U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For Fiscal Year Ended: December 31, 1995
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 33-20111
Eat at Joe's Ltd.
(Name of small business issuer in its charter)
(Formerly Morning Star Industries, Inc.)
(Formerly Conceptualistics, Inc.)
Delaware 75-2636283
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
P.O. Box 500, Yonkers, New York 10704
(Address of principal executive offices)(zip code)
Issuer's telephone number (914) 725-2700
Securities registered under Section 12(b) of the Act: NONE
Securities registered under Section 12(g) of the Act:
Common Stock Par Value $0.0001
(Title of class)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12
months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Total pages: 25
Exhibit Index Page: 11
Form 10-KSB
Check if there is no disclosure of delinquent filers pursuant
to Item 405 of Regulation S-B is not contained in this form, and no
disclosure will be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to this form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year.
$ -0-
As of November 14, 1996, there were 6,328,428 shares of the
Registrant's common stock, par value $0.0001, issued and
outstanding and 2,000,000 warrants to purchase common stock at
$1.00 per share. The aggregate market value of the Registrant's
voting stock held by non-affiliates of the Registrant was
approximately $6,328,428 computed at the average bid and asked
price as of November 14, 1996.
DOCUMENTS INCORPORATED BY REFERENCE
If the following documents are incorporated by reference,
briefly describe them and identify the part of the Form 10-KSB
(e.g., Part I, Part II, etc.) into which the document is
incorporated: (1) any annual report to security holders; (2) any
proxy or information statement; and (3) any prospectus filed
pursuant to Rule 424(b) or (c) of the Securities Act of 1933
("Securities Act"): NONE
Transitional Small Business Disclosure Format (check one):
Yes ; NO X
TABLE OF CONTENTS
Item Number and Caption Page
PART I
1. Description of Business . . . . . . . . . . . . . . . . . 4
2. Description of Property . . . . . . . . . . . . . . . . . 5
3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . 5
4. Submission of Matters to a Vote of Security Holders . . . 5
PART II
5. Market for Common Equity and Related Stockholder Matters. 6
6. Management's Discussion and Analysis or Plan of
Operations. . . . . . . . . . . . . . . . . . . . . . . . 6
7. Financial Statements. . . . . . . . . . . . . . . . . . . 8
8. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure . . . . . . . . . . . 8
PART III
9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
10. Executive Compensation. . . . . . . . . . . . . . . . . . 10
11. Security Ownership of Certain Beneficial Owners and
Management. . . . . . . . . . . . . . . . . . . . . . . . 10
12. Certain Relationships and Related Transactions. . . . . . 11
13. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . 11
PART I DESCRIPTION OF BUSINESS
General
The Company is seeking to effect a merger, exchange of capital
stock, asset acquisition or other similar business combination with
an operating business. The business objective of the Company is to
effect a business combination with a business which the Company
believes has significant growth potential. The Company intends to
utilize equity in affecting a business combination. On September
13, 1996 the Company changed its name to Eat at Joe's Ltd. and is
attempting to raise $60,000 pursuant to Regulation D under Rule
504. The Company intends to open and operate theme restaurants
styled in an "American Diner" atmosphere where families can eat
wholesome, home-cooked food in a safe friendly atmosphere. Eat at
Joe's, the classic American grill, is a restaurant concept that
takes you back to eating in the era when favorite old rockers were
playing on chrome-spangled jukeboxes and neon signs reflected on
shiny tabletops of the 1950's.
History
The company was incorporated as Conceptualistics, Inc. on
January 6, 1988 in Delaware as a wholly owned subsidiary of Halter
Venture Corporation ("HVC"), a publicly-owned corporation (now
known as Debbie Reynolds Hotel and Casino, Inc.) In 1988, HVC
divested itself of approximately 14% of its holdings in the Company
by distributing 1,777,000 shares of the issued and outstanding
stock of the Company to its shareholders. The then majority
shareholder of HVC became the majority shareholder of the Company.
Its business purpose is primarily to seek and acquire or merge
with all types of business ventures. Its authorized capital stock
is 50,000,000 shares of common stock, par value $0.0001 per share
and 10,000,000 shares of preferred stock, par value $0.0001 per
share.
During the period from September 30, 1988 to March 1, 1990,
the company remained in the development stage while attempting to
enter the mining industry. The Company acquired certain unpatented
mining claims and related equipment necessary to mine, extract,
process and otherwise explore for kaolin clay, silica, feldspar,
precious metals, antimony and other commercial minerals from its
majority stockholder and unrelated third parties. The Company was
unsuccessful in these start up efforts and all activity ceased
during 1992 as a result of foreclosure on various loans in default
and/or abandonment of all assets.
Since March 1, 1990, the Company has not engaged in any
business activities and the business purpose of the Company is to
seek out and obtain an acquisition or merger transaction whereby
its stockholders would benefit by owning an interest in a viable
enterprise. Since the Company has no operations or significant
assets, its principal potential for profits comes solely from
operations it would receive in any acquisition or merger
transaction. A merger or acquisition transaction with the Company
would allow a privately held company to become a publicly held
corporation with a broad shareholder base without experiencing the
substantial time and filing requirements and financial expenditures
imposed by federal and state securities laws.
ITEM 2. DESCRIPTION OF PROPERTY
The Company at this time has no properties.
Since 1992 all activities of the Company have been conducted
by corporate officers from either their home or business offices.
Currently, there are no outstanding debts owed by the Company for
the use of these facilities and there are no commitments for future
use of the facilities.
ITEM 3. LEGAL PROCEEDINGS
NONE
PART II
ITEM 4. SUBMISSION OF MATTERS TO A
VOTE OF SECURITY HOLDERS
NONE
ITEM 5. MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
The stock is traded over-the-counter on the Electronic
Bulletin Board with the trading symbol "JOES". To the best
knowledge of management, there was no trading of shares during the
past two years.
The number of shareholders of record of the Company's common
stock as of November 14, 1996 was 320.
The Company has not paid any cash dividends to date and does
not anticipate paying dividends in the foreseeable future. It is
the present intention of management to utilize all available funds
for the development of the Company's business.
ITEM 6. MANAGEMENT'S DISCUSSION AND
ANALYSIS OR PLAN OF OPERATIONS
Plan of Operations - Eat at Joe's Ltd. Intends to open and operate
theme restaurants styled in an "American Diner" atmosphere where
families can eat wholesome, home cooked food in a safe friendly
atmosphere. Eat at Joe's, the classic American grill, is a
restaurant concept that takes you back to eating in the era when
favorite old rockers were playing on chrome-spangled jukeboxes and
neon signs reflected on shiny tabletops of the 1950's. Eat at
Joe's fulfills the diner dream with homey ambiance that's
affordable while providing food whose quality and variety is such
you can eat there over and over, meal after meal. To build on the
diner experience, a retail section in each Eat at Joe's would allow
customers to take the good feelings home with them, in the form of
50's memorabilia.
The Company's expansion strategy is to open restaurants either
through Joint Venture agreements or Company owned units. Units may
consist of a combination of full service restaurants or food court
locations. Restaurant construction will take from 90-150 days to
complete on a leased site.
In considering site locations, the Company concentrates on
trade demographics, such as traffic volume, accessibility and
visibility. High Visibility Malls and Strip Malls in densely
populated suburbs are the preferred locations. The Company also
scrutinizes the potential competition and the profitability of
national restaurant chains in the target market area. As part of
the expansion program, the Company will inspect and approve each
site before approval of any joint venture or partnership.
A typical food court unit is approximately 500 square feet,
whereas for a full service operation it is approximately 3,500
square feet. Food court operation consists of a limited menu. A
full service restaurant consists of 30-35 tables seating about 140-
150 people. The bar area will hold 6-8 tables and seats 30-35
people.
The restaurant industry is an intensely competitive one, where
price, service, location, and food quality are critical factors.
The Company has many established competitors, ranging from similar
casual-style chains to local single unit operations. Some of these
competitors have substantially greater financial resources and may
be established or indeed become established in areas where the Eat
at Joe's Company operates. The restaurant industry may be affected
by changes in customer tastes, economic, demographic trends, and
traffic patterns. Factors such as inflation, increased supplies
costs and the availability of suitable employees may adversely
affect the restaurant industry in general and the Eat at Joe's
Company Restaurant in particular. Significant numbers of the Eat
at Joe's personnel are paid at rates related to the federal minimum
wage and accordingly, any changes in this would affect the
Company's labor costs.
Results of Operations - From March 1, 1990 to December 12, 1995
the Company was an inactive corporation. On December 12, 1995 the
Company was reactivated and since that date the Company continued
to be a development stage company and has not begun principal
operations.
Liquidity and Capital Resources - The Company intends to seek an
acquisition of a larger and potentially more profitable business.
The Company intends to focus on opportunities to acquire new
products or technologies in development as well as those currently
being operated, including a complete operating business that has
demonstrated long-term growth potential, strong marketing presence,
and the basis for continuing profitability. The Company has not
identified any specific target or possible acquisition. As the
Company pursues its acquisition program, it will incur costs for
ongoing general and administrative expenses as well as for
identifying, investigating, and negotiating a possible acquisition.
In order to complete any acquisition or expansion, the Company
may be required to supplement its available cash and other liquid
assets with proceeds from borrowing, the sale of additional
securities or other sources. There can be no assurance that any
such required additional funding will be available or, if
available, that it can be obtained on terms favorable to the
Company.
Government Regulations - The Company is subject to all pertinent
Federal, State, and Local laws governing its business. Each Eat at
Joe's is subject to licensing and regulation by a number of
authorities in its State or municipality. These may include
health, safety, and fire regulations. The Company's operations are
also subject to Federal and State minimum wage laws governing such
matters as working conditions, overtime and tip credits.
ITEM 7. FINANCIAL STATEMENTS
The financial statements of the Company and supplementary data
are included beginning immediately following the signature page to
this report. See Item 14 for a list of the financial statements
and financial statement schedules included.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
There are not and have not been any disagreements between the
Company and its accountants on any matter of accounting principles,
practices or financial statements disclosure.
PART III
ITEM 9. DIRECTORS EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF
THE EXCHANGE ACT
Executive Officers and Directors
The following table sets forth the name, age, and position of
each executive officer and director of the Company:
Director's
Name Age Office Term Expires
Joseph Fiore 36 Chief Executive officer, Next
Chairman of the Board of Annual
Directors/Secretary Meeting
James Mylock, Jr. 30 Director Next
Annual
Meeting
Andrew Cosenza, Jr. 28 President/Treasurer/ Next
Chief Operating Officer/ Annual
Director Meeting
Joseph Fiore has served as chairman and chief executive
officer of the Company since October 5, 1996. A native New Yorker
and graduate with honors from Fordham University, B.S. in Finance,
Mr. Fiore began his career in food service before he graduated from
college when he purchased his first restaurant in the Galleria Mall
in White Plains, N.Y. After graduation, he began working on the
development of a 1950's theme restaurant concept with a traditional
American menu of hamburgers, hot dogs, french fries, and ice cream
- - Eat at Joe's. Mr. Fiore will be working with the investment
community as well as all administrative activities within the
Company.
James Mylock, Jr. has served as a director of the Company
since October 5, 1996. Mr. Mylock went to work for Eat at Joe's
after graduation from the State University of New York at Buffalo
in 1990 with a B.A. in Sociology and an A.A.S. in Business
Administration. Combining his management skills with his interest
in social trends and marketing, Mr. Mylock took a management
position within a corporate retail unit where he gained a vast
knowledge of the restaurant industry as well as discovering
innovative ways to meet customer needs. He will be responsible for
business development and aid in territorial acquisitions.
Andrew Cosenza, Jr. has served as President/Secretary/
Treasurer/Chief Operating Officer and director of the Company from
October 5, 1996. Andrew Cosenza, Jr. is a graduate of Drexel
University where he majored in Finance with a minor in Hotel and
Restaurant Management. Mr. Cosenza successfully owned and operated
sit-down restaurants, pizzerias, and free-standing fast-food
outlets. Each of Mr. Cosenza's food outlets are operated as if
they are individually owned. Managers are experienced, mature and
motivated to succeed. Mr. Cosenza brings an enormous amount of
hands-on operational experience to Eat at Joe's as well as
corporate expertise.
The Company's Certificate of Incorporation provides that the
board of directors shall consist of from one to nine members as
elected by the shareholders. Each director shall hold office until
the next annual meeting of stockholders and until his successor
shall have been elected and qualified.
Board Meetings and Committees
The Directors and Officers will not receive remuneration from
the Company until a subsequent offering has been successfully
completed, or cash flow from operating permits, all in the
discretion of the Board of Directors. Directors may be paid their
expenses, if any, of attendance at such meeting of the Board of
Directors, and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as Director.
No such payment shall preclude any Director from serving the
Corporation in any other capacity and receiving compensation
therefor. No compensation has been paid to the Directors. The
Board of Directors may designate from among its members an
executive committee and one or more other committees. No such
committees have been appointed.
Compliance with Section 16(a) of the Exchange Act
Based solely upon a review of forms 3, 4, and 5 and amendments
thereto, furnished to the Company during or respecting its last
fiscal year, no director, officer, beneficial owner of more than
10% of any class of equity securities of the Company or any other
person known to be subject to Section 16 of the Exchange Act of
1934, as amended, failed to file on a timely basis reports required
by Section 16(a) of the Exchange Act for the last fiscal year.
ITEM 10. EXECUTIVE COMPENSATION
NONE.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Principal Shareholders
The table below sets forth information as to each person
owning of record or who was known by the Company to own
beneficially more than 5% of the 6,328,428 shares of issued and
outstanding Common Stock of the Company as of November 14, 1996 and
information as to the ownership of the Company's Stock by each of
its directors and executive officers and by the directors and
executive officers as a group. Except as otherwise indicated, all
shares are owned directly, and the persons named in the table have
sole voting and investment power with respect to shares shown as
beneficially owned by them.
To the best of management's knowledge there is not any
shareholder who owns more than 5% of the Company's common stock.
# of
Name and Address Nature of Shares
of Beneficial Owners Ownership Owned Percent
Directors
Joseph Fiore Common Stock None -0-
James Mylock, Jr. Common Stock None -0-
Andrew Cosenza, Jr. Common Stock None -0-
All Executive Officers Common Stock None -0-
and Directors as a Group
(3 persons)
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
NONE.
ITEM 13. EXHIBITS, AND REPORTS ON FORM 8-K
(a)The following documents are filed as part of this report.
1.Financial Statements
PAGE
Report of S.W. Hatfield + Associates, Independent Certified
Public Accountants F-1
Balance Sheets as of December 31, 1995, 1994 and 1993 F-3
Statements of Operations for the years ended
December 31, 1995, 1994 and 1993
and for the period January 6, 1988 (date of inception) to
December 31, 1995 F-4
Statement of Stockholders' Equity for the years ended
December 31, 1995, 1994, and 1993
and for the period January 6, 1988 (date of inception) to
December 31, 1995 F-6
Statements of Cash Flows for the years ended
December 31, 1995, 1994, and 1993
and for the period January 6, 1988 (date of inception) to
December 31, 1995 F-9
Notes to Financial Statements F-11
2. Financial Statement Schedules
The following financial statement schedules required by
Regulation S-X are included herein.
All schedules are omitted because they are not applicable or
the required information is shown in the financial statements or
notes thereto.
3. Exhibits
The following exhibits are included as part of this report:
SEC
Exhibit Reference
Number Number Title of Document Location
Item 3. Articles of Incorporation and Bylaws
3.01 3 Articles of Incorporation of Conceptualistics, Incorporated
Inc. a Utah Corporation now known as by Reference
Eat At Joe's, LTD.
3.02 3 Bylaws Incorporated
by Reference
Item 24. Consents of Experts and Counsel
24.01 24 Consent of S. W. Hatfield + Associates Incorporated
by Reference
(b) No reports on Form 8-K were filed during the 4th Quarter
of 1995.
(c) The exhibits listed in Item 14(a)(3) are incorporated by
reference.
(d) No financial statement schedules required by this
paragraph are required to be filed as a part of this
form.
SIGNATURES
Pursuant to the requirements of section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, the Registrant has
duly caused this report to be signed on it behalf by the
undersigned, thereunto duly authorized.
EAT JOE'S LTD.
Dated: November 25, 1996 By /s/Joseph Fiore
Joseph Fiore, President
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities
indicated on this 18th day of November 18, 1996.
EAT AT JOE'S LTD.
By /s/Joseph Fiore
Joseph fiore, Director and
Principal Executive
Officer
By /s/James Mylock, Jr.
James Mylock, Jr., Director
By /s/Andrew Cosenza, Jr.
Andes Cosenza, Jr. Director,
President (principle
financial and accounting officer)
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors and Stockholders
Morning Star Industries, Inc.
We have audited the accompanying balance sheets of Morning
Star Industries, Inc. (a Delaware corporation and a development
stage enterprise) as of December 31, 1995, 1994 and 1993 and the
related statements of operations, changes in stockholders' equity
and cash flows for the years then ended and for the period January
6, 1988 (date of inception) through December 31, 1995. 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 audits.
We conducted our audits 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 audits
provide 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
Morning Star Industries, Inc. (a development stage enterprise) as
of December 31, 1995, 1994 and 1993, and the results of its
operations and its cash flows for the years then ended and for the
period January 6, 1988 (date of inception) through December 31,
1995, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. As
discussed in Note A to the financial statements, the Company is
dependent upon its majority stockholder to maintain the corporate
status of the Company and to provide all nominal working capital
support on the Company's behalf. Because of the Company's lack of
operating assets, its continuance is fully dependent upon the
majority stockholder's continuing support. This situation raises
a substantial doubt about the Company's ability to continue as a
going concern. The majority stockholder intends to continue the
finding of nominal necessary expenses to sustain the corporate
entity. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
Respectfully submitted,
/s/
S. W. Hatfield + Associates
Certified Public Accountants
Salt Lake City, Utah
January 9, 1996
MORNING STAR INDUSTRIES, INC.
(a development stage enterprise)
BALANCE SHEETS
DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993
ASSETS $ - $ - $ -
LIABILITIES $ - $ - $ -
STOCKHOLDERS' EQUITY
Preferred stock - $0.0001 par
value. 10,000,000 shares
authorized; none issued and
outstanding - - -
Common stock - $0.0001 par value.
50,000,000 shares authorized.
15,698,662 issued and
outstanding, respectively. 1,570 1,570 1,570
Additional paid-in capital 381,306 381,306 381,306
Contributed capital 672,659 672,659 672,659
Deficit accumulated during the
development stage (1,055,535) (1,055,535) (1,055,535)
Total Stockholders' Equity - - -
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ - $ - $ -
The accompanying notes are an integral part of these financial
statements.
MORNING STAR INDUSTRIES, INC.
(a development stage enterprise)
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
AND THE PERIOD JANUARY 6, 1988 (DATE OF INCEPTION)
THROUGH DECEMBER 31, 1995
Period From
January 6,
1988
(Date of
Inception)
Year Ended Year Ended Year Ended Through
December 31 December 31 December 31 December 31
1995 1994 1993 1995
Revenues $ - $ - $ - $ -
Expenses
Amortization of
organization costs - - 936 6,244
Net loss from continuing
operations - - (936) (6,244)
Other Income
Interest income - - - 16,851
Net loss before discontinued
operations and income taxes - - (936) 10,607
Discontinued Operations
Loss from mining operations - - - (497,812)
Loss from foreclosure on
and abandonment of assets
and related liabilities - - - (568,330)
Total Effect of
Discontinued
Operations - - - (1,066,142)
Net loss before income taxes - - (936) (1,055,535)
Income Tax Expense (benefit) - - - -
Net Loss $ - $ -$ (936) $(1,055,535)
Net loss per weighted-average
share of common stock
outstanding nil nil nil $ (0.07)
Weighted-average number of
shares of common stock
outstanding 15,698,662 15,698,662 15,698,662 14,630,264
The accompanying notes are an integral part of these financial
statements.
MORNING STAR INDUSTRIES, INC.
(a development stage company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
AND THE PERIOD JANUARY 6, 1988 (DATE OF INCEPTION)
THROUGH DECEMBER 31, 1995
Deficit
Accumulated
Additional Contri- During the
Common Stock Paid-in buted Development
Shares Amount Capital Capital Stage Total
Issuance of stock
at formation 12,450,000 $ 1,245 $ - $ - $ - $ 1,245
Sale of common
stock 50,000 5 4,995 - - 5,000
Exercise of common
stock warrants -
Class A 306,380 31 155,900 - - 155,931
Capital contributed
to support
development - - - 350 - 350
Contribution of property
and equipment - - - 672,309 - 672,309
Net loss
for the period - - - - (140,919) (140,919)
Balances at
December 31, 1988 12,806,380 1,281 160,895 672,659 (140,919) 693,916
Sale of common
stock 160,000 16 19,984 - - 20,000
Exercise of common
stock warrants -
Class A 42,282 4 39,996 - - 40,000
Stock issued in
exchange for
acquisition of
mining equipment 1,100,000 110 126,090 - - 126,200
Net loss
for the year - - - - (258,133) (258,133)
Balances at
December 31, 1989 14,108,662 1,411 346,965 672,659 (399,052) 621,983
MORNING STAR INDUSTRIES, INC.
(a development stage company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
AND THE PERIOD JANUARY 6, 1988 (DATE OF INCEPTION)
THROUGH DECEMBER 31, 1995
(CONTINUED)
Deficit
Accumulated
Additional Contri- During the
Common Stock Paid-in buted Development
Shares Amount Capital Capital Stage Total
Balances at
December 31, 1989 14,108,662 $ 1,411 $ 346,965 $ 672,659 $ (399,052)$ 621,983
Net loss
for the year - - - - (45,585) (45,585)
Balances at
December 31, 1990 14,108,662 1,411 346,965 672,659 (444,637) 576,398
Sale of common
stock 60,000 6 4,494 - - 4,500
Common stock issued
to retire note
payable 1,450,000 145 19,855 - - 20,000
Net loss
for the year - - - - 19,304 19,304
Balances at
December 31, 1991 15,618,662 1,562 371,314 672,659 (425,333) 620,202
Sale of common
stock 80,000 8 9,992 - - 10,000
Net loss
for the year - - - - (629,265) (629,265)
Balances at
December 31, 1992 15,698,662 1,570 381,306 672,659 (1,054,598) 937
Net loss
for the year - - - - (937) (937)
MORNING STAR INDUSTRIES, INC.
(a development stage company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
AND THE PERIOD JANUARY 6, 1988 (DATE OF INCEPTION)
THROUGH DECEMBER 31, 1995
(CONTINUED)
Deficit
Accumulated
Additional Contri- During the
Common Stock Paid-in buted Development
Shares Amount Capital Capital Stage Total
Balances at
December 31, 1993 15,698,662 $ 1,570 $ 381,306 $ 672,659 $(1,055,535)$ -
Net loss
for the year - - - - - -
Balances at
December 31, 1994 15,698,662 1,570 381,306 672,659 (1,055,535) -
Net loss
for the year - - - - - -
Balances at
December 31, 1995 15,698,662 $ 1,570 $ 381,306 $ 672,659 $1,055,535)$ -
The accompanying notes are an integral part of these financial statements.
MORNING STAR INDUSTRIES, INC.
(a development stage company)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
AND THE PERIOD JANUARY 6, 1988 (DATE OF INCEPTION)
THROUGH DECEMBER 31, 1995
Period From
January 6,
1988
(Date of
Inception)
Year Ended Year Ended Year Ended Through
December 31 December 31 December 31 December 31
1995 1994 1993 1995
Cash Flows From Operating
Activities
Net loss for the period $ - $ - $ (936) $(1,055,535)
Adjustments to reconcile
net loss to net cash
provided by operating
activities
Loss from foreclosure and
abandonment of assets
and related liabilities - - - 568,330
Depreciation - - - 111,181
Payment of organization
costs - - - (6,244)
Amortization of
organization costs - - 936 6,244
Decrease in accrued
interest payable - - - 8,707
Contributed capital for
operating costs - - - 350
Net Cash Used in Operating
Activities - - (936) (366,967)
Cash Flows From Investing
Activities
Principal collected on
notes receivable - - - 199,727
Purchase of property and
equipment - - - (65,661)
Proceeds from sale of
property and equipment - - - 18,369
Net Cash Provided by Investing
Activities - - - 152,435
MORNING STAR INDUSTRIES, INC.
(a development stage company)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
AND THE PERIOD JANUARY 6, 1988 (DATE OF INCEPTION)
THROUGH DECEMBER 31, 1995
(CONTINUED)
Period From
January 6,
1988
(Date of
Inception)
Year Ended Year Ended Year Ended Through
December 31 December 31 December 31 December 31
1995 1994 1993 1995
Cash Flows From Financing
Activities
Issuance of common stock $ - $ - $ - $ 256,676
Payments on long-term debt - - - (36,307)
Advances to (from) majority
stockholder - - - (5,837)
Net Cash Used in Financing
Activities - - - 214,532
Increase in Cash - - - -
Cash at beginning of period - - - -
Cash at end of period $ - $ - $ - $ -
Supplemental Disclosure of
Interest and Income Taxes
Paid
Interest paid for the
period $ - $ - $ - $ 23,547
Income taxes paid for the
period $ - $ - $ - $ -
Supplemental Disclosure of
Non-cash Investing and
Financing Activities
Contribution of assets and
assumption of liabilities,
net, from majority
stockholder $ - $ - $ - $ 672,659
Mining equipment acquired
with issuance of common
stock $ - $ - $ - $ 251,200
The accompanying notes are an integral part of these financial
statements.
MORNING STAR INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. Organization and description of business
Morning Star Industries, Inc. (Company) was incorporated on
January 6, 1988, under the laws of the State of Delaware, as
a wholly-owned subsidiary of Debbie Reynolds Hotel and Casino,
Inc. (DRHC) (formerly Halter Venture Corporation or Halter
Racing Stables, Inc.) a publicly-owned corporation. DRHC
caused the Company to register 1,777,000 shares of its initial
12,450,000 issued and outstanding shares of common stock with
the Securities and Exchange Commission on Form S-18. DRHC
then distributed the registered shares to DRHC stockholders.
During the period September 30, 1988 to December 31, 1992, the
Company remained in the development stage while attempting to
enter the mining industry. The Company acquired certain
unpatented mining claims and related equipment necessary to
mine, extract, process and otherwise explore for kaolin clay,
silica, feldspar, precious metals, antimony and other
commercial minerals from its majority stockholder and other
unrelated third-parties. The Company was unsuccessful in
these start-up efforts and all activity was ceased during 1992
as a result of foreclosure on various loans in default and/or
the abandonment of all assets.
Since December 31, 1992, the Company has had no operations,
assets or liabilities. The current business purpose of the
Company is to seek out and obtain a merger, acquisition or
outright sale transaction whereby the Company's stockholders
will benefit. The Company has not engaged in any
negotiations, other than the commercial mining prospects, from
inception and has not undertaken any steps to initiate the
search for a merger or acquisition candidate.
The company's majority stockholder has continued to maintain
the corporate status of the Company and provides all nominal
working capital support on the Company's behalf. Because of
the Company's lack of operating assets, its continuance is
fully dependent upon the majority stockholder's continuing
support. The majority stockholder intends to continue the
funding of nominal necessary expenses to sustain the corporate
entity.
The Company is considered in the development stage and, as
such, has generated no significant operating revenues and has
incurred cumulative operating losses of approximately
$1,000,000.
MORNING STAR INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
2. Cash and cash equivalents
The Company considers all cash on hand and in banks, including
accounts in book overdraft positions, certificates of deposit
and other highly-liquid investments with maturities of three
months or less, when purchased, to be cash and cash
equivalents.
3. Organization costs
Organization costs were amortized using the straight-line
basis.
4. Income taxes
The Company files its own separate federal income tax return.
Due to the provisions of Internal Revenue Code section 338,
the Company will have no net operating loss carryforwards
available to offset financial statement or tax return taxable
income in future periods as a result of a change in control
involving 50 percentage points or more of the issued and
outstanding securities of the Company.
5. Loss per share
Loss per share is computed by dividing the net loss by the
weighted-average number of share of common stock and common
stock equivalents, if any, outstanding during the year/period.
NOTE B - RELATED PARTY TRANSACTIONS
For the period January 6, 1988 (date of inception) through
April 14, 1988, DRHC or its affiliates provided office space and
management services to the Company for a monthly fee. Total
expenses under this arrangement aggregated $350 for this cumulative
period.
During the period 1988 through 1992, the Company's then
majority stockholder periodically advanced funds to the Company for
working capital purposes. At liquidation and cessation of all
commercial mining activities, the Company charged off a net
receivable from the majority stockholder of approximately $5,800 as
additional compensation to the former majority stockholder.
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET OF EAT AT JOE'S, LTD. AS OF DECEMBER 31, 1995 AND THE RELATED STATEMENTS
OF OPERATIONS, EQUITY ABD CASHFLOWS FOR THE YEAR THEN ENDED AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
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