U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
X...Quarterly report under section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended March 31, 1999.
....Transition report under section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from _________ to _________.
Commission File No: 0-23871
BUFFALO CAPITAL VII, LTD.
(Name of small business in its charter)
Colorado 84-1434323
(State or other (IRS Employer Id. No.)
jurisdiction of Incorporation)
7331 S. Meadow Court,
Boulder, Colorado 80301
(Address of Principal Office) Zip Code
Issuer's telephone number: (303) 530-3353
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 ..X.. No ....
Applicable only to issuers involved in bankruptcy proceedings during the
past five years
Check whether the issuer has filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes .....
No .....
Applicable only to corporate issuers
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date. At 3/31/99 the
following shares of common were outstanding: Common Stock, no par
value, 4,620,000 shares; Class A Warrants to purchase common stock,
1,020,000; Class B Warrants to purchase common stock, 510,000.
Transitional Small Business Disclosure
Format (Check one):
Yes ..... No ..X..
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS
(a) The unaudited financial statements of registrant as of and for
the quarter ending March 31, 1999 and March 31, 1998, and for the
period from inception through March 31, 1999, follow. The financial
statements reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results for the interim
period presented.
BUFFALO CAPITAL VII, LTD.
(A Development Stage Company)
FINANCIAL STATEMENTS
Quarter Ended March 31, 1999
<PAGE>
Buffalo Capital VII, Ltd.
(A Development Stage Company)
Index to Financial Statements
Balance Sheet
Statement of Loss and Accumulated Deficit
Statements of Cash Flows
Statement of Stockholders' Equity
Notes to Financial Statements
<PAGE>
Buffalo Capital VII, Ltd.
(A Development Stage Company)
BALANCE SHEET
as of March 31, 1999
(unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 1,310
OTHER ASSETS:
Organizational costs (net
of amortization) 470
TOTAL ASSETS 1,780
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable 1,220
STOCKHOLDERS' EQUITY
Common stock, no par value;
100,000,000 shares authorized;
4,620,000 shares issued and
outstanding 32,900
Preferred stock, no par value
10,000,000 shares authorized;
no shares issued and outstanding 0
Additional paid-in capital 3,540
Deficit accumulated
during the
development stage (35,880)
Total stockholders' equity 560
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY 1,780
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Buffalo Capital VII, Ltd.
(A Development Stage Company)
STATEMENT OF LOSS AND ACCUMULATED DEFICIT
for the three months ended March 31, 1998 and March 31, 1999
and for the period from September 19, 1997 to
March 31, 1999
(unaudited)
<TABLE>
<CAPTION>
Three Three Period from
Months Months Inception
Ended Ended (9/19/97) thru
3/31/98 3/31/99 3/31/99
<S> <C> <C> <C>
INCOME - - -
EXPENSES
Legal and
professional 2,549 1,665 7,677
Advertising - - 246
Amortization 10 30 130
Rent 150 150 900
Consulting fees - - 25,400
Office expense - 40 1,527
TOTAL EXPENSES 2,709 1,885 35,880
NET LOSS (2,709) (1,885) (35,880)
Accumulated deficit
Balance, Beginning
of period (10,196) (33,995) 0
Balance, End of
period (12,905) (35,880) (35,880)
Loss per common
share (NIL) (NIL) (.01)
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING 4,080,000 4,620,000 4,364,365
</TABLE>
The accompanying notes are an integral part of these financial statements.<PAGE>
Buffalo Capital VII, Ltd.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the three months ended March 31, 1999
and the period from September 19, 1997 to March 31, 1999
(unaudited)
<TABLE>
<CAPTION>
Three Period from
Months Inception
Ended (9/19/97) thru
3/31/99 3/31/99
<S> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net Loss (1,885) (35,880)
Noncash items included
in net loss:
Amortization 30 130
Rent 150 900
Stock issued for
consulting fees - 25,400
Expenses paid by
shareholders 442 2,640
Changes in
Current
liabilities 1,103 1,220
Net cash used
by operating
activities (160) (5,590)
CASH FLOWS FROM
INVESTING ACTIVITIES:
Organization costs - (600)
Issuance of common
stock - 7,500
Net cash and cash
equivalents provided
(used) by financing
activities - 6,900
Net increase (decrease)
in cash and cash
equivalents (160) 1,310
CASH AND CASH EQUIVALENTS,
Beginning of Period 1,470 0
CASH AND CASH EQUIVALENTS,
End of Period 1,310 1,310
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Buffalo Capital VII, Ltd.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
For the period from inception (September 19, 1997)
to March 31, 1999
(page 1 of 2)
<TABLE>
<CAPTION>
Common Stock Additional
Number of Paid-in
shares Amount Capital
<S> <C> <C> <C>
Common stock issued
for services, April 1997
at $.0025 per share 3,960,000 9,900 -
Common stock issued for
cash, September 1997
at $.0625 per share 120,000 7,500 -
Common stock issued
for services, June 1998
at $.025 per share 460,000 11,500 -
Common stock issued
for services, July 1998
at $.05 per share 80,000 4,000 -
Rent provided at
no charge - - 900
Expenses paid by
shareholders - - 2,640
Net loss for the
period ended
March 31, 1999 - - -
Balance
March 31, 1999 4,620,000 32,900 3,540
</TABLE>
The accompanying notes are an integral part of these financial statements.<PAGE>
Buffalo Capital VII, Ltd.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
For the period from inception (September 19, 1997)
to March 31, 1999
(page 2 of 2)
<TABLE>
<CAPTION>
Deficit
Accumulated
during the Total
development Stockholder
stage equity
<S> <C> <C>
Common stock issued
for services, April 1997
at $.0025 per share - 9,900
Common stock issued for
cash, September 1997
at $.0625 per share - 7,500
Common stock issued
for services, June 1998
at $.025 - 11,500
Common stock issued
for services, July 1998
at $.05 - 4,000
Rent provided at
no charge - 900
Expenses paid by
shareholders - 2,640
Net loss for the period
period ended March 31, 1999 (35,880) (35,880)
Balance March 31, 1999 (35,880) 560
</TABLE>
The accompanying notes are an integral part of these financial statements.<PAGE>
Buffalo Capital VII, Ltd.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 1999
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The information including in the condensed financial statements is
unaudited, but includes all adjustments (consisting of normal recurring
items) which are, in the opinion of management, necessary for a fair
representation of the interim period presented.
Development stage company
Buffalo Capital VII, Ltd. (the "Company") was incorporated under the
laws of the State of Colorado on September 19, 1997. Its office is
located at the office of its president at 7331 South Meadow Court,
Boulder, CO 80301.
The Company is a new enterprise in the development stage as defined
by Statement No. 7 of the Financial Accounting Standards Board and
has not engaged in any business other than organizational efforts. It
has no full-time employees and owns no real property. The Company
intends to seek to acquire one or more existing businesses which have
existing management, through merger or acquisition, that may have
potential for profit, and to that end, intends to acquire properties or
businesses, or a controlling interest therein. Management of the
Company will have virtually unlimited discretion in determining the
business activities in which the Company might engage.
Accounting Method
The Company records income and expenses on the accrual method.
Fiscal year
The Company has selected a December 31 fiscal year end.
Loss per share
Loss per share was computed using the weighted number of shares
outstanding during the period.
Organization costs
Costs to incorporate the Company have been capitalized and will be
amortized over a sixty-month period.
Statement of cash flows
For purposes of the statement of cash flows, the Company considers
all highly liquid debt instruments purchased with an original maturity
of three months or less to be cash equivalents.
Use of Estimates
The preparation of the Company's financial statements in conformity
with generally accepted accounting principles requires the Company's
management to make estimates and assumptions that effect the
amounts reported in these financial statements and accompanying
notes. Actual results could differ from those estimates.
Stock basis
Shares of common stock issued for other than cash have been assigned
amounts equivalent to the fair value of the service or assets received
in exchange.
2. STOCKHOLDERS' EQUITY
As of March 31, 1999, a total of 4,620,000 shares of common stock
were issued and outstanding. A total of 495,000 Units were issued
pursuant to the terms of a Pre-Incorporation Consultation and
Subscription Agreement dated April 1, 1997. The Units were issued
for consideration consisting of preincorporation services by directors
and promoters valued at $.0025 per Unit (or a total of $3,300 per
person). Each of the units consisted of one share of common stock,
two Class A Warrants to purchase common stock for $2.00 per share,
and one Class B Warrant to purchase common stock for $4.00 per
share. Issuance of the Units was approved in the organizational
consent dated September 20, 1997. Pursuant to a Consent of
Directors dated September 30, 1997, an additional 5,000 Units were
issued to each of three shareholders. These Units were issued for
cash consideration of $.125 per Unit, or a total of $2,500 per person.
On December 15, 1997, the Board of Directors authorized a 2-for-1
stock split, increasing the number of issued and outstanding shares
and decreasing the stock basis by half. The number of outstanding
warrants was not changed. On June 1, 1998, the Board of Directors
authorized the issuance of 115,000 shares of common stock for
consideration consisting of consulting services valued at $0.10 per
share (or a total of $11,500). On July 17, 1998, the Board of
Directors authorized a 4-for-1 stock split, thereby increasing the
number of issued and outstanding shares to 4,540,000 and decreasing
the stock basis by three quarters. On July 20, 1998, the Board of
Directors authorized the issuance of 80,000 shares of common stock
for consideration consisting of legal services valued at $0.05 per share
(or a total of $4,000), thereby increasing the total number of shares of
common stock issued and outstanding to 4,620,000 (as of March 31,
1999). All references in the accompanying financial statements to the
number of common shares and per share amounts have been restated
to reflect the stock splits.
Preferred Stock: The Company's Certificate of Incorporation
authorizes the issuance of 10,000,000 shares of preferred stock, no par
value per share. The Board of Directors of the Company is authorized
to issue preferred stock from time to time in series and is further
authorized to establish such series, to fix and determine the variations
in the relative rights and preferences and between the series, and to
allow for the conversion of preferred stock into common stock. No
preferred stock has been issued by the Company.
3. RELATED PARTY TRANSACTIONS
The Company's directors and officers are also principal shareholders.
Each has received approximately 32% of the outstanding shares. In
each case, the shares were issued for services provided which have
been valued at $6,600.
The Company's general and securities counsel, Gary Joiner, a partner
in the law firm of Frascona, Joiner & Goodman, P.C., is one of the
Company's principal shareholders. Since inception, the Company has
paid $4,425 for legal services rendered, $600 of which was capitalized
as organizational costs, with $-0- payable at March 31, 1999.
The President of the Company is providing office space at no charge
to the Company. For purposes of the financial statements, the
Company is accruing $50 per month as additional paid-in capital for
this use.
As of March 31, 1999, various expenses totaling $2,640 were paid for
by the shareholders of the Company. Additional paid-in capital was
increased to reflect these payments.
4. SUPPLEMENTAL DISCLOSURE OF NON-CASH
FINANCING ACTIVITIES
As mentioned in Note 3, the Company has incurred $900 since
inception in rent expense which has been designated as paid-in capital.
Similarly, the Company recorded amortization of the organizational
costs of $130.
5. INCOME TAXES
The Company has Federal net operating loss carryforwards of
approximately $35,800 expiring in the year 2013. The tax benefit of
these net operating losses, which totals approximately $6,800, has been
offset by a full allowance for realization. This carryforward may be
limited upon the consummation of a business combination under IRC
Section 381.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION
Liquidity and Capital Resources.
The Company remains in the development stage, and since inception,
has experienced no significant change in liquidity or capital resources
or stockholders' equity other than the receipt of net proceeds in the
amount of $7,500 from its inside capitalization funds. Consequently,
the Company's balance sheet for the period of March 31, 1999,
reflects a current asset value of $1,310 in the form of cash, a total
asset value of $1,780, which includes cash and organizational costs
which have been capitalized, and current liabilities of $1,220.
The Company will carry out its plan of business to seek out and take
advantage of business opportunities that may have potential for profit,
and acquire such businesses, or a controlling interest therein. The
Company cannot predict to what extent its liquidity and capital
resources will be diminished prior to the consummation of a business
combination or whether its capital will be further depleted by the
operating losses (if any) of the business entity which the Company
may eventually acquire.
Results of Operations.
During the period from September 19, 1997 (inception) through March
31, 1999, the Company has engaged in no significant operations other
than the acquisition of capital and registering its securities under the
Securities and exchange Act of 1934, as amended. No revenues were
received by the Company during this period. The Company has
experienced a net loss of $35,880 since inception. This loss is
primarily the result of legal and accounting costs of compliance with
the reporting requirements of the securities laws and issuance of stock
to the Company's officers and directors and other non-management
principal shareholders for consulting services related to organization of
the Company and development of its business plan.
For the current fiscal year, the Company anticipates an increased net
loss owing to expenses associated with locating and evaluating
acquisition candidates. The Company anticipates that until a business
combination is completed with an acquisition candidate, it will not
generate revenues, and may continue to operate at a loss after
completing a business combination, depending upon the performance
of the acquired business.
Irrespective of whether the Company's cash assets prove to be
inadequate to meet the Company's operational needs, the Company
might seek to compensate providers of services by issuance of stock in
lieu of cash.
Need for Additional Financing.
The Company believes that its existing capital will be sufficient to
meet the Company's cash needs, including the costs of compliance
with the continuing reporting requirements of the Securities Exchange
Act of 1934, as amended, for approximately three months. Thereafter,
the company will require additional working capital unless it has
completed a business combination. Thus, there is no assurance that
the available funds will ultimately prove to be adequate for the
Company's operations. Although no commitments to provide funds
have been made by management or other stockholders, it is anticipated
that the Company would seek loans or additional capital contributions
from its existing principal shareholders in the event it requires
additional working capital. However, there can be no assurance that
other funds will be available to cover the Company's expenses.
Year 2000 issues are not currently material to the Company's
business, operations or financial condition, and the Company does not
currently anticipate that it will incur any material expenses to
remediate Year 2000 issues it may encounter. However, Year 2000
issues may become material to the Company following its completion
of a business combination transaction. In that event, the Company will
be required to adopt a plan and a budget for addressing such issues.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE
HARBOR" PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. Except for historical matters,
the matters discussed in the Management Discussion and Analysis
portion of this Form 10-QSB are forward-looking statements based on
current expectations, and involve risks and uncertainties. Forward-
looking statements include, but are not limited to, statements relating
to the effort to seek business opportunities, the need for additional
financing, the possibility of generating revenue from operations, and
the like.
The Company wishes to caution the reader that there are many
uncertainties and unknown factors which could affect its ability to
carry out its business plan in the manner described herein.
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBIT 27 - FINANCIAL DATA SCHEDULE
(b) There have been no reports on Form 8-K for the quarter
ending March 31, 1999.
Signatures
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BUFFALO CAPITAL VII, LTD.
(Registrant)
Date: May 17, 1999
/s/_______________________________
Grant Peck, President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 1,310
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,780
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,780
<CURRENT-LIABILITIES> 1,220
<BONDS> 0
0
0
<COMMON> 32,900
<OTHER-SE> 3,540
<TOTAL-LIABILITY-AND-EQUITY> 1,780
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,885
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,885)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,885)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
