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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Morrow Snowboards, Inc.
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(Name of Issuer)
Common Stock, No Par Value
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(Title of Class of Securities)
61902C104
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(CUSIP Number)
Stephen C. Kircher, President & CEO
Capitol Bay Management, Inc.
2424 Professional Drive
Roseville, CA 95561
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
July 09, 1999
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ].
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 12
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SCHEDULE 13D
CUSIP NO. 61902C104
1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
CAPITOL BAY MANAGEMENT, INC.
I.R.S. IDENTIFICATION NUMBER - 68-0308736
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(A) [ ] (B) [ ]
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS
WC
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or (e) [ ]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
CALIFORNIA
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NUMBER 7. SOLE VOTING POWER
OF
SHARES -------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY EACH 3,000,000
REPORTING -------------------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH
-------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
3,000,000
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,000,000
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
32.69%
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14. TYPE OF REPORTING PERSON
CO
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Page 2 of 12
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SCHEDULE 13D
CUSIP NO. 61902C104
1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
CAPITOL BAY SECURITIES, INC.
I.R.S. IDENTIFICATION NUMBER - 68-0299608
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(A) [ ] (B) [ ]
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS
AF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or (e) [ ]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
CALIFORNIA
- --------------------------------------------------------------------------------
NUMBER 7. SOLE VOTING POWER
OF
SHARES -------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY EACH 180,400
REPORTING -------------------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH
-------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
180,400
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
180,400
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.92%
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14. TYPE OF REPORTING PERSON
BD
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Page 3 of 12
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SCHEDULE 13D
CUSIP NO. 61902C104
1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
CAPITOL BAY GROUP, INC.
I.R.S. IDENTIFICATION NUMBER - 68-0299607
STEPHEN C. KIRCHER
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(A) [ ] (B) [ ]
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS
AF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or (e) [ ]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
- --------------------------------------------------------------------------------
NUMBER 7. SOLE VOTING POWER
OF
SHARES -------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY EACH 3,180,400
REPORTING -------------------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH
-------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
3,180,400
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,180,400
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.66%
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14. TYPE OF REPORTING PERSON
IN, HC
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Page 4 of 12
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STATEMENT PURSUANT TO RULE 13d-1
OF THE
GENERAL RULES AND REGULATIONS
UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
The information furnished in response to each Item of Schedule 13D is
incorporated by reference in each other Item of this Schedule.
Item 1 SECURITY AND ISSUER.
This Schedule 13D relates to the Common Stock, no par value per share
(the "Shares"), of Morrow Snowboards, Inc. ("MSI"). Certain Reporting Persons
(as defined below) do not currently hold a certain portion of the Shares,
described herein, constituting an aggregate of 3,000,000 Shares, however, they
have the right to acquire beneficial ownership of such Shares as set forth in
Item 4.
The name of the issuer of such securities and the address of its
principal executive office are:
Morrow Snowboards, Inc.
2600 Pringle Road, S.E.
Salem, OR 97302
MSI is incorporated under the laws of the State of Oregon.
Item 2 IDENTITY AND BACKGROUND.
(a) The persons filing this Schedule 13D (collectively, "Reporting
Persons") are (i) Capitol Bay Management, Inc. ("CBM"); (ii) Capitol Bay
Securities, Inc. ("CBS"); (iii) Capitol Bay Group, Inc. ("CBG"); and (iv)
Stephen C. Kircher ("Mr. Kircher"). The filing of this Schedule 13D should
not be deemed an admission that CBM, CBS, CBG and/or Mr. Kircher comprise a
group within the meaning of Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended (the "Act").
(b) The business address of each of CBM, CBS, CBG and Mr. Kircher is
2424 Professional Drive, Roseville, California 95661.
(c) CBM is engaged primarily in the business of investment management
and consulting.
CBS is engaged primarily in the business of a securities
broker and dealer, is registered as a broker-dealer with the Securities and
Exchange Commission, and is a member of the National Association of Securities
Dealers, Inc.
CBG is engaged primarily as a holding company.
Mr. Kircher's principal occupation is as President and
Chairman of CBM and CBS.
(d) - (e) None of the Reporting Persons nor, to the best knowledge
of each Reporting Person, any director or executive officer of CBM, CBS or
CBG, has been, during the last five years, (a) convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (b) a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgement, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
Page 5 of 12
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Item 3 SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Funds necessary to purchase Shares will come from working capital.
Item 4 PURPOSE OF TRANSACTION.
On March 30, 1999, certain of MSI's trade creditors filed an
involuntary petition for relief under Chapter 7 of the United States Bankruptcy
Code in the District of Oregon ("Involuntary Petition"). MSI reached a
settlement with such creditors pursuant to which MSI and the creditors filed a
joint motion to dismiss the Involuntary Petition. On April 27, 1999, MSI's Board
of Directors authorized MSI to enter into a binding Memorandum of Understanding
("MOU") with CBM whereby CBM would provide MSI with additional financing to be
used as working capital. Pursuant to the MOU, CBM purchased from MSI's then
lender, Foothill Capital Corporation ("Foothill"), Foothill's secured lender
position. As set forth in the MOU, upon dismissal of the Involuntary Petition,
which became final on June 28, 1999, CBM may elect to convert $500,000 of the
Foothill loan into 2,000,000 Shares (as presently constituted), contingent upon
CBM performing its agreements under the MOU. On July 9, 1999, MSI's Board of
Directors determined that such conditions have been met to allow the conversion
of the loan and also authorized the sale of an additional 1,000,000 Shares at
$.25 per share (collectively the "Rights").
As of the date hereof, CBS beneficially owns 180,400 Shares, all of
which were purchased in open market transactions for its own account and are
currently held in inventory.
Each of CBM and CBS are wholly-owned subsidiaries of CBG and CBG is
majority-owned by Mr. Kircher. Therefore, Mr. Kircher may be deemed to
control CBG which may be deemed to control CBM and CBS. Thus, such Reporting
Persons may be deemed to share voting power and investment power with respect
to the 3,180,400 shares as referenced above in this Item 4.
The Reporting Persons have acquired the Shares for investment purposes
and in the ordinary course of business. The Reporting Persons have no present
plan or proposal which would relate to or result in any matters set forth in
subsequent paragraphs (a) - (j) of Item 4 of Schedule 13D except as set forth
herein or such as would occur upon completion of any of the actions discussed
above. However, the Reporting Persons may decide in the future, should they
believe that MSI's Shares continue to be undervalued, to increase their overall
ownership of Shares through, among other things, the purchase of additional
Shares on the open market or in private transactions, through tender offer or
otherwise, on such terms and at such times as the Reporting Persons may deem
advisable and/or to propose a transaction pursuant to which all or a portion of
MSI shall be sold, and in connection therewith the Reporting Persons may seek to
acquire control of MSI in a negotiated transaction or otherwise. The Reporting
Persons also may seek in the future to have one or more of their representatives
appointed to the Board of Directors of MSI, by agreement with MSI or otherwise,
including by running its own slate of nominees at an annual or special meeting
of MSI. The Reporting Persons may in the future propose other matters for
consideration and approval by MSI's stockholders or the Board of Directors,
including amendments to MSI's certificate of incorporation and by-laws to
eliminate any provisions which the Reporting Persons believe are designed to
benefit the management and the Board of Directors of MSI, but have not
identified such matters at this date.
Item 5 INTEREST IN SECURITIES OF THE ISSUER.
(a) The percentage of Shares reported beneficially owned by each person
herein is based on the sum of 6,176,556 Shares outstanding as indicated on MSI's
most recent Form 10-K, for the fiscal year ended January 31, 1998. In addition
the Shares that certain of the Reporting Persons have the right to acquire,
though not outstanding, are considered outstanding for the determination of such
Reporting Persons ownership of Shares.
As of July 9, 1999:
(i) CBM beneficially owns 3,000,000 Shares, which constitutes
32.69% of the Shares outstanding.
Page 6 of 12
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(ii) CBS beneficially owns 180,400 Shares, which constitutes 2.92%
of the Shares outstanding.
Each of CBS and CBM disclaims beneficial ownership of the
Shares held by the other.
(iii) Neither CBG nor Mr. Kircher directly own any Shares. Each
of CBM and CBS are wholly-owned subsidiaries of CBG and CBG is majority-owned
by Mr. Kircher. Therefore, Mr. Kircher may be deemed to control CBG which may
be deemed to control CBM and CBS. Thus, such Reporting Persons may be deemed
to share voting power and investment power with respect to 3,180,400 Shares,
or approximately 34.66% of the outstanding shares. Each of CBG and Mr.
Kircher disclaim beneficial ownership of such 3,180,400 Shares. Thus, Mr.
Kircher may be deemed to beneficially own approximately 34.66% of the
outstanding Shares. Mr. Kircher disclaims beneficial ownership of such
3,180,400 Shares.
(b) The number of Shares as to which each Reporting Person has sole
power to vote or to direct the vote, shared power to vote or to direct the vote,
sole power to dispose or direct the disposition, or shared power to dispose or
direct the disposition is set forth on the cover page to this Schedule 13D, and
such information is incorporated herein by reference.
(c) During the sixty day period ended as of the date hereof, except for
the transactions described herein, there have been no transactions with respect
to the class of securities reported on by the Reporting Persons named in
response to paragraph (a).
(d) None
(e) Not Applicable
Item 6 CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO THE SECURITIES OF THE ISSUER.
Except as set forth above, to the best knowledge of each
Reporting Person, no contracts, arrangements, understandings or relationships
(legal or otherwise) exist among the persons named in Item 2 above, or
between such persons and any other person with respect to any securities of
the Company, including, but not limited to, transfer or voting of each
securities, finder's fees, joint ventures, loan or option arrangements, puts
or calls, guarantees of profits, division of profits or loss, or the giving
or withholding of proxies.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
(a) Joint Filing Agreement
(b) Executive Officers and Directors of Capitol Bay Management,
Inc., Capitol Bay Securities, Inc. and Capitol Bay Group,
Inc.
In addition, the issuer's current reports on Form 8-K filed
May 3, 1999 and July 13, 1999, respectively and exhibits thereto are
incorporated by reference herein.
Page 7 of 12
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SIGNATURES
The filing of this Schedule 13D and the disclosures herein shall not be deemed
an admission that the Reporting Persons have had an acquisition of beneficial
ownership of Shares or otherwise has become subject to an obligation to file a
Schedule 13D relating to MSI, and shall not be deemed an admission that the
Reporting Persons are the beneficial owner of MSI Shares for any purpose other
than under Sections 13(d) and (g) of the Securities Exchange Act of 1934 and the
rules thereunder.
After reasonable inquiry and to the best of their knowledge and belief, each of
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Date: July 16, 1999
CAPITOL BAY MANAGEMENT, INC.
By: /s/ STEPHEN C. KIRCHER
------------------------
Stephen C. Kircher
President
CAPITOL BAY SECURITIES, INC.
By: /s/ STEPHEN C. KIRCHER
------------------------
Stephen C. Kircher
President
CAPITOL BAY GROUP, INC.
By: /s/ STEPHEN C. KIRCHER
------------------------
Stephen C. Kircher
President
STEPHEN C. KIRCHER
/s/ STEPHEN C. KIRCHER
------------------------
Stephen C. Kircher,
as an individual
Page 8 of 12
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EXHIBIT A
JOINT FILING AGREEMENT
Page 9 of 12
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JOINT FILING AGREEMENT
In accordance with Rule 13d-1(k)(1) promulgated under the Securities
Exchange Act of 1934, as amended, the undersigned agree to the joint filing of a
statement on Schedule 13D (including any and all amendments thereto) with
respect to the Common Stock of Morrow Snowboards, Inc. and further agree that
this Joint Filing Agreement be included as an Exhibit thereto. In addition, each
party to this Agreement expressly authorizes each other to this Agreement to
file on its behalf any and all amendments to such statement.
Date: July 16, 1999
CAPITOL BAY MANAGEMENT, INC.
By: /s/ STEPHEN C. KIRCHER
------------------------
Stephen C. Kircher
President
CAPITOL BAY SECURITIES, INC.
By: /s/ STEPHEN C. KIRCHER
------------------------
Stephen C. Kircher
President
CAPITOL BAY GROUP, INC.
By: /s/ STEPHEN C. KIRCHER
------------------------
Stephen C. Kircher
President
STEPHEN C. KIRCHER
/s/ STEPHEN C. KIRCHER
------------------------
Stephen C. Kircher,
as an individual
Page 10 of 12
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EXHIBIT B
LIST OF EXECUTIVE OFFICERS AND DIRECTORS OF
CAPITOL BAY MANAGEMENT, INC. AND
CAPITOL BAY SECURITIES, INC.
Page 11 of 12
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LIST OF EXECUTIVE OFFICERS AND DIRECTORS OF
CAPITOL BAY MANAGEMENT, INC. AND
CAPITOL BAY SECURITIES, INC.
The executive officers and directors of Capitol Bay Management, Inc.
and Capitol Bay Securities, Inc. are the same and are constituted as follows:
OFFICERS
Stephen C. Kircher - President and Chief Executive Officer
Elizabeth A. McCargar - Secretary and Chief Financial Officer
DIRECTORS
Stephen C. Kircher
Elizabeth A. McCargar
The executive officers and directors of Capitol Bay Group, Inc.
are as follows:
OFFICERS
Stephen C. Kircher - President and Chief Executive Officer
Elizabeth A. McCargar - Secretary and Chief Financial Officer
DIRECTORS
Stephen C. Kircher
Elizabeth A. McCargar
Larry D. Kelley
Steven Kay
Page 12 of 12
