> 26
Moranzo, Inc.
(A Development Stage Company)
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
August March March
31, 2000 31, 2000 31, 1999
------ ------ ------
<S> <C> <C> <C>
CURRENT ASSETS
CASH $5,900 $5,900 $5,900
------ ------ ------
TOTAL CURRENT ASSETS $5,900 $5,900 $5,900
------ ------ ------
OTHER ASSETS $ 0 $ 0 $ 0
------ ------ ------
TOTAL OTHER ASSETS $ 0 $ 0 $ 0
------ ------ ------
TOTAL ASSETS $5,900 $5,900 $5,900
------ ------ ------
</TABLE>
The accompanying notes are an integral part of these financial statements
- F2 -
<PAGE> 27
Moranzo, Inc.
(A Development Stage Company)
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
August March March
31, 2000 31, 2000 31, 1999
------ ------ ------
<S> <C> <C> <C>
CURRENT LIABILITIES $ 0 $ 0 $ 0
------ ------ ------
TOTAL CURRENT LIABILITIES $ 0 $ 0 $ 0
------ ------ ------
STOCKHOLDERS' EQUITY (Note #4)
Common stock
Par value $0.001
Authorized 50,000,000 shares
Issued and outstanding at
March 31, 1999 -
9,520,000 shares $9,520
March 31, 2000 -
9,520,000 shares $9,520
August 31, 2000 -
9,520,000 shares $9,520
Additional Paid-In Capital +2,380 +2,380 +2,380
Deficit accumulated during
The Development stage -6,000 -6,000 -6,000
TOTAL STOCKHOLDERS' EQUITY $5,900 $5,900 $5,900
------ ------ ------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $5,900 $5,900 $5,900
------ ------ ------
</TABLE>
The accompanying notes are an integral part of these financial statements
- F3 -
<PAGE> 28
Moranzo, Inc.
(A Development Stage Company)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
April 1, Year Year May 31,1994
2000, to Ended Ended (Inception)
Aug. 31, Mar. 31, Mar. 31, to Aug. 31,
2000 2000 1999 2000
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
INCOME
Revenue $ 0 $ 0 $ 0 $ 0
---------- ---------- ---------- ----------
EXPENSES
General, Selling and
Administrative $ 0 $ 0 $ 0 $ 6,000
---------- ---------- ---------- ----------
TOTAL EXPENSES $ 0 $ 0 $ 0 $ 6,000
---------- ---------- ---------- ----------
NET PROFIT/LOSS (-) $ 0 $ 0 $ 0 $ -6,000
---------- ---------- ---------- ----------
Net loss per share -
Basic and diluted
(Note #2) $ NIL $ NIL $ NIL $ NIL
---------- ---------- ---------- ----------
Weighted average
Number of common
shares outstanding 9,520,000 9,520,000 9,520,000 9,520,000
---------- ---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements
- F4 -
<PAGE> 29
Moranzo, Inc.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Additional Accumu-
Common Stock paid-in lated
Shares Amount Capital Deficit
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
May 31, 1994
Issued For Services 160,000 $ 160 $ 40 $ -200
March 15, 1998
Issued For Services 4,640,000 4,640 1,160 -5,800
--------- --------- --------- ---------
Balance,
March 31, 1998 4,800,000 $ 4,800 $ 1,200 $ -6,000
June 30, 1998
Issued For Cash 4,720,000 4,720 1,180
Net loss year ended
March 31, 1999 0
--------- --------- --------- ---------
Balance,
March 31, 1999 9,520,000 $ 9,520 $ 2,380 $ -6,000
Net loss year ended
March 31, 2000 0
--------- --------- --------- ---------
Balance,
March 31, 2000 9,520,000 $ 9,520 $ 2,380 $ -6,000
Net loss year ended
April 1, 2000 to
August 31, 2000 0
--------- --------- --------- ---------
Balance,
August 31, 2000 9,520,000 $ 9,520 $ 2,380 $ -6,000
--------- --------- --------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements
- F5 -
<PAGE> 30
Moranzo, Inc.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
April 1, Year Year May 31, 1994
2000, to Ended Ended (Inception)
Aug. 31, Mar. 31, Mar. 31, to Aug. 31,
2000 2000 1999 2000
------ ------ ------ -------
<S> <C> <C> <C> <C>
Cash Flows from
Operating Activities
Net Loss $ 0 $ 0 $ 0 $-6,000
Adjustment to
Reconcile net loss
To net cash provided
by operating
Activities
Issue Common Stock
For Services 0 0 0 +6,000
Changes in assets and
Liabilities 0 0 0 0
------ ------ ------ -------
Net cash used in
Operating activities $ 0 $ 0 $ 0 $ 0
Cash Flows from
Investing Activities 0 0 0 0
Cash Flows from
Financing Activities
Issuance of Common
Stock for Cash 0 0 5,900 +5,900
------ ------ ------ -------
Net Increase (decrease) $ 0 $ 0 $5,900 $+5,900
Cash,
Beginning of period 5,900 5,900 0 0
------ ------ ------ -------
Cash,
End of Period $5,900 $5,900 $5,900 $ 5,900
------ ------ ------ -------
</TABLE>
The accompanying notes are an integral part of these financial statements
- F6 -
<PAGE> 31
Moranzo, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2000, March 31, 2000, and March 31, 1999
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized May 31, 1994, under the laws of the State of
Delaware as Moranzo, Inc. The Company currently has no operations and in
accordance with SFAS #7, is considered a development company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Cash and equivalents
The Company maintains a cash balance in a non-interest-bearing
bank that currently does not exceed federally insured limits.
For the purpose of the statements of cash flows, all highly
liquid investments with the maturity of three months or less are
considered to be cash equivalents. There are no cash equivalents
as of August 31, 2000.
- F7 -
<PAGE> 32
Moranzo, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
August 31, 2000, March 31, 2000, and March 31, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS #109) "Accounting for Income Taxes". A
deferred tax asset or liability is recorded for all temporary
difference between financial and tax reporting. Deferred tax
expense (benefit) results from the net change during the year of
deferred tax assets and liabilities.
Reporting on Costs of Start-Up Activities
Statement of Position 98-5 ("SOP 98-5"), "Reporting on the Costs
of Start-Up Activities" which provides guidance on the financial
reporting of start-up costs and organization costs. It requires
most costs of start-up activities and organization costs to be
expensed as incurred. SOP 98-5 is effective for fiscal years
beginning after December 15, 1998. With the adoption of SOP
98-5, there has been little or no effect on the company's
financial statements.
Loss Per Share
Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS #128) "Earnings Per
Share". Basic loss per share is computed by dividing losses
available to common stockholders by the weighted average number
of common shares outstanding during the period. Diluted loss per
share reflects per share amounts that would have resulted if
dilative common stock equivalents had been converted to common
stock. As of August 31, 2000, the Company had no dilative common
stock equivalents such as stock options.
- F8 -
<PAGE> 33
Moranzo, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
August 31, 2000, March 31, 2000, and March 31, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Year End
The Company has selected March 31st as its fiscal year-end.
Policy In regards to Issuance of Common Stock in a Non-Cash Transaction
The company's accounting policy for issuing shares in a non-cash
transaction is to issue the equivalent amount of stock equal to the fair
market value of the assets or services received.
Year 2000 Disclosure
The Y2k issue had no effect on this Company.
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended August 31,
2000. The Company's total deferred tax asset as of March 31, 2000, is as
follows:
<TABLE>
<S> <C>
Net operation loss carry forward $6,000
Valuation allowance $6,000
Net deferred tax asset $ 0
</TABLE>
The federal net operating loss carry forward will expire before 2019.
This carry forward may be limited upon the consummation of a business
combination under IRC Section 381.
- F9 -
<PAGE> 34
Moranzo, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
August 31, 2000, March 31, 2000, and March 31, 1999
NOTE 4 - STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of the corporation consists of 50,000,000
shares with a par value $0.001 per share.
Preferred Stock
Moranzo, Inc. has no preferred stock.
On May 31, 1994, the Company issued 2,000 shares of its $.00001 par
value common stock in consideration of $0.10 per share ($200.00) to its
directors, for services.
On March 15, 1998, the Company issued 58,000 shares of its $0.00001 par
value common stock in consideration of $0.10 per-share ($5,800.00) to
its directors, for services.
On June 30, 1998, the Company issued 59,000 shares of its $0.00001 par
value common stock for cash of $5,900.
On March 15, 2000, the Company approved a forward stock split on the
basis of 80 for 1, thus increasing the common stock from 119,000 shares
9,520,000 shares.
On June 19, 2000, the State of Delaware approved the Company's restated
Articles of Incorporation, which changed the par value from $0.00001 to
$0.001 and increased the authorized common shares from 20,000,000 common
shares to 50,000,000 common shares.
NOTE 5 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern, which contemplates
the realization of assets and liquidation of liabilities in the normal
course of business. However, the Company does not have significant cash
or other material assets, nor does it have an established source of
revenues sufficient to cover its operating costs and to allow it to
continue as a going concern. The stockholders/officers and/or directors
have informally committed to advancing the operating costs of the
Company interest free, if necessary.
- F10 -
<PAGE> 35
Moranzo, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
August 31, 2000, March 31, 2000, and March 31, 1999
NOTE 6 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
shares of common stock.
NOTE 7 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. An
officer of the corporation provides office services without charge. Such
costs are immaterial to the financial statements and accordingly, have
not been reflected therein. The officers and directors of the Company
are involved in other business activities and may in the future, become
involved in other business opportunities. If a specific business
opportunity becomes available, such persons may face a conflict in
selecting between the Company and their other business interests. The
Company has not formulated a policy for the resolution of such
conflicts.
- F11 -
<PAGE> 36
PART II
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Moranzo's By-Laws allow for the indemnification of Company Officers and
Directors in regard to their carrying out the duties of their offices. The Board
of Directors will make determination regarding the indemnification of the
director, officer or employee as is proper under the circumstances if he/she has
met the applicable standard of conduct set forth in subsections (a) and (b) of
Section 145 of the Delaware General Corporation Law.
As to indemnification for liabilities arising under the Securities Act of 1933
for directors, officers or persons controlling Moranzo, we have been informed
that in the opinion of the Securities and Exchange Commission this
indemnification is against public policy and unenforceable. See section entitled
"Disclosure of Commission Position on Indemnification for Securities Act
Liabilities".
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs of the offering are denoted below. Please note all amounts
are estimates other than the Commission's registration fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee $ 125
Accounting fees and expenses $2000
Legal fees $ 500
Total $2625
</TABLE>
Moranzo will pay all expenses of the offering listed above. No portion of these
expenses will be borne by the selling shareholders.
RECENT SALES OF UNREGISTERED SECURITIES
On May 31, 1994, the shareholders authorized the issuance of 1,000 shares of
common stock for services to each of the officers and directors of Moranzo for a
total of 2,000 shares valued at $200. The stock was arbitrarily valued by the
shareholders for estimated costs of minor administrative services performed by
the officers in the formation of Moranzo. On March 15, 1998, the shareholders
authorized the issuance of 29,000 shares of common stock for services related to
the creation of Moranzo's business plan to each of the officers of Moranzo for a
total of 58,000 shares valued at $5,800. The stock was valued at the price
unaffiliated investors would have paid for stock sold by Moranzo, $.10 per
share. The terms of these stock issuances were as fair to Moranzo, in the
Board's opinion, as could have been made with an unaffiliated third party.
Moranzo relied upon Section 4(2) of Securities Act of 1933, as amended (the
"Act"). The shares were issued in satisfaction of management services rendered
by officers and directors, which does not constitute a public offering.
From the period of approximately June 1, 1998 until June 30, 1998, Moranzo
offered and sold 59,000 shares at $0.10 per share to 48 non-affiliated private
investors. We relied upon Section 4(2) of the Securities Act of 1933, as amended
(the "Act"). Each prospective investor was given a
23
<PAGE> 37
private placement memorandum designed to disclose all material aspects of an
investment in Moranzo, including the business, management, offering details,
risk factors and financial statements. Each investor also completed a
subscription confirmation letter and private placement subscription agreement
whereby the investors certified that they were purchasing the shares for their
own accounts, with investment intent and that each investor was either
"accredited", or was a "sophisticated" purchaser, having prior investment
experience or education, and having adequate and reasonable opportunity to
access and review any corporate information necessary to make an informed
investment decision. These investors were known or familiar to the Officers and
Directors of Moranzo. This offering was not accompanied by general advertisement
or general solicitation and the shares were issued with a Rule 144 restrictive
legend. The funds received were specifically allocated to operating expenses.
Under the Securities Act of 1933, all sales of an issuers' securities or by a
shareholder, must either be made (i) pursuant to an effective registration
statement filed with the SEC, or (ii) pursuant to an exemption from the
registration requirements under the 1933 Act.
Rule 144 under the 1933 Act sets forth conditions which if satisfied, permit
persons holding control securities (affiliated shareholders, i.e., officers,
directors or holders of at least ten percent of the outstanding shares) or
restricted securities (non-affiliated shareholders) to sell these securities
publicly without registration. Rule 144 sets forth a holding period for
restricted securities to establish that the holder did not purchase these
securities with a view to distribute. Under Rule 144, several provisions must be
met with respect to the sales of control securities at any time and sales of
restricted securities held between one and two years. The following is a summary
of the provisions of Rule 144: (a) Rule 144 is available only if the issuer is
current in its filings under the Securities an Exchange Act of 1934. These
filings include, but are not limited to, the issuer's quarterly reports and
annual reports; (b) Rule 144 allows resale of restricted and control securities
after a one year hold period, subjected to certain volume limitations, and
resales by non-affiliates holders without limitations after two years; (c) The
sales of securities made under Rule 144 during any three-month period are
limited to the greater of: (i) 1% of the outstanding common stock of the issuer;
or (ii) the average weekly reported trading volume in the outstanding common
stock reported on all securities exchanges during the four calendar weeks
preceding the filing of the required notice of the sale under Rule 144 with the
SEC.
On March 15, 2000, the Board of Directors authorized a forward stock split of 80
for 1 resulting in a total of 9,520,000 shares of common stock issued and
outstanding.
EXHIBITS
<TABLE>
<S> <C> <C>
Exhibit 1 Underwriting Agreement None
Exhibit 2 Plan of acquisition, reorganization or liquidation None
Exhibit 3(i) Articles of Incorporation Included
Exhibit 3(ii) Bylaws Included
Exhibit 4 Instruments defining the rights of holders None
Exhibit 5 Opinion re: Legality Included
Exhibit 8 Opinion re: Tax Matters None
Exhibit 9 Voting Trust Agreement None
Exhibit 10 Material Contracts None
</TABLE>
24
<PAGE> 38
<TABLE>
<S> <C> <C>
Exhibit 11 Statement re: computation of per share earnings See Financial Stmts.
Exhibit 13 Annual or Quarterly Reports None
Exhibit 15 Letter on unaudited interim financial information None
Exhibit 16 Letter on change of certifying accountant None
Exhibit 21 Subsidiaries of the registrant None
Exhibit 23 Consent of experts and counsel Included
Exhibit 24 Power of Attorney None
Exhibit 25 Statement of eligibility of trustee None
Exhibit 26 Invitations for competitive bids None
Exhibit 27 Financial Data Schedule Included
</TABLE>
UNDERTAKINGS
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers of sales are being made, a
post-effective amendment to this registration statement to:
1. Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
2. Reflect in the prospectus any facts or events arising after the
effective date of this registration statement, or most recent
post-effective amendment, which, individually or in the
aggregate, represent a fundamental change in the information set
forth in this registration statement; and
3. Include any material information with respect to the plan of
distribution not previously disclosed in this registration
statement or any material change to that information in the
registration statement.
2. That, for the purpose of determining any liability under the Securities
Act, each post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and
that the offering of those securities at that time shall be deemed to be
the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any
of the securities being registered hereby which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to our directors, officers and controlling persons pursuant to the
provisions above, or otherwise, we have been advised that in the opinion of the
Securities and Exchange Commission that indemnification is against public policy
as expressed in the Securities Act, and is, therefore, unenforceable. In the
event that a claim for indemnification against those liabilities is asserted by
one of our directors, officers, or other controlling persons in connection with
the securities registered, we will, unless in the opinion of our legal counsel
the matter has been settled by controlling precedent, submit the question of
whether that indemnification is against public policy to a court of appropriate
jurisdiction. We will then be governed by the final adjudication of that issue.
25
<PAGE> 39
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe it meets all of
the requirements for filing Form SB-2 and authorized this registration statement
to be signed on its behalf by the undersigned, in the city of Chula Vista, state
of California, on December 5, 2000.
Moranzo, Inc.
By /s/ Carlo Giovannini
-----------------------------------
Carlo Giovannini, President & Director
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
dates stated.
/s/ Carlo Giovannini , President & Director 12/5/00
----------------------------------- -------------
Carlo Giovannini Date
/s/ Roberto Bernardoni , Secretary, Treasurer 12/5/00
----------------------------------- -------------
Roberto Bernardoni, & Director Date
26
