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- -------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION -----------------------------
FORM 4 WASHINGTON, D.C. 20549 OMB APPROVAL
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/ / CHECK THIS BOX IF NO STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OMB NUMBER: 3235-0287
LONGER SUBJECT TO EXPIRES: SEPTEMBER 30, 1998
SECTION 16. FORM 4 OR Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, ESTIMATED AVERAGE BURDEN
FORM 5 OBLIGATIONS MAY Section 17(a) of the Public Utility Holding Company Act of 1935 or HOURS PER RESPONSE .... 0.5
CONTINUE. SEE Section 30(f) of the Investment Company Act of 1940 -----------------------------
INSTRUCTION 1(b).
(Print or Type Responses)
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1. Name and Address of Reporting Person* 2. Issuer Name AND Ticker or Trading Symbol 6. Relationship of Reporting Person(s)
to Issuer (Check all applicable)
Director X 10% Owner
CAPITOL BAY MANAGEMENT, INC. MORROW SNOWBOARDS, INC. (MRRWE) ---- ----
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(Last) (First) (Middle) 3. IRS or Social Security 4. Statement for ---- title ---- (specify
Number of Reporting Month/Year below) below
Person (Voluntary) ----------------- ------------------
2424 PROFESSIONAL DRIVE 680308736 SEPTEMBER 1999***
- -------------------------------------------- --------------------- 7. Individual or Joint/Group Filing
(Street) 5. If Amendment, (Check Applicable Line)
Date of Original ___Form filed by One Reporting Person
(Month/Year) _X_Form filed by More than One
ROSEVILLE, CALIFORNIA 95661 Reporting Person
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(City) (State) (Zip) TABLE I - NON-DERIVATIVE SECURITIES ACQUIRED, DISPOSED OF, OR BENEFICIALLY OWNED
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1. Title of Security 2. Trans- 3. Trans- 4. Securities Acquired (A) 5. Amount of 6. Owner- 7. Nature
(Instr. 3) action action or Disposed of (D) Securities ship of In-
Date Code (Instr. 3 and 4) Beneficially Form: direct
(Instr. 8) Owned at Direct Bene-
(Month/ End of (D) or ficial
Day/ ------------------------------------------- Month Indirect Owner-
Year) (A) or (I) ship
Code V Amount (D) Price (Instr. 3 (Instr. 4) (Instr. 4)
and 4)
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Common Stock 09/30/1999 X 01, 02 A $.25 04 04 04
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Common Stock 10/09/1999 C V*** 01, 03 A $.25 04 04 04
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Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly. (Over)
* If the form is filed by more than one reporting person, SEE Instruction 4(b)(v). SEC 1474 (7-97)
POTENTIAL PERSONS WHO ARE TO RESPOND TO THE COLLECTION OF INFORMATION
CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM
DISPLAYS A CURRENTLY VALID OMB CONTROL NUMBER.
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FORM 4 (CONTINUED) TABLE II - DERIVATIVE SECURITIES ACQUIRED, DISPOSED OF, OR BENEFICIALLY OWNED
(E.G., PUTS, CALLS, WARRANTS, OPTIONS, CONVERTIBLE SECURITIES)
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1. Title of Derivative Security 2. Conver- 3. Trans- 4. Transac- 5. Number of Deriv- 6. Date Exer-
(Instr. 3) sion or action tion Code ative Securities Ac- cisable and Ex-
Exercise Date (Instr. 8) quired (A) or Dis- piration Date
Price of (Month/ posed of (D) (Month/Day/
Deriv- Day/ (Instr. 3, 4, and 5) Year)
ative Year)
Security
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Date Expira-
-------------------------------------- Exer- tion
cisable Date
Code V (A) (D)
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Stock Option $.25 09/30/1999 X 01 02 Immediately 04
(Right to Buy)
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Convertible $.25 10/09/1999 C V*** 01 03 Immediately 04
Promissory Note
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7. Title and Amount of Under- 8. Price 9. Number 10. Owner- 11. Nature
lying Securities of of Deriv- ship of In-
(Instr. 3 and 4) Deriv- ative Form direct
ative Securi- of De- Bene-
Secur- ties rivative ficial
ity Bene- Secu- Own-
(Instr. ficially rity: ership
5) Owned Direct (Instr. 4)
at End (D) or
Amount or of Indi-
Title Number of Month rect (I)
Shares (Instr. 4) (Instr. 4)
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Common Stock 01, 02 $.25 04 04 04
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Common Stock 01, 03 $.25 04 04 04
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INSTRUCTION 4(b)(v) LIST OF OTHER REPORTING PERSONS:
* This statement is being filed by Capitol Bay Management, Inc. ("CBM"); Capitol
Bay Securities, Inc. ("CBS"); Capitol Bay Group, Inc. ("CBG"); and Stephen C.
Kircher ("Mr. Kircher") (collectively the "Reporting Persons"). The principal
business address of each of the Reporting Persons is 2424 Professional Drive,
Roseville, CA 95661.
Explanation of Responses:
01: On March 30, 1999, certain trade creditors of Morrow Snowboards, Inc.
("MSI") 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 of Common Stock ("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. There were no exercise or
expiration dates restricting the purchase of derivative securities set forth
herein.
02: On September 30, 1999, CBM exercised the Rights and purchased
1,000,000 Shares at $.25 per Share.
03: On October 9, 1999, CBM consummated the conversion of the loan into
2,000,000 Shares.
04: CBM may be deemed to own beneficially and directly 3,000,000 shares.
CBM is a wholly-owned subsidiary of CBG and CBG is majority-owned by Mr.
Kircher. CBG and Mr. Kircher may be deemed to own beneficially and indirectly
such 3,000,000 shares. CBG and Mr. Kircher each disclaim beneficial ownership
of such shares owned by CBM except to the extent of pecuniary interest
therein.
As of the date hereof, CBS may be deemed to beneficially own 232,900
Shares, all of which are currently held in inventory for client accounts and
with respect to which CBS or its employees may have voting or investment
discretion, or both ("Managed Accounts"). CBS disclaims beneficial ownership of
the Shares held in Managed Accounts. CBS is a wholly-owned subsidiary of CBG and
CBG is majority-owned by Mr. Kircher, each of which disclaim any beneficial
ownership with respect to such Shares.
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Signatures:
Date: October 13, 1999
CAPITOL BAY MANAGEMENT, INC.
By: /s/ Stephen C. Kircher
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Stephen C. Kircher
President
CAPITOL BAY SECURITIES, INC.
By: /s/ Stephen C. Kircher
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Stephen C. Kircher
President
CAPITOL BAY GROUP, INC.
By: /s/ Stephen C. Kircher
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Stephen C. Kircher
President
By: /s/ Stephen C. Kircher
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Stephen C. Kircher
as an individual
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**INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACTS CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS. SEE 18 U.S.C. 1001 AND 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed.
If space is insufficient, See Instruction 6 for procedure.
Potential persons who are to respond to the collection of information contained
in this form are not required to respond unless the form displays a currently
valid OMB Number.
Page 2
SEC 1474 (7-97)
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