U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
(Mark One)
X____Annual report under section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1998.
_____Transition report under section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ____ to ____.
Commission File No: 0-23873
BUFFALO CAPITAL VIII, LTD.
(Name of small business in its charter)
Colorado 84-1434321
__________________________________________________________
(State or other (IRS Employer Identification
jurisdiction of Incorporation) No.)
7331 S. Meadow Court
__________________________________________________________
Address of Principal Executive Office (street and number)
Boulder, Colorado 80301
__________________________________________________________
City, State and Zip Code
(Issuer's telephone number: (303)530-3353
Securities to be registered under Section 12(b) of the Act:
Title of each class
__________________________________________________________
N/A
Securities to be registered under Section 12(g) of the Act:
Common Stock, no par value
(Title of Class)
Class A Warrants to Purchase Common Stock
(Title of Class)
Class B Warrants to Purchase Common Stock
(Title of class)
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 ____
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B 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. ___
State issuer's revenue for its most recent fiscal year: $ -0-
State the aggregate market value of the voting stock held by non-
affiliates computed by reference to the price at which the stock was
sold, or the average bid and asked priced of such stock, as of a speci-
fied date within the past 60 days (See definition of affiliate in Rule
12b-2): -0-
Note: If determining whether a person is an affiliate will involve an
unreasonable effort and expense, the issuer may calculate the aggregate
market value of the common equity held by non-affiliates on the basis
of reasonable assumptions, if the assumptions are stated.
(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 registrants) State the number of shares
outstanding of each of the issuer's classes of common equity, as of the
latest practicable date: 1,135,000 as of March 31, 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.
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
General
The Company was incorporated under the laws of the State of
Colorado on September 19, 1997, and is in the early developmental
and promotional stages. To date the Company's only activities have
been organizational ones, directed at the raising of capital, and prelimi-
nary efforts to seek one or more properties or businesses for acquisi-
tion. The Company has not commenced any commercial operations.
The Company has no full-time employees and owns no real estate.
The Company's business plan is to seek, investigate, and, if
warranted, acquire one or more properties or businesses. Such an
acquisition 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.
As of the end of its fiscal year ending December 31, 1998, 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. During the
fiscal year ending December 31, 1998, the Company's officers and
directors had preliminary contacts with representatives of numerous
companies concerning the general possibility of a merger or acquisition
by an entity like the Company, whose shares are registered under the
Securities Exchange Act of 1934. However, none of these preliminary
contacts or discussions has, as yet, resulted in any type of agreement.
It is anticipated that the Company's officers and directors will
continue to initiate contacts with securities broker-dealers and other
persons engaged in other aspects of corporate finance to advise them
of the Company's existence and to determine if the companies or
businesses they represent have an interest in considering a merger or
acquisition with the Company. No assurance can be given that the
Company will be successful in finding or acquiring a desirable busi-
ness opportunity, given the limited funds that are expected to be
available for acquisitions, 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 corpo-
rations 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 or on an exchange
such as the American or Pacific Stock Exchange. (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 combi-
nation of the characteristics mentioned in (i) through (iv). The Com-
pany 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 in-
vestment 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 develop-
ment, 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.
As a consequence of the Company's registration of its securities
under the Securities Exchange Act of 1934, any entity which has an
interest in being acquired by the Company is expected to be an entity
that desires to become a public company as a result of the transaction.
In connection with such an acquisition, it is highly likely that an
amount of stock constituting control of the Company would be issued
by the Company or purchased from the Company's current principal
shareholders by the target entity or its controlling shareholders.
It is anticipated that business opportunities will come to the
Company's attention from various sources, including its officers and
directors, its other stockholders, professional advisors such as attorneys
and accountants, securities broker-dealers, venture capitalists, members
of the financial community, and others who may present unsolicited
proposals. The Company has no plans, understandings, agreements, or
commitments with any individual for such person to act as a finder of
opportunities for the Company.
Investigation and Selection of Business Opportunities
To a large extent, a decision to participate in a specific business
opportunity may be made upon management's analysis of the quality
of the other company's management and personnel, the anticipated
acceptability of new products or marketing concepts, the merit of
technological changes, and numerous other factors which are difficult,
if not impossible, to analyze through the application of any objective
criteria. In many instances, it is anticipated that the historical opera-
tions of a specific firm may not necessarily be indicative of the poten-
tial for the future because of the possible need to shift marketing
approaches substantially, expand significantly, change product empha-
sis, change or substantially augment management, or make other
changes. Because of the lack of training or experience of the Com-
pany's management, the Company will be dependent upon the owners
of a business opportunity to identify such problems and to implement,
or be primarily responsible for the implementation of, required chang-
es. Because the Company may participate in a business opportunity
with a newly organized firm or with a firm which is entering a new
phase of growth, it should be emphasized that the Company will incur
further risks, because management in many instances will not have
proved its abilities or effectiveness, the eventual market for such
company's products or services will likely not be established, and such
company may not be profitable when acquired.
It is anticipated that the Company will not be able to diversify,
but will essentially be limited to one such venture because of the
Company's limited financing. This lack of diversification will not
permit the Company to offset potential losses from one business
opportunity against profits from another, and should be considered an
adverse factor affecting any decision to purchase the Company's
securities.
The analysis of business opportunities will be undertaken by or
under the supervision of the Company's executive officers and
directors. Although there are no current plans to do so, Company
management might hire an outside consultant to assist in the
investigation and selection of business opportunities, and in that event,
might pay a finder's fee. Since Company management has no current
plans to use any outside consultants or advisors to assist in the
investigation and selection of business opportunities, no policies have
been adopted regarding use of such consultants or advisors, the criteria
to be used in selecting such consultants or advisors, the services to be
provided, the term of service, or regarding the total amount of fees
that may be paid. However, because of the limited resources of the
Company, it is likely that any such fee the Company agrees to pay
would be paid in stock and not in cash. Otherwise, the Company
anticipates that it will consider, among other things, the following
factors:
(1) Potential for growth and profitability, indicated by new
technology, anticipated market expansion, or new products;
(2) Strength and diversity of existing management, or
management prospects that are scheduled for recruitment;
(3) Capital requirements and anticipated availability of
required funds, to be provided from operations, through the sale of
additional securities, through joint ventures or similar arrangements, or
from other sources; and
(4) The Company's perception of how any particular business
opportunity will be received by the investment community and by the
Company's stockholders;
(5) The availability of audited financial statements for the
business opportunity; and
(6) 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.
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 the 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.
The Company is unable to predict when it may participate in a
business opportunity and it has not established any deadline for
completion of a transaction. It expects, however, that the process of
seeking candidates, analysis of specific proposals and the selection of a
business opportunity may require several additional months or more.
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 equity 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.
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. 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 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 up to 80% of the common stock of the combined entities immedi-
ately 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
stockholders in such circumstances 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").
It is anticipated that any securities issued in any reorganization
would be issued in reliance upon exemptions, if any are available,
from registration under applicable federal and state securities laws. In
some circumstances, however, as a negotiated element of the
transaction, the Company may agree to register such securities either at
the time the transaction is consummated, or under certain conditions or
at specified times thereafter. The issuance of substantial additional
securities and their potential sale into any trading market that might
develop in the Company's securities may have a depressive effect upon
such market.
The Company will participate in a business opportunity only
after the negotiation and execution of a written agreement. Although
the terms of such agreement cannot be predicted, generally such an
agreement would require specific representations and warranties by all
of the parties thereto, specify certain events of default, detail the terms
of closing and the conditions which must be satisfied by each of the
parties thereto prior to such closing, outline the manner of bearing
costs if the transaction is not closed, set forth remedies upon default,
and include miscellaneous other terms.
Employees
The Company is a development stage company and currently
has no employees. Management of the Company expects to use
consultants, attorneys and accountants as necessary, and does not anti-
cipate a need to engage any full-time employees so long as it is
seeking and evaluating business opportunities. The need for em-
ployees and their availability will be addressed in connection with the
decision whether or not to acquire or participate in specific business
opportunities. No remuneration will be paid to the Company's officers
except as set forth under "Executive Compensation" and under "Certain
Relationships and Related Transactions."
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 this Form 10-KSB are forward-looking
statements based on current expectations, and involve risks and
uncertainties. Forward-looking statements include, but are not limited
to, statements under the following headings:
(i) "Description of Business - General" - the general
description of the Company's plan to seek a merger or acquisition
candidate, and the types of business opportunities that may be pursued.
(ii) "Description of Business - Investigation and Selection of
Business Opportunities" - the steps which may be taken to investigate
prospective business opportunities, and the factors which may be used
in selecting a business opportunity.
(iii) "Description of Business - Form of Acquisition" - the
manner in which the Company may participate in a business
acquisition.
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.
ITEM 2. DESCRIPTION OF PROPERTY.
The Company currently has no investments in real estate, real
estate mortgages, or real estate securities, and does not anticipate
making any such investments in the future. The Company does not
currently maintain an office or any other facilities. It does currently
maintain a mailing address at 7331 S. Meadow Court, Boulder,
Colorado 80301, which is the address of its President. The Company
pays no rent for the use of this mailing address, however, for financial
statement purposes, the Company is accruing $50 per month as
additional paid-in capital for this use. The Company does not believe
that it will need to maintain an office at any time in the foreseeable
future in order to carry out its plan of operations described herein.
The Company's telephone number is (303) 530-3353.
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 5.0% 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.
Part II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
There is not currently a public trading market for the
Company's shares. It is not anticipated that any actual trading activity
will occur until the Company has completed a merger or acquisition
transaction. The Company's securities are currently held of record by
a total of approximately 48 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 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 fiscal year ended December 31, 1998, reflects a current asset value
of $1,502 in the form of cash, and a total asset value of $2,002.
Results of Operations
During the period from September 19, 1997 (inception) through
December 31, 1998, 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.
For the fiscal year ending December 31, 1999, the Company
anticipates incurring 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. The Company anticipates that until a business
combination is completed with an acquisition candidate, it will not
generate revenues. It may also continue to operate at a loss after
completing a business combination, depending upon the performance
of the acquired business.
Need for Additional Financing
The Company 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.
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.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS.
BUFFALO CAPITAL VIII, LTD.
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 1998
Index to Financial Statements
Report of Independent Certified Public Accountant
Balance Sheet
Statement of Loss and Accumulated Deficit
Statement of Stockholders' Equity
Statements of Cash Flows
Notes to Financial Statements
<PAGE>
The Board of Directors and Stockholders of
Buffalo Capital VIII, Ltd.
We have audited the accompanying balance sheet of Buffalo Capital
VIII, Ltd. (a development state company) as of December 31, 1998,
and the related statements of loss and accumulated deficit, cash flows,
and stockholders' equity for the year ended December 31, 1998, the
initial period ended December 31, 1997, and for the period from
inception (September 19, 1997) to 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 audit
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 Buffalo Capital
VIII, Ltd. (a development stage company) as of December 31, 1998,
and the results of its operations and its cash flows for the year ended
December 31, 1998, the initial period ended December 31, 1997, and
for the period from inception (September 19, 1997) to December 31,
1998, in conformity with generally accepted accounting principles.
Comiskey and Company P.C.
Denver, Colorado
January 29, 1999<PAGE>
Buffalo Capital VIII, Ltd.
(A Development Stage Company)
BALANCE SHEET
as of December 31, 1998
<TABLE>
<CAPTION>
December 31, 1998
<S> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 1,502
Total current assets: 1,502
OTHER ASSETS:
Organizational costs (net
of amortization) 500
TOTAL ASSETS 2,002
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable 116
Total current liabilities 116
STOCKHOLDERS' EQUITY
Common stock, no par value;
100,000,000 shares authorized;
1,135,000 shares issued and
outstanding at December 31, 1998
28,900
Preferred stock, no par value
10,000,000 shares authorized;
no shares issued and outstanding -
Additional paid-in capital 1,953
Deficit accumulated
during the
development stage (28,967)
Total stockholders' equity 1,886
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY 2,002
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
Buffalo Capital VIII, Ltd.
(A Development Stage Company)
STATEMENT OF LOSS AND ACCUMULATED DEFICIT
<TABLE>
<CAPTION>
Period For the
9/19/97 For the initial period
(Inception) year ended ended
to 12/21/98 12/31/98 12/31/97
<S> <C> <C> <C>
REVENUES
Investment income - - -
EXPENSES
Advertising 246 246 -
Amortization 100 100 -
Consulting fees 21,400 11,500 9,900
Legal and
accounting 4,987 4,858 129
Office expense 1,473 1,456 17
Bank charges 11 11 -
Rent expense 750 600 150
TOTAL EXPENSES 28,967 18,771 10,196
NET LOSS (28,967) (18,771) (10,196)
Accumulated deficit
Balance, Beginning
of period - (10,196) -
Balance, End of
period (28,967) (28,967) (10,196)
NET LOSS PER
SHARE (0.03) (0.03) (0.01)
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING 1,049,071 1,087,110 1,020,000
</TABLE>
The accompanying notes are an integral part of the financial statements.<PAGE>
Buffalo Capital VIII, Ltd.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
For the period from inception (September 19, 1997)
to December 31, 1998
(page 1 of 2)
<TABLE>
<CAPTION>
Common Stock Additional
Number of Paid-in
shares Amount Capital
<S> <C> <C> <C>
Common stock issued
for service,
April 1997
at $.01
per share 990,000 9,900 -
Common stock issued
for cash,
September 1997
at $.25
per share 30,000 7,500 -
Rent provided at
no charge - - 150
Net loss for the
period ended
December 31, 1998 - - -
Balance
12/31/97 1,020,000 17,400 150
Common stock issued
for services,
June 1998 at
.1 per share 115,000 11,500 -
Rent at no charge
for 1998 - - 600
Expenses paid by
shareholders
December 1998 - - 1,203
Net loss for the
period ended
December 31, 1998 - - -
Balance
December 31, 1998 1,135,000 28,900 1,953
</TABLE>
The accompanying notes are an integral part of these financial statements.<PAGE>
Buffalo Capital VIII, Ltd.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
For the period from inception (September 19, 1997)
to December 31, 1998
(page 2 of 2)
<TABLE>
<CAPTION>
Deficit
Accumulated
during the Total
development stockholders'
stage equity
<S> <C> <C>
Common stock issued
for service, April 1997
at $.01 per share - 9,900
Common stock issued for
cash, September 1997
at $.25 per share - 7,500
Rent provided at
no charge - 150
Net loss for the
period ended
December 31, 1997 (10,196) (10,196)
Balance 12/31/97 (10,196) 7,354
Common stock issued
for services,
June 1998 at
.1 per share - 11,500
Rent at no charge
for 1998 - 600
Expenses paid by
shareholders
December 1998 - 1,203
Net loss for the
period ended
December 31, 1998 (18,771) (18,771)
Balance
December 31, 1998 (28,967) 1,886
</TABLE>
The accompanying notes are an integral part of these financial statements.<PAGE>
Buffalo Capital VIII, Ltd.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Period For For the
9/19/97 the year initial
(inception)to ended period
December December December
31, 1998 31, 1998 31, 1997
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net Loss (27,764) (18,771) (10,196)
Adjustments to reconcile
net loss to cash used
by operating activities:
Amortization 100 100 -
Rent expense 750 600 150
Stock issued for
consulting fees 11,500 11,500 -
Expenses paid by
shareholders 9,900 1,203 9,900
Changes in
Current
liabilities 116 116 -
Net cash used
by operating
activities (5,398) (5,252) (146)
CASH FLOWS FROM
INVESTING ACTIVITIES:
Organization costs (600) (600) -
Net cash provided
by investing
activities (600) (600) -
CASH FLOWS FROM
FINANCING ACTIVITIES:
Issuance of
common stock 7,500 - 7,500
Net cash provided
by financing
activities 7,500 - 7,500
Net increase (decrease)
in cash and cash
equivalents 1,502 (5,852) 7,354
CASH AND CASH EQUIVALENTS,
Beginning of Period - 7,354 -
CASH AND CASH EQUIVALENTS,
End of Period 1,502 1,502 7,354
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
Buffalo Capital VIII, Ltd.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Development stage company
Buffalo Capital VIII, Ltd. (a development stage company)(the "Company") was
incorporated under the laws of the State of Colorado on September 19, 1997.
The initial registered office of the Company is 4750 Table Mesa Drive,
Boulder, Colorado 80303. The initial principal office of the corporation is
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 operate as a
capital market access corporation by registering with the U.S. Securities and
Exchange Commission under the Securities Act of 1934. After this, the
Company intends to seek to acquire one or more existing businesses which
have existing management, through merger or acquisition. 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.
Loss per share
Loss per share was computed using the weighted number of shares outstanding
during the 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 December 31, 1998, a total of 1,135,000 shares of common stock were
issued and outstanding along with 1,020,000 Class A warrants and 510,000
Class B warrants entitling the holder to purchase one share of stock for $2.00
and $4.00 respectively. Warrants are exercisable through December 31, 2003.
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 the 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). 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 services 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.
3. RELATED PARTY TRANSACTIONS
The Company's directors and officers are also principal shareholders. Each
controls 327,200 - 327,400 shares of stock (approximately 29% each of the
outstanding shares). In each case, the shares were issued for services provided
which have been valued at $6,600.
Gary Joiner, corporate counsel who is not an officer or director, owns 327,400
shares and is one of the principal shareholders of the Company. His shares
were issued for services valued at $3,300. He has been paid a total of $3,378
for legal services rendered, of which $600 was capitalized as organizational
costs.
Rent is being provided to the Company at no charge. For purposes of the
financial statements, the Company is accruing $50 per month as additional
paid-in capital for this use.
For the year ended December 31, 1998, various expenses totaling $1,203 were
paid for by the shareholders of the Company. Additional paid in capital was
increased to reflect these payments.
4. INCOME TAXES
The Company has Federal net operating loss carryforwards of approximately
$28,000 expiring in the year 2013. The tax benefit of these net operating
losses, which totals approximately $5,000, 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. For the period ended December
31, 1998, the valuation allowance increased by $3,000.
5. SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING
ACTIVITIES
The Company recorded rent expense for the year ended December 31, 1998 of
$50 per month for a total of $600.
Common stock was issued for consulting and/or legal services on the following
dates: April, 1997, 990,000 shares at .01 per share ($9,900); and June, 1998,
115,000 shares at .1 per share ($11,500).
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUN-
TANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
The Company has had no change in, or disagreements with, it's
principal independent accountant since the date of inception.
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:
<TABLE>
<CAPTION>
Name Age Positions Held
and Tenure
<S> <C> <C>
Grant W. Peck 43 President and a
Director since
September, 1997
Dean F. Sessions 47 Secretary, Treasurer,
and a Director since
September, 1997
</TABLE>
The directors 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
Grant W. Peck.
Mr. Peck has served as President and a Director of the Company since
its inception.
Mr. Peck was the principal shareholder, the President and a Director of
J. S. Grant's, Inc., doing business as Just Squeezed Juices, from its inception
in 1985 until January, 1995, when the Company was sold. J.S. Grant's
distributed fresh juices from Denver, Colorado, to five states, and had
approximately $3.5 million in annual sales and 36 employees. Between 1977 and
1984, Mr. Peck was an owner and Director of Operations for the Harvest
Restaurant and Bakery, a restaurant company that catered to the then emerging
health-conscious market. During his tenure with Harvest Restaurant and Bakery,
Mr. Peck was responsible for the growth and daily operation of the restaurant
company, employing over 385 employees and staffing 28 managers.
Mr. Peck has been the President and a director of Buffalo Capital III,
Ltd., and Buffalo Capital IV, Ltd, both of which are Colorado corporations,
since their inception in August, 1996. He has also been the President and a
director of Buffalo Capital V, Ltd, Buffalo Capital VI, Ltd., and Buffalo
Capital VII, Ltd., all of which are Colorado corporations, since their inception
in September, 1997. All of these entities are in the same business as the
Company (blind pool or public shell companies).
Mr. Peck attended the University of Colorado and Macalester College in
St. Paul, Minnesota, but did not receive a degree from either institution.
Dean F. Sessions.
Mr. Sessions has served as Secretary and Treasurer, and as a Director of
the Company since its inception.
From 1973 through 1982 Mr. Sessions was employed as an investment
broker by E. F. Hutton & Co., in its Boulder, Colorado office. From 1982
through 1986 Mr. Sessions was an officer, director and principal shareholder of
A. S. Food Company, Inc., a Colorado corporation formed to acquire the
franchise rights for Round The Corner restaurants in Oregon, Washington and
British Columbia. A. S. Food Company, Inc., opened and operated two Round
The Corner restaurants in the Seattle, Washington area, but in 1986 it filed
bankruptcy and ceased operations.
In October 1986, Mr. Sessions renewed his securities license with the
NASD and simultaneously joined the Boulder, Colorado office of E. F. Hutton
as an account executive. From June of 1987 through March of 1988, Mr.
Sessions was a registered representative of L. T. Securities, the securities
division of Lincoln Trust Corporation of Denver, Colorado. From March,
1988, to August, 1990, Mr. Sessions was a registered representative with Cohig
Securities, Inc. of Denver, Colorado, and from January, 1991 to June, 1994,
Mr. Sessions was a registered representative with Walford and Company, of
Boulder, Colorado. In addition, from August, 1990, to the present, Mr. Sessions
has been actively engaged in attempting to acquire his Professional Golf
Association (PGA) tour card.
Mr. Sessions has been the Secretary, Treasurer, and a director of
Buffalo Capital III, Ltd., and Buffalo Capital IV, Ltd, both of which are
Colorado corporations, since their inception in August, 1996. He has also been
the Secretary, Treasurer and a director of Buffalo Capital V, Ltd, Buffalo
Capital VI, Ltd., and Buffalo Capital VII, Ltd., all of which are Colorado
corporations, since their inception in September, 1997. All of these entities
are in the same business as the Company (blind pool or public shell companies).
Mr. Sessions has a B.S. degree from the University of Colorado.
Compliance With Section 16(a) of the Exchange Act.
Grant Peck, Dean Sessions, and Gary Joiner were each required to file
an Initial Statement of Beneficial Ownership of Securities on Form 3 at the
time of the registration of the Company's securities under Section 12(g) of the
Exchange Act. None of such persons made a timely filing of Form 3, but all
such filings were completed in August, 1998. None of such persons filed a
timely report on Form 5 for the fiscal year ended December 31, 1997 or for the
fiscal year ended December 31, 1998. However, deliquent filings of Form 5
for the fiscal years ended December 31, 1997 and December 31, 1998, are
expected to be completed by all such persons on or before April 15, 1999.
ITEM 10. EXECUTIVE COMPENSATION.
No officer or director received any remuneration from the Company
during the fiscal year. Until the Company acquires additional capital, it
is not intended that any officer or director will receive compensation from the
Company other than reimbursement for out-of-pocket expenses 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.
<TABLE>
<CAPTION>
Name and Number of Shares Percent of
Address Owned Beneficially Class Owned
<S> <C> <C>
Grant W. Peck <F1>
7331 S. Meadow Court
Boulder, Colorado 80301 327,200<F2> 28.83%
Dean F. Sessions<F1>
P. O. Box 17881
Boulder, Colorado 80308 327,400<F2> 28.85%
Scott B. Olson
1120 Lincoln St, Suite 900
Denver, CO 80203 115,000 10.13%
Gary S. Joiner
4750 Table Mesa Drive
Boulder, Colorado 80303 327,400<F2> 28.85%
All directors and executive
officers (2 persons) 2,618,400 57.67%
<FN>
<F1> The person listed is an officer, a director, or both, of the Company.
<F2> Does not include 330,000 shares subject to Class A Warrants owned by
each such person exercisable at $2.00 per share or 165,000 shares subject to
Class B Warrants owned by each such person exercisable at $4.00 per share.
</FN>
</TABLE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Indemnification of Officers and Directors
As permitted by Colorado law, the Company's Articles of Incorporation
provide that the Company will indemnify its directors and officers against
expenses and liabilities they incur to defend, settle, or satisfy any civil or
criminal action brought against them on account of their being or having been
Company directors or officers unless, in any such action, they are adjudged to
have acted with gross negligence or willful misconduct. Insofar as indemnifi-
cation for liabilities arising under the Securities Act of 1933 may be permitted
to directors, officers or persons controlling the Company pursuant to the
foregoing provisions, the Company has been informed that, in the opinion of
the Securities and Exchange Commission, such indemnification is against public
policy as expressed in that Act and is, therefore, unenforceable.
Exclusion of Liability
Pursuant to the Colorado Corporation Code, the Company's Articles of
Incorporation exclude personal liability for its directors for monetary damages
based upon any violation of their fiduciary duties as directors, except as to
liability for any breach of the duty of loyalty, acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
acts in violation of Section 7-5-114 of the Colorado Corporation Code, or any
transaction from which a director receives an improper personal benefit. This
exclusion of liability does not limit any right which a director may have to be
indemnified and does not affect any director's liability under federal or
applicable state securities laws.
Conflicts of Interest
None of the officers of the Company will devote more than a portion of
his 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.
Each of the Company's officers and directors also are officers,
directors, or both of several other Boulder, Colorado based development-stage
corporation in the same business as the Company. These companies may be in
direct competition with the Company for available opportunities. However,
as of the end of the Company's fiscal year, each of these entities had
substantially the same shareholders as the Company, which means that there was
no actual conflict of interest between the Company and these other entities as
of that time.
Company management and affiliates intend to actively negotiate or
otherwise consent to the purchase of a portion of their common stock as a
condition to, or in connection with, a proposed merger or acquisition
transaction. Members of management acquired their shares for preincorporation
services rendered at a price of $0.0025 per share, and the total purchase price
for all presently issued and outstanding shares was $28,900, of which $7,500
was paid in cash and $21,400 was paid in the form of performance of services.
It is anticipated that a substantial premium may be paid by the purchaser in
conjunction with any sale of shares by officers, directors or affiliates of the
Company which is made as a condition to, or in connection with, a proposed
merger or acquisition transaction. The fact that a substantial premium may be
paid to Company officers, directors and affiliates to acquire their shares
creates a conflict of interest for them and may compromise their state law
fiduciary duties to the Company's other shareholders. In making any such sale,
Company officers, directors and affiliates may consider their own personal
pecuniary benefit rather than the best interests of the Company and the
Company's other shareholders, and the other shareholders are not expected to
be afforded the opportunity to approve or consent to any particular buy-out
transaction involving shares held by members of Company management.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The Exhibits listed below are filed as part of this Annual
Report.
<TABLE>
<CAPTION>
Exhibit No. Document
<S> <C>
3.1 Articles of Incorporation (incorporated by reference from
Registration Statement on Form 10-SB filed with the Securities and Exchange
Commission on March 4, 1998).
3.2 Bylaws (incorporated by reference from Registration
Statement on Form 10-SB filed with the Securities and Exchange Commission
on March 4, 1998).
4.1 Warrant Agent Agreement (incorporated by reference
from Registration Statement on Form 10-SB filed with the Securities and
Exchange Commission on March 4, 1998).
4.2 Specimen Class A Warrant Certificate (incorporated by
reference from Registration Statement on Form 10-SB filed with the Securities
and Exchange Commission on March 4, 1998).
4.3 Specimen Class B Warrant Certificate (incorporated by
reference from Registration Statement on Form 10-SB filed with the Securities
and Exchange Commission on March 4, 1998).
27 Financial Data Schedule
(b) No reports on Form 8-K were filed by the Company during the
last quarter of it's 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.
BUFFALO CAPITAL VIII, LTD.
By: /s/ ________________
Grant W. Peck (Principal Executive Officer and Director)
Date: April 7, 1999
By: /s/ ________________
Dean F. Sessions (Principal Financial Officer and Director)
Date: April 7, 1999
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 1,502
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,502
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,002
<CURRENT-LIABILITIES> 116
<BONDS> 0
0
0
<COMMON> 28,900
<OTHER-SE> 1,953
<TOTAL-LIABILITY-AND-EQUITY> 2,002
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (18,771)
<INCOME-TAX> 0
<INCOME-CONTINUING> (18,771)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (18,771)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
