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 Ex-
change 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: 0-23867
BUFFALO CAPITAL V, LTD.
(Name of small business in its charter)
Colorado 84-1434324
(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, the three months ending 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 V, LTD.
(A Development Stage Company)
FINANCIAL STATEMENTS
Quarter Ended March 31, 1999
<PAGE>
Buffalo Capital V, 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 V, Ltd.
(A Development Stage Company)
BALANCE SHEET
as of March 31, 1999
(unaudited)
<TABLE>
<CAPTION>
March 31, 1999
<S> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 981
OTHER ASSETS:
Organizational costs (net
of amortization) 470
TOTAL ASSETS 1,451
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable 1,524
STOCKHOLDERS' EQUITY
Common stock, no par value;
100,000,000 shares authorized;
1,135,000 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 19,106
Deficit accumulated
during the
development stage (52,079)
Total stockholders' equity (73)
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY 1,451
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Buffalo Capital V, 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 2,678 3,497 24,127
Advertising - - 246
Amortization 10 30 130
Rent 150 150 900
Consulting fees - - 25,400
Office and bank
expense - 42 1,276
TOTAL EXPENSES 2,838 3,719 52,079
NET LOSS (2,838) (3,719) (52,079)
Accumulated deficit
Balance, Beginning
of period (10,184) (48,360) 0
Balance, End of
period (13,022) (52,079) (52,079)
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 V, Ltd.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
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>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net Loss (2,838) (3,719) (52,079)
Noncash items included
in net loss:
Amortization 10 30 130
Rent 150 150 900
Stock issued for
consulting fees - - 25,400
Expenses paid by
shareholders - 1,966 18,206
Changes in
Current
liabilities 1,250 1,395 1,524
Net cash used
by operating
activities (178) (1,420) (5,919)
CASH FLOWS FROM
INVESTING ACTIVITIES:
Organization costs (600) - (600)
Issuance of common
stock - - 7,500
Net cash and cash
equivalents provided
(used) by financing
activities (600) - 6,900
Net increase (decrease)
in cash and cash
equivalents (2,028) (178) 981
CASH AND CASH EQUIVALENTS,
Beginning of Period 7,366 1,159 0
CASH AND CASH EQUIVALENTS,
End of Period 5,338 981 981
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Buffalo Capital V, 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 - - 18,206
Net loss for the
period ended
March 31, 1999 - - -
Balance
March 31, 1999 4,620,000 32,900 19,106
</TABLE>
The accompanying notes are an integral part of these financial statements.<PAGE>
Buffalo Capital V, 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 service, June 1998
at $.025 per share - 11,500
Common stock issued
for service
July 1998 at
$.05 per share - 4,000
Rent provided at
no charge - 900
Expenses paid by
shareholders - 18,206
Net loss for the
period ended
March 31, 1999 (52,079) (52,079)
Balance March 31, 1999 (52,079) (73)
</TABLE>
The accompanying notes are an integral part of these financial statements.<PAGE>
Buffalo Capital V, 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 V, 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.
Account Method
The Company records income and expenses on the accrual method.
Fiscal year
The Company has selected an 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. MERGER AGREEMENT
Effective November 23, 1998 the Company entered into an Agreement
and Plan of Merger and Reorganization (the "Agreement") with
Aladdin Oil Corporation ("Aladdin"), an independent oil and gas
company engaged in the acquisition and exploration of oil and gas
within the United States.
The Agreement provides that the Company will have a total of
406,099 shares outstanding immediately prior to completion of the
merger transaction. This will be accomplished through a 1 for 2
reverse stock split, followed by the surrender and cancellation of
1,903,901 outstanding common shares by certain of the Company's
shareholders, including its officers, directors and affiliates. Aladdin
will be merged into the Company, with the Company as the surviving
corporation. The Company will change its name to Aladdin Oil
Corporation.
To effect the merger, the Company will issue 3,718,320 shares of
newly issued common stock (approximately 90.15% of the post-merger
outstanding shares) to the current shareholders of Aladdin. The
Company will also cancel all currently outstanding A and B warrants.
In addition, the Company will authorize the issuance of 1,677,000
shares of a new Series A Convertible Preferred stock, 1,088,500 new
Class A Warrants, 1,688,000 new Class B Warrants, and 417.6 Units,
each of which consists of a 12% Convertible Debenture in the face
amount of $1000, 625 Class A Warrants and 625 Class B Warrants,
and will issue such securities on a one-for-one basis to existing holders
of like securities of Aladdin.
The Series A Preferred to be issued in the merger provides for a 12%
per year dividend through June 30, 1999, caries a $.075 liquidation
preference, and each Preferred share is convertible into a single share
of common stock at the option of the holder. The Class A and Class
B Warrants will entitle the holder to purchase common shares at $1.50
and $1.00 per share, respectively, through December 31, 1999. Each
Convertible Debenture will bear interest at 12% for the first year of
issuance only, and will be convertible into common at the rate of 1.25
shares for each $1.00 of face value of the Debentures, Class A
Warrants, and Class B Warrants.
A finders fee of $10,000 is due and payable by the Company at the
close of the merger.
3. STOCKHOLDERS' EQUITY
Common stock: As of March 31, 1999, 4,620,000 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 consists 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 the Consent of
Directors dated September 30, 1997, an additional 20,000 Units were
issued to each of three shareholders 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 issuance and outstanding shares
and decreasing the stock basis by half. The number of outstanding
warrants was not changed. 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 4,620,000 and decreasing the stock
basis by three quarters. The number of outstanding warrants was not
changed. 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 as between the series, and to
allow for the conversion of preferred stock into common stock. No
preferred stock has been issued by the Company.
4. 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 $20,073 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.
5. SUPPLEMENTAL DISCLOSURE OF NON-CASH
FINANCING ACTIVITIES
As mentioned in Note 4, the Company has incurred $900 since
inception in rent expense which has been designated as pain-in capital.
Similarly, the Company recorded amortization of the organizational
costs of $130.
6. INCOME TAXES
The Company has Federal net operating loss carryforwards of
approximately $52,079 expiring in the year 2013. The tax benefit of
these net operating losses, which totals approximately $9,900, 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.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION
The Company remains in the development stage and, since
inception, has experienced no significant change in liquidity or capital
resources or stockholder's equity other than the receipt of proceeds in
the amount of $7,500 from its inside capitalization funds, and the
expenditure of such funds in furtherance of the Company's business
plan, including primarily expenditure of funds to pay legal and
accounting expenses. Consequently, the Company's balance sheet for
the quarter ended March 31, 1999, reflects a current asset value of
$981 in the form of cash, and a total asset value of $1,451.
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 organizational activities, acquisition of capital, preparation
and filing of the registration of its securities under the Securities
Exchange Act of 1934, as amended, compliance with its periodical
reporting requirements, and efforts to locate a suitable merger or
acquisition candidate. No revenues were received by the Company
during this period. However, during this period the Company did
enter into an Agreement and Plan of Reorganization with Aladdin Oil
pursuant to which it is anticipated that the Company will complete a
merger transaction on or about June 1, 1999.
In the event the Company does not complete the proposed
merger transaction with Aladdin Oil Corporation, it anticipates that for
the fiscal year ending December 31, 1999, it will incur a loss as a
result of expenses associated with compliance with the reporting
requirements of the Securities Exchange Act of 1934, and expenses
associated with locating and evaluating acquisition candidates.
Until the Company completes a business acquisition transaction
it is not expected to generate revenues. In the event the Company
completes the proposed merger transaction with Aladdin Oil
Corporation on or about June 1, 1999, it is anticipated that the
Company will generate revenues during the fiscal year, although
current management is not in a position to estimate or to determine the
prospective level of revenue. The Company may nevertheless
continue to operate at a loss after completing a business combination,
depending upon the performance of the acquired business.
Need for Additional Financing
In the event the Company does not complete the proposed
merger transaction with Aladdin Oil Corporation it will require
additional capital in order to meet its cash needs for the next year,
including the costs of compliance with the continuing reporting
requirements of the Securities Exchange Act of 1934, as amended.
No specific commitments to provide additional funds have been
made by management or other stockholders, and the Company has no
current plans, proposals, arrangements or understandings with respect
to the sale or issuance of additional securities prior to the location of a
merger or acquisition candidate. Accordingly, there can be no
assurance that any additional funds will be available to the Company
to allow it to cover its expenses. Notwithstanding the foregoing, to the
extent that additional funds are required, the Company anticipates
receiving such funds in the form of advancements from current
shareholders without issuance of additional shares or other securities,
or through the private placement of restricted securities rather than
through a public offering. The Company does not currently
contemplate making a Regulation S offering.
In the event the Company completes the proposed merger
transaction with Aladdin Oil Corporation, its needs for additional
capital will change. Current management has no basis upon which to
determine the possible capital needs of the Company following
completion of the contemplated merger transaction.
The Company may also seek to compensate providers of
services by issuances of stock in lieu of cash. For information as to
the Company's policy in regard to payment for consulting services, see
"Certain Relationships and Transactions."
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 possible merger transaction with Aladdin Oil, 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) One report on Form 8-K was filed during the quarter
ended March 31, 1999. The report was dated July 23, 1998 and was
filed to report the execution of a letter of intent with Aladdin Oil
Corporation regarding a possible business combination.
Signatures
In accordance with the requirements of the Exchange Act, the regis-
trant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
BUFFALO CAPITAL V, 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> 981
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 981
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,451
<CURRENT-LIABILITIES> 1,524
<BONDS> 0
0
0
<COMMON> 32,900
<OTHER-SE> 19,106
<TOTAL-LIABILITY-AND-EQUITY> 1,451
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,719)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,719)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,719)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
