U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
Commission File No: 0-21847
BOULDER CAPITAL OPPORTUNITIES II, INC.
(Name of small business in its charter)
Colorado 84-1356898
(State or other jurisdiction (IRS Employer
of Incorporation) Identification No.)
P.O. Box 890261
Temecula, California 92589
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (909)693-2285
Securities to be registered under Section 12(b) of the Act: None
Securities to be registered under Section 12(g) of the Act:
Common Stock, no par value
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities 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 .... No ..X..
Check if disclosure of delinquent filers in response 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. ..X..
State issuer's revenue for its most recent fiscal year: $-0-
State the aggregate market value of the voting stock held by nonaffiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days: $ 0.
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 1,030,200 as of May 1, 1999
(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"). The listed documents
should be clearly described for identification purposes.
Transitional Small Business Disclosure Format:
Yes .... No ..X..
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
GENERAL
The Company was incorporated under the laws of the State of Colorado on
August 8, 1996, and as of the date of this report on Form 10-KSB remains in the
development stage. To date the Company's only activities have been
organizational ones, directed at developing its business plan and raising its
initial capital. The Company has not commenced any commercial operations. The
Company has no full-time employees and owns no real estate.
On December 17, 1997, control of the Company passed to Michael Delaney, who
paid cash consideration of $11,359 for a total of 627,965 common shares of the
Company, which is a total of approximately 61% of the Registrant. Mr. Delaney
was also named the President, Secretary, and sole Director of the Company at
that time, and the former Officer and Director resigned.
The Company's business plan is to seek, investigate, and, if warranted,
acquire one or more properties or businesses, and to pursue other related
activities intended to enhance shareholder value. The acquisition of a business
opportunity may be made by purchase, merger, exchange of stock, or otherwise,
and may encompass assets or a business entity, such as a corporation, joint
venture, or partnership. The Company has very limited capital, and it is
unlikely that the Company will be able to take advantage of more than one such
business opportunity. The Company intends to seek opportunities demonstrating
the potential of long-term growth as opposed to short-term earnings.
At the present time the Company has not identified any business opportunity
that it plans to pursue, nor has the Company reached any agreement or definitive
understanding with any person concerning an acquisition. No assurance can be
given that the Company will be successful in finding or acquiring a desirable
business opportunity, or that any acquisition that occurs will be on terms that
are favorable to the Company or its stockholders.
The Company's search will be directed toward small and medium-sized
enterprises which have a desire to become public corporations and which are able
to satisfy, or anticipate in the reasonably near future being able to satisfy,
the minimum asset requirements in order to qualify shares for trading on NASDAQ
(See "Investigation and Selection of Business Opportunities"). The Company
anticipates that the business opportunities presented to it will (i) be recently
organized with no operating history, or a history of losses attributable to
under-capitalization or other factors; (ii) be experiencing financial or
operating difficulties; (iii) be in need of funds to develop a new product or
service or to expand into a new market; (iv) be relying upon an untested product
or marketing concept; or (v) have a combination of the characteristics mentioned
in (i) through (iv). The Company intends to concentrate its acquisition efforts
on properties or businesses that it believes to be undervalued. Given the above
factors, investors should expect that any acquisition candidate may have a
history of losses or low profitability.
The Company does not propose to restrict its search for investment
opportunities to any particular geographical area or industry, and may,
therefore, engage in essentially any business, to the extent of its limited
resources. This includes industries such as service, finance, natural resources,
manufacturing, high technology, product development, medical, communications and
others. The Company's discretion in the selection of business opportunities is
unrestricted, subject to the availability of such opportunities, economic
conditions, and other factors.
Following closing of any proposed stock sale, current management will have
no further control over conduct of the Company's business. In the future,
depending upon the nature of the transaction, the then current officers and
directors of the Company may resign their management positions with the Company
in connection with the Company's acquisition of a business opportunity.
<PAGE>
INVESTIGATION AND SELECTION OF BUSINESS OPPORTUNITIES
The analysis of business opportunities will be undertaken by or under the
supervision of the Company's officers. The Company anticipates that it will
consider, among other things, the following factors in the analysis of business
opportunities:
(1) Potential for growth and profitability, indicated by new
technology, anticipated market expansion, or new products;
(2) The Company's perception of how any particular business
opportunity will be received by the investment community and by the Company's
stockholders;
(3) Whether, following the business combination, the financial
condition of the business opportunity would be, or would have a significant
prospect in the foreseeable future of becoming sufficient to enable the
securities of the Company to qualify for listing on an exchange or on a national
automated securities quotation system, such as NASDAQ;
(4) Capital requirements and anticipated availability of required
funds, to be provided by the Company or from operations, through the sale of
additional securities, through joint ventures or similar arrangements, or from
other sources;
(5) The extent to which the business opportunity can be advanced;
(6) Competitive position as compared to other companies of similar
size and experience within the industry segment as well as within the industry
as a whole;
(7) Strength and diversity of existing management, or management
prospects that are scheduled for recruitment;
(8) The cost of participation by the Company as compared to the
perceived tangible and intangible values and potential; and
(9) The accessibility of required management expertise, personnel, raw
materials, services, professional assistance, and other required items.
No one of the factors described above will be controlling in the selection
of a business opportunity, and management will attempt to analyze all factors
appropriate to each opportunity and make a determination based upon reasonable
investigative measures and available data. Potential investors must recognize
that, because of the Company's limited capital available for investigation and
management's limited experience in business analysis, the Company may not
discover or adequately evaluate adverse facts about the opportunity to be
acquired.
Company management believes that various types of potential merger or
acquisition candidates might find a business combination with the Company to be
attractive. These include acquisition candidates desiring to create a public
market for their shares in order to enhance liquidity for current shareholders,
acquisition candidates which have long-term plans for raising capital through
the public sale of securities and believe that the possible prior existence of a
public market for their securities would be beneficial, and acquisition
candidates which plan to acquire additional assets through issuance of
securities rather than for cash, and believe that the possibility of development
of a public market for their securities will be of assistance in that process.
Acquisition candidates which have a need for an immediate cash infusion are not
likely to find a potential business combination with the Company to be an
attractive alternative.
<PAGE>
FORM OF ACQUISITION
It is impossible to predict the manner in which the Company may participate
in a business opportunity. Specific business opportunities will be reviewed as
well as the respective needs and desires of the Company and the promoters of the
opportunity and, upon the basis of that review and the relative negotiating
strength of the Company and such promoters, the legal structure or method deemed
by management to be suitable will be selected. Such structure may include, but
is not limited to leases, purchase and sale agreements, licenses, joint ventures
and other contractual arrangements. The Company may act directly or indirectly
through an interest in a partnership, corporation or other form of organization.
Implementing such structure may require the merger, consolidation or
reorganization of the Company with other corporations or forms of business
organization, and although it is likely, there is no assurance that the Company
would be the surviving entity. In addition, the present management and
stockholders of the Company most likely will not have control of a majority of
the voting shares of the Company following a reorganization transaction. As part
of such a transaction, the Company's existing directors may resign and new
directors may be appointed without any vote by stockholders.
It is likely that the Company will acquire its participation in a business
opportunity through the issuance of Common Stock or other securities of the
Company. Although the terms of any such transaction cannot be predicted, it
should be noted that in certain circumstances the criteria for determining
whether or not an acquisition is a so-called "tax free" reorganization under the
Internal Revenue Code of 1986, depends upon the issuance to the stockholders of
the acquired company of a controlling interest (i.e. 80% or more) of the common
stock of the combined entities immediately following the reorganization. If a
transaction were structured to take advantage of these provisions rather than
other "tax free" provisions provided under the Internal Revenue Code, the
Company's current stockholders would retain in the aggregate 20% or less of the
total issued and outstanding shares. This could result in substantial additional
dilution in the equity of those who were stockholders of the Company prior to
such reorganization. Any such issuance of additional shares might also be done
simultaneously with a sale or transfer of shares representing a controlling
interest in the Company by the current officers, directors and principal
shareholders. (See "Description of Business - General").
ITEM 2. DESCRIPTION OF PROPERTY.
The Company does not currently maintain an office or any other facilities.
It does currently maintain a mailing address at P.O. Box 890261 Temecula,
California 92589, which is the address of its sole Officer and Director. The
Company pays no rent for the use of this mailing address. The Company does not
believe that it will need to maintain an office at any time in the foreseeable
future in order tocarry out its plan of operations described herein. The
Company's telephone number is (909)693-2285
ITEM 3. LEGAL PROCEEDINGS.
The Company is not a party to any pending legal proceedings, and no such
proceedings are known to be contemplated.
No director, officer or affiliate of the Company, and no owner of record or
beneficial owner of more than 5% of the securities of the Company, or any
associate of any such director, officer or security holder is a party adverse to
the Company or has a material interest adverse to the Company in reference to
pending litigation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of the security holders of the Company
during the fourth quarter of the fiscal year which ended December 31, 1998.
<PAGE>
Part II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
There is currently no public trading market for the Company's securities.
The securities are held of record by a total of approximately 10 persons.
No dividends have been declared or paid on the Company's securities, and it
is not anticipated that any dividends will be declared or paid in the
foreseeable future.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The Company's plan of operations for the next twelve months is to continue
to carry out its plan of business discussed above. This includes seeking to
complete a merger or acquisition transaction with a small or medium-sized
enterprise which desires to become a public corporation. In selecting a
potential merger or acquisition candidate, the Company will consider many
factors, including, but not limited to, potential for growth and profitability,
quality and experience of management, capital requirements, and the ability of
the Company to qualify its shares for trading on NASDAQ or on an exchange.
The types of business enterprises which it is believed might find a
business combination with the Company to be attractive include acquisition
candidates desiring to create a public market for their shares in order to
enhance liquidity for current shareholders, acquisition candidates which have
long-term plans for raising capital through the public sale of securities and
believe that the possible prior existence of a public market for their
securities would be beneficial, foreign companies desiring to obtain access to
U.S. customers and U.S. capital markets, and acquisition candidates which plan
to acquire additional assets through issuance of securities rather than for
cash, and believe that the possibility of development of a public market for
their securities will be of assistance in that process. Acquisition candidates
which have a need for an immediate cash infusion are not likely to find a
potential business combination with the Company to be an attractive alternative.
The Company will not be required to raise additional funds, or its
shareholders will be required to advance funds in order to pay its current
liabilities and to satisfy the Company's cash requirements for the next twelve
months.
ITEM 7. FINANCIAL STATEMENTS.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------
The Board of Directors
Boulder Capital Opportunities II, Inc.
Boulder, CO
We have audited the accompanying balance sheets of Boulder Capital Opportunities
II, Inc. (a development-stage company) as of August 31, 1998 and August 31,
1997, and the related statements of operations, stockholders' equity and cash
flows for the period from August 8, 1996 (date of inception) through August 31,
1997 and the year ending August 31, 1998. These financial statements are the
responsibility of the company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements, referred to above, present fairly, in
all material respects, the financial position of Boulder Capital Opportunities
II, Inc. (a development-stage company) as of August 31, 1998 and August 31,
1997, and the results of its operations, changes in its stockholders' equity and
its cash flows for the period from August 8, 1996 (date of inception) through
August 31, 1997 and the year ended August 31, 1998 in conformity with generally
accepted accounting principles.
The accompanying balance sheets have been prepared assuming that the Company
will continue as a going concern. As described in Note 2 to the financial
statements, the Company has suffered recurring losses from operations and has a
net working capital deficiency that raise substantial doubts about its ability
to continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Schumacher & Associates, Inc.
Certified Public Accountants
12835 E. Arapahoe Road
Tower II, Suite 110
Englewood, CO 80112
January 2, 1999
<PAGE>
BOULDER CAPITAL OPPORTUNITIES II, INC.
--------------------------------------
(A Development Stage Company)
BALANCE SHEETS
August 31, August 31,
1997 1998
---- ----
ASSETS
------
Current Assets:
Cash $ 382 $ --
-------- --------
Total Current Assets 382 --
-------- --------
Organization costs, net of
amortization 22,247 16,567
-------- --------
TOTAL ASSETS $ 22,629 $ 16,567
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Accounts payable $ 970 $ 1,168
-------- --------
Total Current Liabilities 970 1,168
-------- --------
TOTAL LIABILITIES 970 1,168
-------- --------
Stockholders' Equity:
Preferred stock, no par value
10,000,000 shares authorized,
none issued and outstanding -- --
Common stock, no par value
100,000,000 shares authorized,
1,030,200 issued and outstanding 60,600 60,600
Additional paid-in capital -- 3,985
Accumulated (Deficit) (38,941) (49,186)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 21,659 15,399
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 22,629 $ 16,567
======== ========
The accompanying notes are an integral part of the financial statements.
<PAGE>
BOULDER CAPITAL OPPORTUNITIES II, INC.
--------------------------------------
(A Development Stage Company)
STATEMENTS OF OPERATIONS
For the period For the period
August 8, 1996 For the Year August 8, 1996
(Inception) to Ended (Inception) to
August 31, August 31, August 31,
1997 1998 1998
----------- ----------- -----------
Revenue $ 5,000 $ -- $ 5,000
----------- ----------- -----------
Expenses:
Amortization 6,153 5,680 11,833
Professional fees 10,868 3,167 14,035
Stock issued for services (Note 3) 20,200 -- 20,200
Other 6,796 1,398 8,194
----------- ----------- -----------
44,017 10,245 54,262
----------- ----------- -----------
Net Operating(Loss) $ (39,017) $ (10,245) $ (49,262)
----------- ----------- -----------
Other Income
Interest income 76 -- 76
----------- ----------- -----------
Net (Loss) $ (38,941) $ (10,245) $ (49,186)
=========== =========== ===========
Per Share $ (.04) $ (.01) $ (.05)
=========== =========== ===========
Weighted Average Shares
Outstanding 1,030,200 1,030,200 1,030,200
=========== =========== ===========
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
BOULDER CAPITAL OPPORTUNITIES II, INC.
--------------------------------------
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Period from August 8, 1996
(date of inception) through August 31, 1998
Additional
Preferred Stock Common Stock paid-in Accumulated
No./Shares Amount No./Shares Amount capital (Deficit) Total
---------- ------ ---------- ------ ------- --------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at August 8, 1996 -- $-- -- $ -- $ -- $ -- $ --
Common stock issued for
services, at inception,
at $.04 per share -- -- 710,000 28,400 -- -- 28,400
Common stock issued for
cash at $.0025 per share -- -- 100,000 4,000 -- -- 4,000
Common stock issued for
cash at $.04 per share -- -- 100,000 4,000 -- -- 4,000
Common stock subscribed
at $.04 per share -- -- 100,000 4,000 -- -- 4,000
Net loss-one month period
ended August 31, 1996 -- -- -- -- -- (6,448) (6,448)
-- ---- --------- --------- --------- --------- ---------
Balance at August 31, 1996 -- -- 1,010,000 40,400 -- (6,448) 33,952
Common stock issued for
services at $1.00 per share -- -- 20,200 20,200 -- -- 20,200
Net loss-year ended
August 31, 1997 -- -- -- -- -- (32,493) (32,493)
-- ---- --------- --------- --------- --------- ---------
Balance at August 31, 1997 -- -- 1,030,200 60,600 -- (38,941) 21,659
Additional paid-in capital -- -- -- -- 3,985 3,985
Net loss-year ended
August 31, 1998 -- -- -- -- -- (10,245) (10,245)
-- ---- --------- --------- --------- --------- ---------
Balance at August 31, 1998 -- $-- 1,030,200 $ 60,600 $ 3,985 $ (49,186) $ 15,399
== ==== ========= ========= ========= ========= =========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOULDER CAPITAL OPPORTUNITIES II, INC.
--------------------------------------
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For the period For the period
August 8, 1996 For the year August 8, 1996
(Inception) to Ended (Inception) to
August 31, August 31, August 31,
1997 1998 1998
---- ---- ----
Operating Activities:
<S> <C> <C> <C>
Net (Loss) $(38,941) $(10,245) $(49,186)
Adjustment to reconcile net
(loss) to net cash provided
by operating activities:
Amortization 6,153 5,680 11,833
Increase in accounts payable
and accrued expenses 970 198 1,168
Stock issued for services 23,950 -- 23,950
-------- -------- --------
Net Cash (Used in) Operating
Activities (7,868) (4,367) (12,235)
-------- -------- --------
Cash Flows from Investing
Activities -- -- --
-------- -------- --------
Cash Flows from Financing Activities:
Additional paid-in capital -- 3,985 3,985
Issuance of common stock 8,250 -- 8,250
-------- -------- --------
Net Cash Provided by Financing
Activities 8,250 3,985 12,235
-------- -------- --------
Increase (decrease) in Cash 382 (382) --
Cash, Beginning of Period -- 382 --
-------- -------- --------
Cash, End of Period $ 382 $ -- $ --
======== ======== ========
Interest Paid $ -- $ -- $ --
======== ======== ========
Income Taxes Paid $ -- $ -- $ --
======== ======== ========
Note: On August 8, 1996, professional services capitalized as organizational
costs valued at $28,400 were exchanged for 710,000 shares of common stock.
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
BOULDER CAPITAL OPPORTUNITIES II, INC.
--------------------------------------
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 1998
(1) Summary of Accounting Policies
This summary of significant accounting policies of Boulder Capital
Opportunities II, Inc. (Company) is presented to assist in understanding
the Company=s financial statements. The financial statements and notes are
representations of the Company=s management who is responsible for their
integrity and objectivity. These accounting policies conform to generally
accepted accounting principles and have been consistently applied in the
preparation of the financial statements.
(a) Description of Business
The Company was organized on August 8, 1996, in the State of Colorado
for the purpose of engaging in any lawful business but it is
management's plan to seek a business combination. The Company is in a
development-stage and its intent is to operate as a capital market
access corporation and to acquire one or more existing businesses
through merger or acquisition. The Company has had no significant
business activity to date. The Company has selected August 31 as its
year end.
(b) Use of Estimates in the Preparation of Financial Statements
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.
(c) Organization Costs
Costs incurred to organize the Company include costs for professional
fees and are being amortized on a straight-line basis over a sixty
month period.
<PAGE>
BOULDER CAPITAL OPPORTUNITIES II, INC.
--------------------------------------
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 1998
(1) Summary of Accounting Policies, Continued
(d) Income Taxes
As of August 31, 1998, the Company had net operating losses available
for carryover to future years of approximately $49,186, expiring in
2012. Because of the change in ownership described in Note 5, the
utilization of these carryovers may be restricted. As of August 31,
1998, the Company has deferred tax assets of approximately $9,837 due
to operating loss carryforwards. However, because of the uncertainty
of potential realization of these assets, the Company has provided a
valuation allowance for the entire $9,837. Thus, no tax assets have
been recorded in the financial statements as of August 31, 1998.
(2) Basis of Presentation - Going Concern
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplates continuation
of the Company as a going concern. However, the Company has sustained
operating losses since inception and has a net working capital deficiency.
These matters raise substantial doubt about the Company=s ability to
continue as a going concern. Management is attempting to locate a business
combination candidate.
In view of these matters, continuing as a going concern is dependent upon
the Company=s ability to meet its financing requirements, raise additional
capital, and the success of its future operations or completion of a
successful business combination. Management believes that actions planned
and presently being taken to revise the Company=s operating and financial
requirements provide the opportunity for the Company to continue as a going
concern.
<PAGE>
BOULDER CAPITAL OPPORTUNITIES II, INC.
--------------------------------------
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 1998
(3) Common Stock Issued
On August 8, 1996, the Company issued 710,000 shares of its no par value
common stock to affiliates for organizational services valued at their fair
market value of $28,400.
On August 8, 1996, the Company issued 100,000 shares of its no par value
common stock to its President at $0.0025 per share for cash of $250 and
$0.0375 per share in exchange for officer compensation of $3,750, $4,000 in
total.
On August 31, 1996, the Company issued 100,000 shares of its no par value
common stock to various investors for $4,000; 100,000 additional shares
remain subscribed for at August 31, 1996. These were collected in
September, 1996.
During the period ended August 31, 1997 the Company issued 20,200 shares of
its no par value common stock for services valued at $20,200.
(4) Related Party Transactions
At August 31, 1997, the Company owed $818 in attorney=s fees to a
shareholder of the Company.
(5) Change in Control
Effective October 15, 1997, the shareholders of the Company entered into an
agreement to sell shares of their restricted common stock to an outside
party which resulted in a change in control of the Company.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------
The Board of Directors
Boulder Capital Opportunities II, Inc.
Boulder, CO
We have audited the accompanying balance sheets of Boulder Capital Opportunities
II, Inc. (a development-stage company) as of December 31, 1998 and August 31,
1998, and the related statements of operations, stockholders' equity and cash
flows for the period from August 8, 1996 (date of inception) through August 31,
1997, for the year ending August 31, 1998, and for the four months ending
December 31, 1998. These financial statements are the responsibility of the
company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements, referred to above, present fairly, in
all material respects, the financial position of Boulder Capital Opportunities
II, Inc. (a development-stage company) as of December 31, 1998 and August 31,
1998, and the results of its operations, changes in its stockholders' equity and
its cash flows for the period from August 8, 1996 (date of inception) through
August 31, 1997, for the year ended August 31, 1998 and for the four months
ended December 31, 1998 in conformity with generally accepted accounting
principles.
The accompanying balance sheets have been prepared assuming that the Company
will continue as a going concern. As described in Note 2 to the financial
statements, the Company has suffered recurring losses from operations and has a
net working capital deficiency that raise substantial doubts about its ability
to continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Schumacher & Associates, Inc.
Certified Public Accountants
12835 E. Arapahoe Road
Tower II, Suite 110
Englewood, CO 80112
January 2, 1999
<PAGE>
BOULDER CAPITAL OPPORTUNITIES II, INC.
--------------------------------------
(A Development Stage Company)
BALANCE SHEETS
August 31, December 31,
1998 1998
-------- --------
ASSETS
------
Current Assets:
Cash $ -- $ --
-------- --------
Total Current Assets -- --
-------- --------
Organization costs, net of
amortization 16,567 14,674
-------- --------
TOTAL ASSETS $ 16,567 $ 14,674
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Accounts payable $ 1,168 $ 243
-------- --------
Total Current Liabilities 1,168 243
-------- --------
TOTAL LIABILITIES 1,168 243
-------- --------
Stockholders' Equity:
Preferred stock, no par value
10,000,000 shares authorized,
none issued and outstanding -- --
Common stock, no par value
100,000,000 shares authorized,
1,030,200 issued and outstanding 60,600 60,600
Additional paid-in capital 3,985 5,564
Accumulated (Deficit) (49,186) (51,733)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 15,399 14,431
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 16,567 $ 14,674
======== ========
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
BOULDER CAPITAL OPPORTUNITIES II, INC.
--------------------------------------
(A Development Stage Company)
STATEMENTS OF OPERATIONS
For the period For the period
August 8, 1996 For the Year For the Four August 8, 1996
(Inception) to Ended Months Ended (Inception) to
August 31, August 31, December 31, December 31,
1997 1998 1998 1998
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Revenue $ 5,000 $ -- $ -- $ 5,000
----------- ----------- ----------- ----------
Expenses
Amortization 6,153 5,680 1,893 13,726
Professional fees 10,868 3,167 -- 14,035
Stock issued for services (Note 3) 20,200 -- -- 20,200
Other 6,796 1,398 654 8,848
----------- ----------- ----------- ----------
44,017 10,245 2,547 56,809
----------- ----------- ----------- ----------
Net Operating (Loss) (39,017) $ (10,245) $ (2,547) $ (51,809)
----------- ----------- ----------- ----------
Other Income
Interest income 76 -- -- 76
----------- ----------- ----------- ----------
Net (Loss) $ (38,941) $ (10,245) $ (2,547) $ (51,733)
=========== =========== =========== ==========
Per Share $ (.04) $ (.05) $ nil $ (.05)
=========== =========== =========== ==========
Weighted Average Shares
Outstanding 1,030,200 1,030,200 1,030,200 1,030,200
=========== =========== =========== ==========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOULDER CAPITAL OPPORTUNITIES II, INC.
--------------------------------------
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Period from August 8, 1996
(date of inception) through December 31, 1998
Additional
Preferred Stock Common Stock paid-in Accumulated
No./Shares Amount No./Shares Amount capital (Deficit) Total
---------- ------ ---------- ------ ------- --------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at August 8, 1996 -- $-- -- $ -- $ -- $ -- $ --
Common stock issued for
services, at inception,
at $.04 per share -- -- 710,000 28,400 -- -- 28,400
Common stock issued for
cash at $.0025 per share -- -- 100,000 4,000 -- -- 4,000
Common stock issued for
cash at $.04 per share -- -- 100,000 4,000 -- -- 4,000
Common stock subscribed
at $.04 per share -- -- 100,000 4,000 -- -- 4,000
Net loss-one month period
ended August 31, 1996 -- -- -- -- -- (6,448) (6,448)
-- ---- --------- --------- --------- --------- ---------
Balance at August 31, 1996 -- -- 1,010,000 40,400 -- (6,448) 33,952
Common stock issued for
services at $1.00 per share -- -- 20,200 20,200 -- -- 20,200
Net loss-year ended
August 31, 1997 -- -- -- -- -- (32,493) (32,493)
-- ---- --------- --------- --------- --------- ---------
Balance at August 31, 1997 -- -- 1,030,200 60,600 -- (38,941) 21,659
Additional paid-in capital -- -- -- -- 3,985 3,985
Net loss-year ended
August 31, 1998 -- -- -- -- -- (10,245) (10,245)
-- ---- --------- --------- --------- --------- ---------
Balance at August 31, 1998 -- -- 1,030,200 60,600 3,985 (49,186) 15,399
Additional paid-in capital -- -- -- -- 1,579 -- 1,579
Net loss-four months ended
December 31, 1998 -- -- -- -- -- (2,547) (2,547)
-- ---- --------- --------- --------- --------- ---------
Balance at December 31, 1998 -- $-- 1,030,200 $ 60,600 $ 5,564 $ (51,733) $ 14,431
== ==== ========= ========= ========= ========= =========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOULDER CAPITAL OPPORTUNITIES II, INC.
--------------------------------------
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For the period For the period
August 8, 1996 For the Year For the four August 8, 1996
(Inception) to Ended Months Ended (Inception) to
August 31, August 31, December 31, December 31,
1997 1998 1998 1998
-------- -------- -------- --------
Operating Activities:
<S> <C> <C> <C> <C>
Net (Loss) $(38,941) $(10,245) $ (2,547) $(51,733)
Adjustment to reconcile net
(loss) to net cash provided
by operating activities:
Amortization 6,153 5,680 1,893 13,726
Increase (decrease) in accounts
payable and accrued expenses 970 198 (925) 243
Stock issued for services 23,950 -- -- 23,950
-------- -------- -------- --------
Net Cash (Used in) Operating
Activities (7,868) (4,367) (1,579) (13,814)
-------- -------- -------- --------
Cash Flows from Investing
Activities -- -- -- --
-------- -------- -------- --------
Cash Flows from Financing Activities:
Additional paid-in capital -- 3,985 1,579 5,564
Issuance of common stock 8,250 -- -- 8,250
-------- -------- -------- --------
Net Cash Provided by Financing
Activities 8,250 3,985 1,579 13,814
-------- -------- -------- --------
Increase (decrease) in Cash 382 (382) -- --
Cash, Beginning of Period -- 382 -- --
-------- -------- -------- --------
Cash, End of Period $ 382 $ -- $ -- $ --
======== ======== ======== ========
Interest Paid $ -- $ -- $ -- $ --
======== ======== ======== ========
Income Taxes Paid $ -- $ -- $ -- $ --
======== ======== ======== ========
Note: On August 8, 1996, professional services capitalized as organizational
costs valued at $28,400 were exchanged for 710,000 shares of common stock.
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
BOULDER CAPITAL OPPORTUNITIES II, INC.
--------------------------------------
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
(1) Summary of Accounting Policies
This summary of significant accounting policies of Boulder Capital
Opportunities II, Inc. (Company) is presented to assist in understanding
the Company=s financial statements. The financial statements and notes are
representations of the Company=s management who is responsible for their
integrity and objectivity. These accounting policies conform to generally
accepted accounting principles and have been consistently applied in the
preparation of the financial statements.
(a) Description of Business
The Company was organized on August 8, 1996, in the State of Colorado
for the purpose of engaging in any lawful business but it is
management's plan to seek a business combination. The Company is in a
development-stage and its intent is to operate as a capital market
access corporation and to acquire one or more existing businesses
through merger or acquisition. The Company has had no significant
business activity to date. The Company had selected August 31 as its
year end, however has elected to change its year end to December 31
effective December 31, 1998.
(b) Use of Estimates in the Preparation of Financial Statements
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.
(c) Organization Costs
Costs incurred to organize the Company include costs for professional
fees and are being amortized on a straight-line basis over a sixty
month period.
<PAGE>
BOULDER CAPITAL OPPORTUNITIES II, INC.
--------------------------------------
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
(1) Summary of Accounting Policies, Continued
(d) Income Taxes
As of December 31, 1998, the Company had net operating losses
available for carryover to future years of approximately $51,809,
expiring in 2012. Because of the change in ownership described in Note
5, the utilization of these carryforwards may be restricted. As of
December 31, 1998, the Company has deferred tax assets of
approximately $10,362 due to operating loss carryforwards. However,
because of the uncertainty of potential realization of these assets,
the Company ahs provided a valuation allowance for the entire $10,362.
Thus, no tax assets have been recorded in the financial statements as
of December 31, 1998.
(2) Basis of Presentation - Going Concern
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplates continuation
of the Company as a going concern. However, the Company has sustained
operating losses since inception and has a net working capital deficiency.
These matters raise substantial doubt about the Company=s ability to
continue as a going concern. Management is attempting to locate a business
combination candidate.
In view of these matters, continuing as a going concern is dependent upon
the Company=s ability to meet its financing requirements, raise additional
capital, and the success of its future operations or completion of a
successful business combination. Management believes that actions planned
and presently being taken to revise the Company=s operating and financial
requirements provide the opportunity for the Company to continue as a going
concern.
<PAGE>
BOULDER CAPITAL OPPORTUNITIES II, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
(3) Common Stock Issued
On August 8, 1996, the Company issued 710,000 shares of its no par value
common stock to affiliates for organizational services valued at their fair
market value of $28,400.
On August 8, 1996, the Company issued 100,000 shares of its no par value
common stock to its President at $0.0025 per share for cash of $250 and
$0.0375 per share in exchange for officer compensation of $3,750, $4,000 in
total.
On August 31, 1996, the Company issued 100,000 shares of its no par value
common stock to various investors for $4,000; 100,000 additional shares
remain subscribed for at August 31, 1996. These were collected in
September, 1996.
During the period ended August 31, 1997 the Company issued 20,200 shares of
its no par value common stock for services valued at $20,200.
(4) Related Party Transactions
Two shareholders of the Company paid expenses on behalf of the Company in
the amounts of $3,985 and $1,579 during the year ended August 31, 1998 and
the four months ended December 31, 1998, respectively, which have been
accounted for as additional paid-in capital.
(5) Change in Control
Effective December 17, 1997, the shareholders of the Company entered into
an agreement to sell 980,200 shares of their restrictive common stock to
various outside parties which resulted in a change in control of the
Company.
<PAGE>
Part III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT.
The directors and executive officers currently serving the Company are as
follows:
Name Age Positions Held and Tenure
- ---- --- -------------------------
Michael J. Delaney 40 Presiden, Secretary and Director
The director named above will serve until the next annual meeting of the
Company's stockholders. Thereafter, directors will be elected for one-year terms
at the annual stockholders' meeting. Officers will hold their positions at the
pleasure of the board of directors, absent any employment agreement, of which
none currently exists or is contemplated. There is no arrangement or
understanding between any of the directors or officers of the Company and any
other person pursuant to which any director or officer was or is to be selected
as a director or officer.
The directors and officers will devote their time to the Company's affairs
on an "as needed" basis, which, depending on the circumstances, could amount to
as little as two hours per month, or more than forty hours per month, but more
than likely will fall within the range of five to ten hours per month.
Biographical Information
Michael Delaney, President and Director. In January, 1998, he became
President, Secretary, and sole Director of the Company. Since 1980, Mr. Delaney
has also been the owner and president of MD Sales, a sales representative and
consulting firm for various companies in product development, sales, and
marketing. Mr. Delaney has served as a Director of Maui Capital Corporation from
1988 to 1995 and of Parkway Capital Corporation from 1988 to 1994.
Compliance With Section 16(a) of the Exchange Act.
To the best knowledge and belief of the Company, the Company's initial
director, officer and beneficial owner of more than 10% of the Company's
securities filed the Initial Statement of Beneficial Ownership of Securities on
Form 3, following the initial registration of the Company's securities under
Section 12(g) of the Exchange Act.
ITEM 10. EXECUTIVE COMPENSATION.
The Company's sole director received no remuneration from the Company
during the fiscal year. Until the Company acquires additional capital, the
Company's sole officer and director will receive compensation from the Company
for reimbursement only of out-of-pocket expenses, including review of any
prospective merger or acquisition candidate, incurred on behalf of the Company.
See "Certain Relationships and Related Transactions." The Company has no stock
option, retirement, pension, or profit-sharing programs for the benefit of
directors, officers or other employees, but the Board of Directors may recommend
adoption of one or more such programs in the future.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of the end of the Company's most recent
fiscal year, the number of shares of Common Stock owned of record and
beneficially by executive officers, directors and persons who hold 5.0% or more
of the outstanding Common Stock of the Company. Also included are the shares
held by all executive officers and directors as a group.
Name and Number of Shares Percent of
Address Owned Beneficially Class Owned
- ------- ------------------ -----------
Michael J. Delaney 627,965 61%
P.O. Box 890261
Temecula, California 92589
All directors and
executive officers
(1 person) 627,965 61%
<PAGE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Change of Control
On December 17, 1997, control of the Company passed to Michael Delaney, who
paid cash consideration of $11,359 for a total of 627,965 common shares of the
Company, which is a total of approximately 61% of the Registrant. Mr. Delaney
was also named the President, Secretary, and sole Director of the Company at
that time, and the former Officer and Director resigned.
Conflicts of Interest
None of the officers of the Company will devote more than a portion of his
or her time to the affairs of the Company. There will be occasions when the time
requirements of the Company's business conflict with the demands of the
officers' other business and investment activities. Such conflicts may require
that the Company attempt to employ additional personnel. There is no assurance
that the services of such persons will be available or that they can be obtained
upon terms favorable to the Company.
Although management has no current plans to cause the Company to do so, it
is possible that the Company may enter into an agreement with an acquisition
candidate requiring the sale of all or a portion of the Common Stock held by the
Company's current principal stockholders to the acquisition candidate or
principals thereof, or to other individuals or business entities, or requiring
some other form of payment to the Company's current stockholders, or requiring
the future employment of specified officers and payment of salaries to them. It
is more likely than not that any sale of securities by the Company's current
stockholders to an acquisition candidate would be at a price substantially
higher than that originally paid by such stockholders. Any payment to current
stockholders in the context of an acquisition involving the Company would be
determined entirely by the largely unforeseeable terms of a future agreement
with an unidentified business entity.
ITEM 13. EXHIBITS AND REPORTS ON FORM 10-KSB.
The Exhibits listed below are filed as part of this Annual Report.
Exhibit No. Document
- ----------- --------
3.1 Articles of Incorporation
3.2 Bylaws
4.1 Specimen Certificate
27 Financial Data Schedule
The Company filed no reports Form 8-K during the last quarter of its fiscal
year ending December 31, 1998.
Signatures
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
BOULDER CAPITAL OPPORTUNITIES II, INC.
By: /s/ Michael J. Delaney
-----------------------
Michael J. Delaney
Director, Principal Executive Officer,
Principal Financial Officer, Principal
Accounting Officer
Date: May 18, 1999
<PAGE>
U.S. Securities and Exchange Commission
Washington, D.C. 20549
---------------
FORM 10-KSB
Annual report under section 13 or 15(d) of the Securities Exchange Act of 1934
for this fiscal year ended December 31, 1998.
----------------
BOULDER CAPITAL OPPORTUNITIES II, INC.
(Name of Small Business Issuer in its charter)
EXHIBIT INDEX
Exhibit No. Document
----------- --------
3.1 * Articles of Incorporation
3.2 * Bylaws
4.1 * Specimen Certificate
* Previously filed.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AND STATEMENTS OF OPERATIONS FOUND ON PAGES 3 AND 4 OF THE COMPANY'S FORM
10-QSB FOR THE YEAR TO DATE, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 14,674
<CURRENT-LIABILITIES> 243
<BONDS> 0
0
0
<COMMON> 60,600
<OTHER-SE> (46,169)
<TOTAL-LIABILITY-AND-EQUITY> 14,674
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,547
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,547)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
