<PAGE> 1
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, 2000.
[ ] 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 jurisdiction of Incorporation) (IRS Employer Id. No.)
36 West 25th Street
Second Floor
New York, New York 10010
(Address of Principal Office) (Zip Code)
Issuer's telephone Number: (212) 414-2700
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 Securities 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 March 31, 2000 the
following shares of common stock were outstanding: Common Stock, no par value,
11,000,000 shares.
Transitional Small Business Disclosure Format (Check one): Yes No X
----- -----
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PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS
(a) The unaudited consolidated financial statements of registrant as of March
31, 2000 and for the periods February 23, 1999 (Inception) through March 31,
1999, and the three months ended March 31, 2000 follow. The consolidated
financial statements reflect all adjustments that are, in the opinion of
management, necessary to a fair statement of the results for the interim periods
presented.
BUFFALO CAPITAL VIII, LTD.
Index to Consolidated Financial Statements - Unaudited
Consolidated Balance Sheet at March 31, 2000
Consolidated Statement of Operations
February 23, 1999 (Inception) Through March 31, 1999
and Three Months Ended March 31, 2000
Consolidated Statement of Shareholders' Deficiency
February 23, 1999 (Inception) Through March 31, 1999
and Three Months Ended March 31, 2000
Consolidated Statement of Cash Flows
February 23, 1999 (Inception) Through March 31, 1999
and Three Months Ended March 31, 2000
Notes to Consolidated Financial Statements
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BUFFALO CAPITAL VIII, LTD.
CONSOLIDATED BALANCE SHEETS
Unaudited
<TABLE>
<CAPTION>
March 31, 2000
--------------
<S> <C>
ASSETS
Current assets:
Accounts receivable $ 4,950
Loan receivable -- related party 60,000
Prepaid expenses 10,000
----------
Total current assets 74,950
Investments 34,383
----------
Total assets $ 109,333
==========
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current liabilities:
Bank overdraft $ 3,715
Accounts payable and accrued expenses 97,184
Loans payable 224,000
----------
Total current liabilities 324,899
----------
Shareholders' deficiency:
Preferred stock --
Common stock 4
Accumulated deficit (215,570)
----------
Total shareholders' deficiency (215,566)
----------
Total liabilities and shareholders' deficiency $ 109,333
==========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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BUFFALO CAPITAL VIII, LTD.
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited
<TABLE>
<CAPTION>
February 23, 1999
(Inception) Three Months
Through Ended
March 31, 1999 March 31, 2000
----------------- --------------
<S> <C> <C>
REVENUE $ -- $ 47,388
------------ ------------
COSTS AND EXPENSES:
Development expenses -- 140,270
General and administrative -- 130,562
Interest -- --
------------ ------------
Total costs and expenses -- 270,832
------------ ------------
LOSS BEFORE TAXES -- 233,444
PROVISION FOR TAXES -- --
------------ ------------
NET LOSS $ -- $ 233,444
============ ============
NET LOSS PER SHARE Nil $ .02
============ ============
WEIGHTED AVERAGE SHARES
OUTSTANDING (pro-forma in 1999) 11,000,000 11,000,000
============ ============
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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BUFFALO CAPITAL VIII, LTD.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIENCY
Unaudited
<TABLE>
<CAPTION>
Preferred Stock Common Stock Total
----------------- ----------------------------- Accumulated Shareholders'
Shares Amount Shares Amount Deficit Deficiency
------ ------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Balance, February 23, 1999
(Inception) -- -- 100 $ 4 $ -- $ 4
Net loss for the period ended
March 31, 1999 -- -- -- -- -- --
------ ------ ------------ ------------ ------------ ------------
Balance, March 31, 1999 -- -- 100 $ 4 $ -- $ 4
====== ====== ============ ============ ============ ============
Balance, January 1, 2000 -- -- 100 $ 4 $ 7,874 $ 7,878
Net loss for the period ended
March 31, 2000 -- -- -- -- (223,444) (223,444)
Acquisition of Buffalo Capital (100)
VIII, Ltd. -- -- 11,000,000 -- -- --
------ ------ ------------ ------------ ------------ ------------
Balance, March 31, 2000 -- -- 11,000,000 $ 4 $ (215,566) $ (215,566)
====== ====== ============ ============ ============ ============
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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BUFFALO CAPITAL VIII, LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited
<TABLE>
<CAPTION>
February 23, 1999
(Inception) Three Months
Through Ended
March 1,1999 March 31, 2000
----------------- --------------
<S> <C> <C>
Cash provided by:
Operating -
Revenues received $ -- $ 47,508
Expenses paid -- (201,665)
------------ ------------
Net cash consumed by operations -- (154,157)
Investments - (Returns (additions) (8,999) 430
Financing - Proceeds from loans 11,339 150,000
------------ ------------
Net increase (decrease) in cash 2,340 (3,727)
Cash, beginning of period -- 12
------------ ------------
Cash (overdraft), end of period $ 2,340 $ (3,715)
============ ============
Reconciliation of Net loss to Net cash consumed by
operations:
Net loss $ -- $ (223,444)
Decrease in accounts receivable -- 120
Increase in accounts payable and accrued liabilities -- 69,167
------------ ------------
Net cash consumed by operations $ -- $ (154,157)
============ ============
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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BUFFALO CAPITAL VIII, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
1. ACCOUNTING POLICIES. The Company's consolidated financial statements for the
three months ended March 31, 2000 and the period February 23, 1999 (inception)
through March 31, 1999, have been prepared in accordance with the accounting
policies described in its Annual Report on Form 10KSB, supplemented herein and
by Notes 2 and 3 of below. Fees received for management and other services are
recognized in the period to which they relate, and costs and expenses are
recognized as incurred. The Company finances its entertainment projects through
limited partnerships in which it is general partner and investor. The Company
has three such projects at March 31, 2000, which are recorded at the lower of
cost or estimated realizable value. Management believes the consolidated
statements include all adjustments necessary to present fairly the results of
the Company's operations for such interim periods and its financial condition at
March 31, 2000. Interim financial statements may not be indicative of results
for the full fiscal period, and should be read in conjunction with the Company's
audited report for its most recent year-end, December 31, 1999.
2. BASIS OF CONSOLIDATION. The accompanying consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiaries, Momentum
Productions, Inc.(an operating company acquired March 2000), and Momentum
Holding Corp.(an inactive Delaware corporation formed January 2000). All
intercompany transactions have been eliminated.
3. MOMENTUM PRODUCTIONS, INC. ("MPI"). During March 2000, the Company acquired
100% of the outstanding stock of MPI, a privately held New York corporation
engaged in the development and production of live theatrical products. In
connection with this transaction, the Company's shareholders returned 9,470,000
common shares to authorized but issued and cancelled all of the Class A and
Class B warrants outstanding, and the Company issued 9,120,000 new shares to the
shareholders of MPI. As a result of this transaction, the Company has a total of
11,000,000 common shares outstanding, of which the former owners of MPI hold
82.9%. The Company has recorded the acquisition of MPI as a reverse acquisition.
Had the acquisition of MPI occurred on January 1, 2000, consolidated Net Loss
for the three months ended March 31, 2000 would have been approximately $88,000.
4. RELATED PARTY TRANSACTIONS. The Company rents its office facilities on a
month to month basis from an entity owned by one of its executives. In January
2000, the company agreed to pay $5,500 per month, on a month to month basis for
such facilities. At March 31, 2000 the company is owed $60,000 from an entity
owned by one of its executives. This loan is non-interest bearing and has no
stated maturity. The Company's principal source of revenue is from entertainment
project partnerships of which the Company is general partner; see Investments
below.
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5. INVESTMENTS. The Company's owns the following entertainment interests:
<TABLE>
<S> <C>
Dinner With Friends, L.P. $ 34,252
Thunder Development, L.P. 1
Ringing Development, L.P. 130
--------
$ 34,383
</TABLE>
The Company is general partner of the above limited partnerships. In addition,
the Company has been assigned the rights to receive general partner
distributions, if any, relating to Spin, L.P.
6. LOANS PAYABLE. At March 31, 2000 the Company was indebted to four individuals
for loans amounting to $224,000. One loan for $14,000 is non-interest bearing
with no stated maturity, and the other three totalling $100,000, $80,000, and
$30,000 bear interest at 10% and are payable in June 2000.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion contains forward-looking statements regarding us, our
business, prospects and results of operations that are subject to certain risks
and uncertainties posed by many factors and events that could cause our actual
business, prospects and results of operations to differ materially from those
that may be anticipated by such forward-looking statements. Factors that may
affect such forward-looking statements include, without limitation: our ability
to successfully develop new products for new markets; the impact of competition
on our revenues, changes in law or regulatory requirements that adversely affect
or preclude customers from using our products for certain applications; delays
in our introduction of new products or services; and failure by us to keep pace
with emerging technologies.
When used in this discussion, words such as "believes," "anticipates,"
"expects," "intends," and similar expressions are intended to identify
forward-looking statements, but are not the exclusive means of identifying
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of this
report. We undertake no obligation to revise any forward-looking statements in
order to reflect events or circumstances that may subsequently arise. Readers
are urged to carefully review and consider the various disclosures made by us in
this report and other reports filed with the Securities and Exchange Commission
that attempt to advise interested parties of the risks and factors that may
affect our business.
REVENUES - Our revenues for the three months ended March 31, 2000 ("FQ0") of
$47,388 are comprised of royalties and fee income, substantially all of which
relates to distributions received from its production of Dinner With Friends at
the Variety Arts Theatre, Off-Broadway, in New York City. Our operating
subsidiary MPI, formed in February 1999, did not begin to receive revenues until
late 1999. Accordingly, the period February 23, 1999 (inception) through March
31, 1999 ("FQ9") had no comparable receipts.
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EXPENSES - Development expense for FQ0 was $140,270 substantially all of which
relates to the write-down in value of the Company's investment in Thunder
Knocking on the Door of $95,412, and the provision for its wind-up of $44,588.
The write-down of this project, which had been experiencing moderate audience
acceptance for almost a year on tour, was deemed appropriate by management
following its recent performance in Stamford, CT that confirmed it still fell
below the artistic potential for Broadway production.
General and administrative expenses were $130,562 for FQ0 and relate
in order of magnitude to management of our Off-Broadway production of Dinner
With Friends, our tour of Thunder Knocking at the Door, participation in an
international tour of Play On!, and development efforts associated with our
planned revival of Bells Are Ringing. In addition, we expend management time and
other resources reviewing new prospects for inclusion in our ongoing business
plan to develop live theatrical entertainment products.
As significant development and managerial efforts did not begin until the
latter portion of 1999, the Company had no comparable expenses for FQ9.
RESULTS OF OPERATIONS - Our loss from operations for FQ0 was $233,444. In view
of our recent formation and lack of profitable operating history, no tax benefit
(or savings) could reasonably be anticipated resulting in a net loss for the
full amount of $2333,444. The loss for FQ0 was in line with management's
expectation, as the enhanced revenue opportunities associated with developing
live entertainment products generally do not occur until each product's
investors recoup their initial capital. At March 31, 2000 only the first of the
company's projects was running, Dinner With Friends, which had recently opened
in November 1999.
LOSS PER SHARE - The average number of shares outstanding during both FQ0 and
FQ9 was 11,000,000. Accordingly, the loss per share for each period was $.02 and
Nil, respectively.
LIQUIDITY AND CAPITAL RESOURCES - We develop and commercialize each of its live
theatrical projects through sale to accredited buyers of interests in a limited
partnership of which the company acts as General Partner and Manager. While
limited partnerships provide an ideal medium for financing theatrical products,
until investors recoup their investment, distributions of management fees and
particularly royalties to the general partner and manager are generally
marginal. Accordingly, we must maintain sufficient working capital to sustain
the expenses of identification, early development, and continuing management of
its products.
At March 31, 2000 substantially all of our working capital was provided from
short-term borrowings as our private placement of 1,000,000 of common shares at
$1.00 per share was delayed until April 2000. Additionally, distributions from
the company's initial operation of Dinner with Friends, as expected, will not
contribute materially to our overall expenses until the project's backers recoup
their original investment. After repayment of its short-term borrowings of
approximately $210,000, the company will have sufficient capital resources to
exploit the commercial potential of its existing live theatre production rights.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
No legal proceedings of a material nature to which we are a party were pending
during the reporting period, and we know of no legal proceedings of a material
nature pending or threatened or judgements entered against any of our directors
or officers in his capacity as such.
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ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
During the period, we completed our acquisition of 100% of the issued and
outstanding common shares of Momentum Productions, Inc., a private New York
company (MPI), in exchange for approximately 82.9% of our ownership. In
contemplation of this transaction, we returned 9,470,000 common shares to
authorized but unissued, cancelled our Class A and Class B warrants, and issued
9,120,000 new shares to the shareholders of MPI. As a result of this
transaction, there are now 11,000,000 common shares issued and outstanding.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None.
ITEM 5. OTHER INFORMATION - None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -
(a) Exhibit No. 27.1 - Financial Data Schedule.
(b) We filed a report on Form 8-K on March 22, 2000 in connection with
the acquisition of MPI.
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 VIII, LTD.
(Registrant)
Date: May 22, 2000
/s/ MARK BALSAM
- -----------------------------
Mark Balsam, President
and Chief Executive Officer
/s/ ANTHONY R. RUSSO
- -----------------------------
Anthony R. Russo, Vice President
and Chief Financial Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
27.1 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> (3,715)
<SECURITIES> 0
<RECEIVABLES> 4,950
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 74,950
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 109,333
<CURRENT-LIABILITIES> 324,899
<BONDS> 0
0
0
<COMMON> 11,000,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> (215,566)
<SALES> 0
<TOTAL-REVENUES> 47,388
<CGS> 0
<TOTAL-COSTS> 270,832
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (223,444)
<INCOME-TAX> 0
<INCOME-CONTINUING> (223,444)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (223,444)
<EPS-BASIC> (.02)
<EPS-DILUTED> 0
</TABLE>
