10QSB 1 boulder10qsb063002.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 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 June 30, 2002 Transition Report Under Section 13 or 15(d) of The Securities Exchange -------- Act of 1934 For the transition period from ______________ to _____________ Commission File Number: 0-12536 ------- Boulder Acquisitions, Inc. (Exact name of small business issuer as specified in its charter) Nevada 84-0820212 -------------------------- ---------------------------- (State of incorporation) (IRS Employer ID Number) 211 West Wall Street, Midland, TX 79701-4556 -------------------------------------------- (Address of principal executive offices) (915) 682-1761 (Issuer's telephone number) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the 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 --- --- State the number of shares outstanding of each of the issuer's classes of common equity as of the latest practicable date: July 18, 2002: 83,790,700 ------------------------- Transitional Small Business Disclosure Format (check one): YES NO X --- --- Boulder Acquisitions, Inc. (formerly Boulder Brewing Company) Form 10-QSB for the Quarter ended June 30, 2002 Table of Contents Page ---- Part I - Financial Information Item 1 Financial Statements 3 Item 2 Management's Discussion and Analysis or Plan of Operation 10 Part II - Other Information Item 1 Legal Proceedings 12 Item 2 Changes in Securities 12 Item 3 Defaults Upon Senior Securities 12 Item 4 Submission of Matters to a Vote of Security Holders 12 Item 5 Other Information 12 Item 6 Exhibits and Reports on Form 8-K 12 Signatures 12 2
Item 1 - Part 1 - Financial Statements Boulder Acquisitions, Inc. (formerly Boulder Brewing Company) Balance Sheets June 30, 2002 and 2001 (Unaudited) June 30, June 30, 2002 2001 ----------- ----------- Assets ------ Assets Cash on hand and in bank $ 1,917 $ 9,614 ----------- ----------- Total Assets $ 1,917 $ 9,614 =========== =========== Liabilities and Shareholders' Equity (Deficit) ---------------------------------------------- Liabilities Accounts payable - trade $ -- $ -- Advances from controlling shareholder -- 50,000 ----------- ----------- Total Liabilities -- 50,000 ----------- ----------- Commitments and Contingencies Shareholders' Equity (Deficit) Preferred stock - $0.001 par value 30,000,000 shares authorized None issued and outstanding -- -- Common stock - $0.001 par value 160,000,000 shares authorized 83,790,700 and 23,790,700 shares issued and outstanding, respectively 83,791 23,791 Additional paid-in capital 2,880,115 2,880,115 Accumulated deficit (2,961,989) (2,944,292) ----------- ----------- Total Shareholders' Equity (Deficit) 1,917 (40,386) ----------- ----------- Total Liabilities and Shareholders' Equity (Deficit) $ 1,913 $ 9,614 =========== ===========
The financial information presented herein has been prepared by management without audit by independent certified public accountants. The accompanying notes are an integral part of these financial statements. 3
Boulder Acquisitions, Inc. (formerly Boulder Brewing Company) Statements of Operations and Comprehensive Loss Six and Three months ended June 30, 2002 and 2001 (Unaudited) Six months Six months Three months Three months ended ended ended ended June 30, June 30, June 30, June 30, 2002 2001 2002 2001 ------------ ------------ ------------ ------------ Revenues $ -- $ -- $ -- $ -- ------------ ------------ ------------ ------------ Expenses General and administrative expenses -- 518 -- 518 ------------ ------------ ------------ ------------ Income from Operations -- (518) -- (518) Other income Interest income 7 132 4 78 ------------ ------------ ------------ ------------ Net Income before Extraordinary Item 7 (386) 4 (440) ------------ ------------ ------------ ------------ Extraordinary Item Forgiveness of trade accounts payable at settlement -- 76,740 -- -- ------------ ------------ ------------ ------------ Net Income 7 76,354 4 (440) Other Comprehensive Income -- -- -- -- ------------ ------------ ------------ ------------ Comprehensive Income $ 7 $ 76,354 $ 4 $ (440) ============ ============ ============ ============ Loss per weighted-average share of common stock outstanding, computed on Net Loss - basic and fully diluted From operations $ 0.00 $ 0.00 $ 0.00 $ 0.00 Extraordinary item 0.00 0.00 0.00 0.00 ------------ ------------ ------------ ------------ Total $ 0.00 $ 0.00 $ 0.00 $ 0.00 ============ ============ ============ ============ Weighted-average number of shares of common stock outstanding 83,790,700 23,790,000 83,790,700 23,790,000 ============ ============ ============ ============
The financial information presented herein has been prepared by management without audit by independent certified public accountants. The accompanying notes are an integral part of these financial statements. 4
Boulder Acquisitions, Inc. (formerly Boulder Brewing Company) Statements of Cash Flows Six months ended March 31, 2002 and 2001 (Unaudited) Six months Six months ended ended June 30, June 30, 2002 2001 ---------- ---------- Cash Flows from Operating Activities Net Income $ 7 $ 76,354 Adjustments to reconcile net income to net cash provided by operating activities Forgiveness of trade accounts payable at settlement -- (76,740) Increase (Decrease) in Accounts payable - trade -- (40,000) ---------- ---------- Net cash used in operating activities 7 (40,386) ---------- ---------- Cash Flows from Investing Activities -- -- ---------- ---------- Cash Flows from Financing Activities Proceeds from loan from shareholder -- 50,000 ---------- ---------- Increase (Decrease) in Cash and Cash Equivalents 7 9,614 Cash and cash equivalents at beginning of period 1,910 -- ---------- ---------- Cash and cash equivalents at end of period $ 1,917 $ 9,614 ========== ========== Supplemental Disclosures of Interest and Income Taxes Paid Interest paid during the period $ -- $ -- ========== ========== Income taxes paid (refunded) $ -- $ -- ========== ==========
The financial information presented herein has been prepared by management without audit by independent certified public accountants. The accompanying notes are an integral part of these financial statements. 5 Boulder Acquisitions, Inc. (formerly Boulder Brewing Company) Notes to Financial Statements Note A - Organization and Description of Business Boulder Acquisitions, Inc. (Company) was incorporated under the laws of the State of Colorado in 1980 as Boulder Brewing Company. The Company was the successor to a general partnership formed in 1979. In September 2001, the Company changed its state of Incorporation from Colorado to Nevada by means of a merger with and into Boulder Acquisitions, Inc., a Nevada corporation formed on September 6, 2001 solely for the purpose of effecting the reincorporation. The Articles of Incorporation and Bylaws of the Nevada corporation are the Articles of Incorporation and Bylaws of the surviving corporation. Such Articles of Incorporation eliminated the provision for the Company to issue preferred stock and did not make any other changes the capital structure of the Company. From the initial inception of the original partnership through 1990, the Company was in the business of operating a microbrewery (generally defined as a brewery which produces less than 15,000 barrels per year) in Boulder, Colorado. During 1990, as a result of various debt defaults, the Company's assets were foreclosed upon and the Company ceased all business operations. The Company has effectively had no operations, assets or liabilities since its fiscal year ended December 31, 1990. Accordingly, the Company is dependent upon management and/or significant shareholders to provide sufficient working capital to preserve the integrity of the corporate entity at this time. It is the intent of management and significant stockholders to provide sufficient working capital necessary to support and preserve the integrity of the corporate entity. However, there is no legal obligation for either management or significant stockholders to provide additional future funding. Should this pledge fail to provide financing, the Company has not identified any alternative sources. Consequently, there is substantial doubt about the Company's ability to continue as a going concern. During interim periods, the Company follows the accounting policies set forth in its annual audited financial statements filed with the U. S. Securities and Exchange Commission on its Annual Report on Form 10-KSB for the year ended December 31, 2001. The information presented within these interim financial statements may not include all disclosures required by generally accepted accounting principles and the users of financial information provided for interim periods should refer to the annual financial information and footnotes when reviewing the interim financial results presented herein. In the opinion of management, the accompanying interim financial statements, prepared in accordance with the U. S. Securities and Exchange Commission's instructions for Form 10-QSB, are unaudited and contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial condition, results of operations and cash flows of the Company for the respective interim periods presented. The current period results of operations are not necessarily indicative of results which ultimately will be reported for the full fiscal year ending December 31, 2002. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 6 Boulder Acquisitions, Inc. (formerly Boulder Brewing Company) Notes to Financial Statements - Continued Note B - Going Concern Uncertainty The Company's management currently maintains the corporate status of the Company and provides all nominal working capital support. Because of the Company's lack of operating assets, the Company's continuance is fully dependent either future sales of securities or upon its current management and/or advances or loans from significant stockholders or corporate officers to provide sufficient working capital to preserve the integrity of the corporate entity. There is no assurance that the Company will be able to obtain additional funding through the sales of additional securities or, that such funding, if available, will be obtained on terms favorable to or affordable by the Company. It is the intent of management and significant stockholders to provide sufficient working capital necessary to support and preserve the integrity of the corporate entity. However, there is no legal obligation for either management or significant stockholders to provide additional future funding. Note C - Summary of Significant Accounting Policies 1. Cash and cash equivalents ------------------------- For Statement of Cash Flows purposes, the Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents. 2. Income Taxes ------------ The Company uses the asset and liability method of accounting for income taxes. At June 30, 2002 and 2001, respectively, the deferred tax asset and deferred tax liability accounts, as recorded when material to the financial statements, are entirely the result of temporary differences. Temporary differences represent differences in the recognition of assets and liabilities for tax and financial reporting purposes, primarily accumulated depreciation and amortization, allowance for doubtful accounts and vacation accruals. As of June 30, 2002 and 2001, the deferred tax asset related to the Company's net operating loss carryforward is fully reserved. Due to the provisions of Internal Revenue Code Section 338, the Company may have no net operating loss carryforwards available to offset financial statement or tax return taxable income in future periods as a result of a change in control involving 50 percentage points or more of the issued and outstanding securities of the Company. 3. Income (Loss) per share ----------------------- Basic earnings (loss) per share is computed by dividing the net income (loss) by the weighted-average number of shares of common stock and common stock equivalents (primarily outstanding options and warrants). Common stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the treasury stock method. The calculation of fully diluted earnings (loss) per share assumes the dilutive effect of the exercise of outstanding options and warrants at either the beginning of the respective period presented or the date of issuance, whichever is later. As of June 30, 2002 and 2001, respectively, the Company has no outstanding stock warrants, options or convertible securities which could be considered as dilutive for purposes of the loss per share calculation. 7 Boulder Acquisitions, Inc. (formerly Boulder Brewing Company) Notes to Financial Statements - Continued Note D - Fair Value of Financial Instruments The carrying amount of cash, accounts receivable, accounts payable and notes payable, as applicable, approximates fair value due to the short term nature of these items and/or the current interest rates payable in relation to current market conditions. Note E - Advances from Controlling Shareholder On January 8, 2001, the Company's controlling shareholder loaned the Company $50,000 to support operations, settle outstanding trade accounts payable and provide working capital. The advance is repayable upon demand and is non-interest bearing. On September 25, 2001, the shareholder executed a private placement letter converting this advance into 50,000,000 shares of restricted, unregistered common stock. Note F - Forgiveness of debt In January 2001, the Company negotiated settlements to retire all outstanding trade accounts payable. The results of these negotiations resulted in a one-time non-cash gain on settlement of approximately $76,700. Note G - Income Taxes The components of income tax (benefit) expense for the six months ended June 30, 2002 and 2001, respectively, are as follows: Six months Six months ended ended June 30, une 30, 2002 2001 ---------- ---------- Federal: Current $ -- $ -- Deferred -- -- ---------- ---------- -- -- ---------- ---------- State: Current -- -- Deferred -- -- ---------- ---------- -- -- ---------- ---------- Total $ -- $ -- ========== ========== As of March 31, 2002, as a result of a January 2001 change in control, the Company has a net operating loss carryforward of approximately $18,000 to offset future taxable income. Subject to current regulations, this carryforward will begin to expire in 2021. The amount and availability of the net operating loss carryforwards may be subject to limitations set forth by the Internal Revenue Code. Factors such as the number of shares ultimately issued within a three year look-back period; whether there is a deemed more than 50 percent change in control; the applicable long-term tax exempt bond rate; continuity of historical business; and subsequent income of the Company all enter into the annual computation of allowable annual utilization of the carryforwards. 8
Boulder Acquisitions, Inc. (formerly Boulder Brewing Company) Notes to Financial Statements - Continued Note G - Income Taxes - Continued The Company's income tax expense (benefit) for the six months ended June 30, 2002 and 2001, respectively, differed from the statutory federal rate of 34 percent as follows: Six months Six months ended ended June 30, June 30, 2002 2001 ---------- ---------- Statutory rate applied to income before income taxes $ 2 $ 25,960 Increase (decrease) in income taxes resulting from: State income taxes -- -- Other, including reserve for deferred tax asset and application of net operating loss carryforward (2) (25,960) ---------- ---------- Income tax expense $ -- $ -- ========== ==========
Temporary differences, consisting primarily of statutory deferrals of expenses for organizational costs and statutory differences in the depreciable lives for property and equipment, between the financial statement carrying amounts and tax bases of assets and liabilities give rise to deferred tax assets and liabilities as of June 30, 2002 and 2001, respectively: March 31, March 31, 2002 2001 ---------- ---------- Deferred tax assets Net operating loss carryforwards $ -- $ -- Less valuation allowance -- -- ---------- ---------- Net Deferred Tax Asset $ -- $ -- ========== ========== Note H - Common Stock Transactions During the August 24, 2001 Special Meeting of Shareholders, a one (1) for five (5) reverse stock split on the issued and outstanding shares of common stock was approved. This action was subsequently enacted by the Company's Board of Directors and caused the issued and outstanding shares to decrease from 118,953,529 to 23,790,700. The effect of this action is reflected in the accompanying financial statements as of the first day of the first period presented. On September 25, 2001, the Company sold 10,000,000 shares of restricted, unregistered common stock at $0.001 per share for gross proceeds of $10,000, pursuant to a private placement memorandum to an entity owned by the Company's President and Chief Executive Officer. These funds were used to support the working capital needs of the Company. The Company relied upon Section 4(2) of The Securities Act of 1933, as amended, for an exemption from registration on these shares. On September 25, 2001, the Company converted the $50,000 in advances from the Company's President and Chief Executive Officer into 50,000,000 shares of restricted, unregistered common stock at $0.001 per share, pursuant to a private placement memorandum. These funds were used to settle outstanding trade accounts payable and provide working capital for the Company. The Company relied upon Section 4(2) of The Securities Act of 1933, as amended, for an exemption from registration on these shares. 9 Part I - Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations (1) Caution Regarding Forward-Looking Information Certain statements contained in this quarterly filing, including, without limitation, statements containing the words "believes", "anticipates", "expects" and words of similar import, constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: international, national and local general economic and market conditions: demographic changes; the ability of the Company to sustain, manage or forecast its growth; the ability of the Company to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other factors referenced in this and previous filings. Given these uncertainties, readers of this Form 10-QSB and investors are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments. (2) Results of Operations, Liquidity and Capital Resources Quarters Ended June 30, 2002 and 2001 ------------------------------------- The Company had no operating revenues for the respective six month periods ended June 30, 2002 and 2001, respectively. General and administrative expenses for the six months ended June 30, 2002 and 2001 were approximately $ -0- and $518, respectively. The Company received interest income of approximately $7 and $132 during the first six months of 2002 and 2001, respectively, as a result of invested working capital funds. Additionally, due to the negotiated settlement of delinquent trade accounts payable in the first quarter ended March 31, 2001, the Company experienced a one-time, non-cash gain on settlement of approximately $76,740. Net income for the six months ended June 30, 2002 and 2001, respectively, was approximately $7 and $76,354. Earnings per share for the respective quarters ended March 31, 2002 and 2001 was $0.00 and $0.00 on the weighted-average post-reverse split shares issued and outstanding. The Company does not expect to generate any meaningful revenue or incur operating expenses for purposes other than fulfilling the obligations of a reporting company under The Securities Exchange Act of 1934 unless and until such time that the Company's operating subsidiary begins meaningful operations. At June 30, 2002 and 2001, respectively, the Company had working capital of approximately $1,917 and $(40,346). It is the intent of management and significant stockholders to provide sufficient working capital necessary to support and preserve the integrity of the corporate entity. However, there is no legal obligation for either management or significant stockholders to provide additional future funding. Should this pledge fail to provide financing, the Company has not identified any alternative sources. Consequently, there is substantial doubt about the Company's ability to continue as a going concern. 10 The Company's need for capital may change dramatically as a result of any business acquisition or combination transaction. There can be no assurance that the Company will identify any such business, product, technology or company suitable for acquisition in the future. Further, there can be no assurance that the Company would be successful in consummating any acquisition on favorable terms or that it will be able to profitably manage the business, product, technology or company it acquires. The Company's need for capital may change dramatically as a result of any business acquisition or combination transaction. There can be no assurance that the Company will identify any such business, product, technology or company suitable for acquisition in the future. Further, there can be no assurance that the Company would be successful in consummating any acquisition on favorable terms or that it will be able to profitably manage the business, product, technology or company it acquires. Plan of Business ---------------- General ------- The Company intends to locate and combine with an existing, privately-held company which is profitable or, in management's view, has growth potential, irrespective of the industry in which it is engaged. However, the Company does not intend to combine with a private company which may be deemed to be an investment company subject to the Investment Company Act of 1940. A combination may be structured as a merger, consolidation, exchange of the Company's common stock for stock or assets or any other form which will result in the combined enterprise's becoming a publicly-held corporation. Pending negotiation and consummation of a combination, the Company anticipates that it will have, aside from carrying on its search for a combination partner, no business activities, and, thus, will have no source of revenue. Should the Company incur any significant liabilities prior to a combination with a private company, it may not be able to satisfy such liabilities as are incurred. If the Company's management pursues one or more combination opportunities beyond the preliminary negotiations stage and those negotiations are subsequently terminated, it is foreseeable that such efforts will exhaust the Company's ability to continue to seek such combination opportunities before any successful combination can be consummated. In that event, the Company's common stock will become worthless and holders of the Company's common stock will receive a nominal distribution, if any, upon the Company's liquidation and dissolution. Combination Suitability Standards --------------------------------- In its pursuit for a combination partner, the Company's management intends to consider only combination candidates which are profitable or, in management's view, have growth potential. The Company's management does not intend to pursue any combination proposal beyond the preliminary negotiation stage with any combination candidate which does not furnish the Company with audited financial statements for at least its most recent fiscal year and unaudited financial statements for interim periods subsequent to the date of such audited financial statements, or is in a position to provide such financial statements in a timely manner. The Company will, if necessary funds are available, engage attorneys and/or accountants in its efforts to investigate a combination candidate and to consummate a business combination. The Company may require payment of fees by such combination candidate to fund the investigation of such candidate. In the event such a combination candidate is engaged in a high technology business, the Company may also obtain reports from independent organizations of recognized standing covering the technology being developed and/or used by the candidate. The Company's limited financial resources may make the acquisition of such reports difficult or even impossible to obtain and, thus, there can be no assurance that the Company will have sufficient funds to obtain such reports when considering combination proposals or candidates. To the extent the Company is unable to obtain the advice or reports from experts, the risks of any combined enterprise's being unsuccessful will be enhanced. Furthermore, to the knowledge of the Company's officers and directors, neither the candidate nor any of its directors, executive officers, principal shareholders or general partners: 11 (1) will not have been convicted of securities fraud, mail fraud, tax fraud, embezzlement, bribery, or a similar criminal offense involving misappropriation or theft of funds, or be the subject of a pending investigation or indictment involving any of those offenses; (2) will not have been subject to a temporary or permanent injunction or restraining order arising from unlawful transactions in securities, whether as issuer, underwriter, broker, dealer, or investment advisor, may be the subject of any pending investigation or a defendant in a pending lawsuit arising from or based upon allegations of unlawful transactions in securities; or (3) will not have been a defendant in a civil action which resulted in a final judgement against it or him awarding damages or rescission based upon unlawful practices or sales of securities. The Company's officers and directors will make these determinations by asking pertinent questions of the management of prospective combination candidates. Such persons will also ask pertinent questions of others who may be involved in the combination proceedings. However, the officers and directors of the Company will not generally take other steps to verify independently information obtained in this manner which is favorable. Unless something comes to their attention which puts them on notice of a possible disqualification which is being concealed from them, such persons will rely on information received from the management of the prospective combination candidate and from others who may be involved in the combination proceedings. Part II - Other Information Item 1 - Legal Proceedings None Item 2 - Changes in Securities None Item 3 - Defaults on Senior Securities None Item 4 - Submission of Matters to a Vote of Security Holders The Company has held no regularly scheduled, called or special meetings of shareholders during the quarterly period ended June 30, 2002. Item 5 - Other Information None Item 6 - Exhibits and Reports on Form 8-K Exhibits - None Reports on Form 8-K - None 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. Boulder Acquisitions, Inc. July 18 , 2002 /s/ Glenn A. Little. -------- ---------------------- Glenn A. Little President and Director 12