SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
__________________________________________
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
COMMISSION FILE NO. 2-91651-D
Broadleaf Capital Partners, Inc.
(Formerly Peacock Financial Corporation)
COLORADO 87-0410039
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION)
2531 SAN JACINTO AVENUE SAN JACINTO, CA 92583
(ADDRESS AND ZIP CODE OF PRINCIPAL EXECUTIVE OFFICES)
(909) 652-3885
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 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___.
---
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OR REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT 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-K OR ANY AMENDMENT TO THIS
FORM 10-K.
THE NUMBER OF SHARES OF CLASS A COMMON STOCK OUTSTANDING AS OF DECEMBER 31,
2001, WAS 2,303,508.
DOCUMENTS INCORPORATED BY REFERENCE: NONE.
ITEM 1 - BUSINESS
- -----------------
Broadleaf Capital Partners, Inc. (formerly Peacock Financial Corporation), a
Colorado corporation (the Company), incorporated February 1984, is a publicly
traded diversified investment holding company that makes direct investments in
and provides management services to businesses that have an operating history
and can perform to the bottom line. The Company has continued with its
restructuring and plans expansion through the ongoing development of its
available operations and other business opportunities.
The Company participates in companies in various fields of business by arranging
for and contributing capital and providing management assistance. Potential
ventures are evaluated based on the ability of the business to be viable and
reach a significant milestone with the Company's initial investment as well as
possessing a potential to generate reasonable revenues through strong
intellectual property rights and experienced management. The Company continually
seeks and evaluates investment opportunities that have the potential of earning
reasonable returns. The Company has in the past, and may again in the future,
raise capital specifically for the purpose of permitting it to make an
investment that the company believes is attractive.
The Company plans to invest in ventures with at least a three-year operating
history, is performing with a profit to the bottom line and, in some cases, has
the need for identification and implementation of experienced management.
Identifying and developing each new business opportunity may require the Company
to dedicate certain amounts of financial resources, management attention, and
personnel, with no assurance that these expenditures will be recouped.
Similarly, the selection of companies and the determination of whether a company
offers a viable business plan, an acceptable likelihood of success, and future
profitability involves inherent risk and uncertainty.
At December 2000 and 2001, the Company has written off several of its
investments. The auditors have written an opinion that unless the Company can
turn profitable, it will be forced to cease operations. The new management of
the Company, through a restructuring process, has been consolidating the
portfolio and endeavoring to improve performance while adding to it through
strategic investment and attempting to move the Company into profitability.
2
ITEM TWO - INVESTMENT HISTORY
- -----------------------------
Riverside Park Apartments
The Company formed a limited partnership in June 1992 and acquired two apartment
buildings for $3,350,000 to be repaired, developed and managed. During the year
ending 1992, the Company reduced its interest to 1% and has remained a general
partner with a 1% interest.
Canyon Shadows Apartments
The Company acquired a 120-unit apartment complex in April 1995 for $875,000.
The Company received a $975,000 loan that converts to a grant from the City of
Riverside for the purpose of acquisition and rehabilitation and, in 1996, the
Company was awarded $2,200,000 in Federal Tax Credits for the project. In
December 1996, the project was sold to a tax credit partnership in which the
Company retained a $905,000 capital account, as well as a 1% interest as a
general partner for which it is entitled to receive a management fee and 75.9%
of the project cash flow.
St. Michel Development
In 1995, the Company formed a limited liability company to acquire a 63-lot
residential subdivision in the San Jacinto Valley. In March 1996, the limited
liability company acquired an additional 110-lot subdivision also in the San
Jacinto Valley. The Company retained a 50% ownership in the limited liability
company. A joint venture to build out these homes was completed, the properties
were sold and distributions made. This partnership has no other operating
activities.
Vir-Tek
Vir-Tek is a minority disabled veteran engineering and contracting firm, formed
to take advantage of recently passed federal legislation (H.R. 1568) requiring
3% participation on all programs and projects funded by federal dollars. Vir-Tek
provides environmental management, facility and operations management, mapping
and information management, engineering services, project management, and waste
management. The company emphasizes teamwork in combination with innovation to
design balanced solutions to complex environmental, industrial, and engineering
problems. Vir-Tek has served commercial, industrial, and residential
construction developers as well as concerns of city, county, and federal
agencies. The Company has maintained a 49% equity interest in Vir-Tek under the
terms of the contract.
iNetPartners, Inc.
Peacock Financial holds a 51 percent interest in iNetPartners, Inc. The Company
has recently signed a Letter of Intent with Daniels Advisory Group, which is
expected to acquire the majority interest and will bring a new operating entity
into iNetPartners.
3
San Diego Soccer Development Corporation
The Company currently owns approximately 1,555,001 shares of San Diego Soccer
Development Corporation (SDSDC). SDSDC has begun a restructuring and had
recently changed its name to Soccer Development of America.
Bio-Friendly Corporation
The Company invested $180,000 for 437,500 shares of common stock at 40 cents a
share of Bio-Friendly Corporation, a fuel technology company.
ModWorks
The Company entered into an agreement to acquire Modworks, a general aviation
company in Punta Gorda, Florida. As of this date, the acquisition has not been
completed.
ITEM 3 - LEGAL PROCEEDINGS
- --------------------------
Unresolved legal issues are:
. Cox Communications - A collection case for services provided to the
Orange County Soccer Development Corporation. The claim is for $60,000
with a possibility of settlement.
City of San Jacinto - Involves the delinquency of payments of the
property and mello roos taxes on 105 parcels of real property owned by
PR Equities, where Peacock Financial Corporation is the General
Partner. The properties were encumbered with taxes and the Company
determined the properties were not a viable investment and the
properties were foreclosed on for the tax liability.
. Bank of Hemet - This case involved a loan to PR Equities, with Peacock
Financial Corporation as the General Partner. The loan went into
default and an abstract of judgment had been filed for nearly
$1,000,000. This case was settled for $100,000 to paid over a period
of eighteen months. In December 2001, the bank's position was
purchased by the firm, Jaeger & Kodner, LLC. The Company is currently
in negotiation with Jaeger & Kodner, LLC.
. Steven Slagter - The case involved an action brought against PR
Equities, with Peacock Financial Corporation as the General Partner.
It involved the collection of approximately $900,000 on a promissory
note. There was a summary judgment for nearly $1.35 million. The
Company has entered into preliminary settlement negotiations at a
value of $135,000.
4
. Helen Apostle - This case involved an action for approximately $90,000
involving a defaulted loan. The Company has been in preliminary
settlement negotiations and the case is currently unresolved.
. George Straggas - Involves a claim against the Company for a $8,000
legal bill.
. Garrett Martin - Involves an unpaid Consulting agreement wherein a
judgment was entered against the Company for $21,800. The Company is
currently in preliminary settlement negotiations for a lesser amount.
. In June 2001, the Company instituted legal proceedings against former
members of the management of Peacock Financial Corporation and the
former management of Dotcom Ventures, LLC. The case is currently
pending and a trial date has not been set.
. SEC - The Company has been advised by the Securities and Exchange
Commission (the "Commission") that the Commission has entered into a
formal investigation of the Company. As of this date, the
investigation remains open and the potential for liability or outcome
cannot be determined.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
No matter was submitted to a vote of security holders during the fourth quarter
of the fiscal year covered by this report.
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS
- -------------------------------------------------------------------------------
Common Stock of the Company is traded in the over-the-counter market, and quoted
on the Electronic Bulletin Board. During the fiscal year ending December 31,
2001, the Company's common stock traded between $.06 and $.001 per share. The
Company has not yet adopted any policy regarding payment of dividends.
Quarter Ended Low High
- ------------- --- ----
March 31, 2001 $.015 $ .06
June 30, 2001 .01 .035
September 30, 2001 .005 .02
December 31, 2001 .001 .006
5
At December 31, 2001, there were over 6,000 holders of record of the Company's
stock.
ITEM 6 - SELECTED FINANCIAL DATA
- --------------------------------
Statement of Operations Data 2000 1999 1998 1997 1996
- ---------------------------- ---- ---- ---- ---- ----
Total Revenues $ 764,814 $ 704,556 $ 609,811 $ 2,075,386 $3,369,000
Operating Expenses 4,403,483 1,149,144 1,717,939 2,774,437 3,637,771
----------- ----------- ----------- ----------- ----------
Income/(Loss) from Operations (4,977,659) (444,588) (1,108,128) (921,060) (409,574)
----------- ----------- ----------- ----------- ----------
Other Income and Expenses (2,824,945) (248,149) (425,308) (173,430) (168,584)
----------- ----------- ----------- ----------- ----------
Net Income/(Loss) $(8,616,328) $ (692,737) $(1,533,436) $ 222,009 $ 140,803
----------- ----------- ----------- ----------- ----------
Weighted Average Shares 50,655,097 30,503,871 19,950,219 14,090,915 7,844,581
----------- ----------- ----------- ----------- ----------
Earnings (Loss) Per Share $ (0.17) $ (0.02) $ (0.08) $ 0.02 $ 0.02
----------- ----------- ----------- ----------- ----------
Balance Sheet Data
- ------------------
Working Capital $ 2,513 $ 190,581 $ (4,509) $ 14,477 $ 90,987
Total Other Net Assets 1,945,693 3,388,761 3,360,591 3,642,233 4,430,707
----------- ----------- ----------- ----------- ----------
Total Assets $ 1,948,206 $ 3,579,342 $ 3,356,082 $ 3,656,710 $4,521,694
----------- ----------- ----------- ----------- ----------
Current Liabilities $ 1,910,015 $ 982,542 $ 1,329,717 $ 1,631,682 $1,532,915
Long Term Debt $ 523,175 $ 500,000 $ 864,501 $ 523,217 $1,829,951
Total Other Net Liabilities 305,055 0 0 0 0
Total Stockholders Equity $ (790,039) $ 2,096,799 $ 1,161,864 $ 1,501,811 $1,158,828
----------- ----------- ----------- ----------- ----------
Total Liabilities & Equity $ 1,948,206 $ 3,579,342 $ 3,356,082 $ 3,656,710 $4,521,694
----------- ----------- ----------- ----------- ----------
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- --------------------------------------------------------------------------------
OF OPERATIONS
- -------------
Fiscal year 2001 was the Company's third year in operation as a Business
Development Corporation under the Investment Act of 1940.
Management believes that the key to a successful Business Development
Corporation is the ability to produce ongoing revenues and profits from
operating subsidiaries which will allow for an orderly due diligence process.
Results of Operations
- ---------------------
Revenues totaled $764,814 for the fiscal year ending December 31, 2000. For the
year ending December 31, 2001, revenues were $15,773. The decrease resulted an
adjustment made to reflect the correction of the Canyon Shadows Partnership.
Distributions from this partnership should have been credited against the
investment rather than a booking to Revenues.
General and administrative expenses for the year ended December 31, 2000 were
$2,827,709, as compared to $2,592,854 for the year ended December 31, 2001. The
decrease was due to reduced administrative and operating costs and this figure
also represents the judgments that were placed against the Company. It is
anticipated that these judgments will be settled for a much lesser amount in
the year 2002, which would result in a gain in a future filed financial
statement.
Bad debt expenses for year ended December 31, 2000 were $1,536,998, as compared
to $500,541 for the year ended December 31, 2001. The decrease resulted from
allowances reserved on doubtful receivables, the majority of which were written
off in 2000.
Depreciation and amortization expenses was $38,776 for the year ended December
31, 2000 as compared to $40,355 for the year ended December 31, 2001.
Interest expense was $918,756 for the year ended December 31, 2000 as compared
to $167,934 for the year ended December 31, 2001. The difference was primarily
due to the loss of market value associated with the conversion of convertible
debentures to stock in year 2000.
Loss on disposition of assets was $1,809,200 for year ended December 31, 2000 as
compared to $21,745 for year ended December 31, 2001. The difference was
primarily due to the write-off of the Vista Ramona property, which was lost due
to foreclosure in 2000.
6
Total operating loss was $8,616,328 for the year ending December 31, 2000 as
compared to $3,655,086 for the year ended December 31, 2001. This decrease
reflects the write-off of certain of the Company's investments, particularly the
soccer franchises in 2000, and lower level of operations in 2001.
We believe that inflation will not have any adversarial affect on the operations
of the Company.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ----------------------------------------------------
See index to financial statements included herein.
Changes in Financial Condition, Liquidity and Capital Resource
- --------------------------------------------------------------
For the twelve months ended December 31, 2001, the Company funded its operations
and capital requirements partially with its own working capital and partially
with proceeds from stock offerings. The Company currently has no lines of credit
available and is operating in a negative cash flow. Future operations will
depend on attracting additional investments into the Company, which are
essential to the Company's future.
ITEM 9 - CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND
- -----------------------------------------------------------------------
FINANCIAL DISCLOSURE
- --------------------
None
ITEM 10 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTION and CONTROL PERSONS,
- -----------------------------------------------------------------------
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
- -------------------------------------------------
Name Age Position Period of Service
Robert A. Braner 62 Interim President and Since 2000
Chairman of the Board
Donald Johnson 65 Interim CFO and Director Since 2001
Lisa Martinez 42 Accounting Administrator Since 1997
and Corporate Secretary
All directors hold office until the next annual shareholders meeting or until
their death, resignation, and retirement or until their successors have been
elected and qualified.
Mr. Robert A. Braner, 62, is serving as Interim President. He brings with him
more than thirty years experience in providing leadership to progressively
minded growth companies and internationally known organizations. Mr. Braner
combines diverse financial, management and creative leadership with solid and
diversified, extensive international experience in the cross-cultural business
process. He was the former President and Chief Operating Officer of Automobili
Lamborghini USA, Inc.
7
Mr. Donald Johnson, 65 is serving as Interim CFO. Mr. Johnson brings years
experience as CFO for both public and private Companies'. Mr Johnson brings vast
management experience, education, and financial expertise to the Company. Mr
Johnson's prior experience in managing turn around and tight cash flow
Companies' make him uniquely qualified to assist the Company with its turnaround
strategy.
Ms. Lisa Martinez, 42, is Corporate Secretary and the Accounting Administrator
of Peacock Financial Corporation. She has over 20 years of accounting experience
and has the managerial duties to handle the multitude of public and privates
business entities for Peacock through effective and organizational
administrative skills.
The Securities Exchange Act of 1934 requires all executive officers and
directors to report any changes in ownership of common stock of the Company to
the Securities and Exchange Commission and the Company.
ITEM 11 - EXECUTIVE COMPENSATION
- --------------------------------
The following table shows the amount of compensation earned for services in all
capacities to the Company for the last fiscal year for the executive officers at
December 31, 2001.
Names and Position Year Salary Paid
Robert Braner, President and
Chief Executive Officer and Director 2001 $250,000 $78,000
Donald Johnson, CFO & Director 2001 $100,000 $26,500
Lisa L. Martinez, Corporate Secretary 2000 $ 60,000 $52,750
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- ------------------------------------------------------------------------
At the close of business on December 31, 2001, the Company had 230,350,653
shares outstanding. There were no beneficial owners of more than five percent of
any class of the Company's voting securities.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------
None
8
ITEM 14 - EXHIBITS AND REPORTS ON FORM 8-K
- ------------------------------------------
Audited Financial Statements and Notes thereto are filed as part of this report.
On February 8, 1996, the Company filed Form 8-K containing its merger.
9
SIGNATURES
- ----------
Pursuant to the requirements of section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Broadleaf Capital Partners, Inc.
(formerly PEACOCK FINANCIAL CORPORATION)
By: /s/ Robert A. Braner
------------------------
Robert A. Braner
Interim President
Date: May 2, 2002
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.
Signature Title Date
- --------- ----- ----
/s/ Robert A. Braner
- ------------------------
Robert A. Braner Interim President 5/02/02
/s/ Lisa L. Martinez
- ------------------------
Lisa L. Martinez Secretary 5/02/02
10
BROADLEAF CAPITAL PARTNERS, INC.
AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2001 and 2000
CONTENTS
Independent Auditors' Report............................................... 3
Consolidated Balance Sheets................................................ 4
Consolidated Schedules of Investments...................................... 6
Consolidated Statements of Operations...................................... 8
Consolidated Statements of Stockholders' Equity (Deficit).................. 10
Consolidated Statements of Cash Flows...................................... 14
Notes to the Consolidated Financial Statements............................. 16
INDEPENDENT AUDITORS' REPORT
----------------------------
Broadleaf Capital Partners, Inc. and Subsidiaries
(Formerly Peacock Financial Corporation)
Board of Directors
San Jacinto, California
We have audited the accompanying consolidated balance sheets of Broadleaf
Capital Partners, Inc. and Subsidiaries (formerly Peacock Financial Corporation)
as of December 31, 2001 and 2000, including the consolidated schedules of
investments as of December 31, 2001 and 2000, and the related consolidated
statements of operations, changes in shareholders' equity, and cash flows for
the years ended December 31, 2001, 2000, and 1999. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall consolidated financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
As explained in Notes 4 and 6, "investments" and "other investments" consist of
loans to and investments in small businesses and limited partnerships totaling
$1,038,856 (89% of total assets) and $1,526,250 (78% of total assets) as of
December 31, 2001 and 2000, respectively. The values of these investments have
been estimated by the Board of Directors in the absence of readily ascertainable
market values. However, because of the inherent uncertainty of valuation, the
Board of Directors' estimate of values may differ significantly from the values
that would have been used had a ready market for the investments existed, and
the differences could be material.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Broadleaf Capital Partners, Inc. and Subsidiaries (formerly Peacock Financial
Corporation) as of December 31, 2001 and 2000, and the consolidated results of
their operations and their cash flows for the years ended December 31, 2001,
2000, and 1999, in conformity with accounting principles generally accepted in
the United States of America.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has a significant deficit in
working capital, has a deficit in stockholders' equity and has suffered
recurring losses to date, which raises substantial doubt about its ability to
continue as a going concern. Management's plans with regard to these matters are
also described in Note 2. The consolidated financial statements do not include
any adjustments that might result from the outcome of these uncertainties.
HJ & Associates, LLC
Salt Lake City, Utah
April 15, 2001
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Consolidated Balance Sheets
ASSETS
------
December 31,
--------------------------
2001 2000
------------ -----------
CURRENT ASSETS
Cash and cash equivalents (Note 3) $ 764 $ 2,513
Accounts receivable, net (Note 3) 24,855 27,000
Due from related party, net (Note 10) - 79,765
Prepaid expenses - 2,704
Notes receivable - related parties, net (Note 8 - 29,987
Notes receivable, net (Note 7) - 84,957
----------- -----------
Total Current Assets 25,619 226,926
----------- -----------
FIXED ASSETS, NET (Notes 3 and 5) 98,384 191,530
----------- -----------
OTHER ASSETS
Investments in limited partnerships (Note 4) 1,038,856 1,131,961
Other investments (cost - $1,031,867)(Note 6) - 394,289
Other assets 1,059 3,500
----------- -----------
Total Other Assets 1,039,915 1,529,750
----------- -----------
TOTAL ASSETS $ 1,163,918 $ 1,948,206
=========== ===========
The accompanying notes are an integral part of these consolidated financial statements.
4
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Consolidated Balance Sheets (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
December 31,
-------------------------------
2001 2000
------------ ------------
CURRENT LIABILITIES
Accounts payable $ 499,195 $ 473,496
Accounts payable - officers and directors 225,760 -
Accrued expenses 181,789 169,303
Accrued interest 176,638 68,873
Judgments payable (Note 12) 2,083,300 350,000
Notes payable - current portion (Note 9) 862,166 848,343
------------ ------------
Total Current Liabilities 4,028,848 1,910,015
------------ ------------
LONG-TERM DEBT
Notes payable - long term (Note 9) 500,000 523,175
------------ ------------
NET LIABILITIES IN EXCESS OF THE ASSETS OF
DISCONTINUED OPERATIONS (Note 18) 295,892 305,055
------------ ------------
Total Liabilities 4,824,740 2,738,245
------------ ------------
COMMITMENTS AND CONTINGENCIES (Note 12)
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock: 10,000,000 shares
authorized at $0.01 par value;
515,300 shares issued and outstanding 5,153 5,453
Common stock: 250,000,000 shares
authorized at $0.001 par value;
2,303,508 and 769,318 shares
issued and outstanding, respectively 2,304 769
Additional paid-in capital 12,302,987 11,466,818
Subscriptions receivable (347,337) (286,056)
Treasury stock - (8,180)
Accumulated deficit (15,623,929) (11,968,843)
------------ ------------
Total Stockholders' Equity (Deficit) (3,660,822) (790,039)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) $ 1,163,918 $ 1,948,206
============ ============
The accompanying notes are an integral part of these consolidated financial statements.
5
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Schedule of Investments
December 31, 2001
-----------------
Number of
Description of Shares Owned Fair
Company Business (or %) Cost Value
- ----------------------------- ---------------------- ------------------ --------------- --------------
Canyon Shadows Real estate 10% $ 1,131,961 $ 1,038,856 (e)
IPO/Emerging Growth
Company, LLC Start-up 33% 100,000 -0- (e)
San Diego Soccer
Development Dormant company 1,551,001 715,905 -0- (e)
Other 8,000 15,962 -0-
Bio-Friendly
Corporation Start-up 437,500 180,000 -0- (e)
Las Vegas Soccer
Development Start-up 1,020,000 20,000 -0- (e)
--------------- ---------------
Total $ 2,163,828 $ 1,038,856
=============== ===============
December 31, 2000
-----------------
Canyon Shadows Real estate 10% $ 1,131,961 $ 1,131,961 (d)
IPO/Emerging Growth
Company, LLC Start-up 33% 100,000 83,487 (a)
San Diego Soccer
Development Soccer franchise 1,551,001 715,905 108,850 (c)
Other 8,000 15,962 1,952 (b)
Bio-Friendly
Corporation Start-up 437,500 180,000 180,000 (d)
Las Vegas Soccer
Development Start-up 1,020,000 20,000 20,000 (d)
--------------- ---------------
Total $ 2,163,828 $ 1,526,250
=============== ===============
The accompanying notes are an integral part of these consolidated financial
statements.
6
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Schedule of Investments (Continued)
All of the above investments are considered non-income producing securities.
The aggregate gross unrealized depreciation for 2001 and 2000 are $1,015,905 and
$637,578, respectively.
(a) Non-public company, represents ownership in an LLC, fair value is
determined in good faith by the Company's Board of Directors based on a
variety of factors.
(b) Public market method of valuation based on trading price of stock at
year-end.
(c) The fair value of restricted shares is determined in good faith by the
Company's Board of Directors based on a variety of factors, including
recent and historical prices and other recent transactions.
(d) The Company's Board of Directors has valued this investment at cost, less
cash distributions to the Company from Canyon Shadows.
(e) At December 31, 2001, the Company's Board of Directors determined that the
Company is unlikely to recover its investments in these companies, and
elected to value the investments at zero.
The accompanying notes are an integral part of these consolidated financial
statements.
7
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Consolidated Statements of Operations
For the Year Ended
December 31,
-------------------------------------------------------------
2001 2000 1999
------------------ ------------------ -------------------
INVESTMENT INCOME
Management consulting fees $ - $ 525,000 $ 605,000
Property management and
administrative income - 12,525 7,070
Development income - - -
Website development - 104,900 -
Other income 15,125 122,389 92,486
------------------ ----------------- -------------------
Total Revenues 15,125 764,814 704,556
------------------ ----------------- -------------------
EXPENSES
General and administrative 2,519,661 2,827,709 918,374
Bad debt expense 500,541 1,536,998 196,791
Depreciation and amortization 40,182 38,776 33,979
------------------ ----------------- -------------------
Total Expenses 3,060,384 4,403,483 1,149,144
------------------ ----------------- -------------------
NET INVESTMENT (LOSS) (3,045,259) (3,638,669) (444,588)
------------------ ----------------- -------------------
OTHER INCOME (EXPENSE)
Interest income 26,062 11,969 8,371
Interest expense (167,934) (918,756) (126,932)
Realized gain on investments - 512,150 -
Unrealized loss on investments (394,289) (621,108) (92,223)
Loss on disposition of assets (43,324) (1,809,200) (37,365)
------------------ ----------------- -------------------
Total Other Income (Expense) (579,485) (2,824,945) (248,149)
------------------ ----------------- -------------------
LOSS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES AND
DISCONTINUED OPERATIONS (3,624,744) (6,463,614) (692,737)
Income taxes (Note 2) - - -
------------------ ----------------- -------------------
LOSS FROM CONTINUING OPERATIONS (3,624,744) (6,463,614) (692,737)
------------------ ----------------- -------------------
INCOME (LOSS) FROM DISCONTINUED
OPERATIONS NET OF ZERO TAX EFFECT
(Note 18) (30,342) (2,152,714) -
------------------ ----------------- -------------------
NET LOSS (3,655,086) (8,616,328) (692,737)
------------------ ----------------- -------------------
OTHER COMPREHENSIVE (LOSS)
Loss on treasury stock - (274,287) -
Dividends (22,479) (22,812) (188,786)
------------------ ----------------- -------------------
NET COMPREHENSIVE LOSS $ (3,677,565) $ (8,913,427) $ (881,523)
================== ================= ===================
The accompanying notes are an integral part of these consolidated financial
statements.
8
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Consolidated Statements of Operations (Continued)
For the Year Ended
December 31,
-------------------------------------------------------------
2001 2000 1999
------------------ ------------------ -------------------
BASIC LOSS PER SHARE
Continuing operations $ (2.76) $ (12.76) $ (2.27)
Discontinued operations (0.02) (4.25) -
------------------ ----------------- -------------------
Basic Loss Per Share $ (2.78) $ (17.01) $ (2.27)
================== ================= ===================
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 1,313,955 506,551 305,039
================== ================= ===================
The accompanying notes are an integral part of these consolidated financial
statements.
9
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Consolidated Statements of Stockholders' Equity (Deficit)
December 31, 2001, 2000 and 1999
Preferred Stock Common Stock Additional
------------------------ ------------------------ Paid-in Subscriptions Accumulated
Shares Amount Shares Amount Capital Receivable Deficit
------------ ---------- ----------- ---------- ----------- ------------- -----------
Balance, December 31, 1998 672,300 $ 6,723 207,504 $ 208 $3,540,424 $ - $(2,385,491)
Common stock issued for cash
and subscription receivable - - 140,080 140 1,802,966 (443,500) -
Common stock issued
for services - - 7,596 8 161,792 - -
Common stock issued on
conversion of debentures - - 10,706 10 59,406 - -
Common stock issued
for investments - - 12,500 12 124,988 - -
Common stock issued in
conversion of preferred stock (2,000) (20) 20 1 19 - -
Common stock canceled - - (300) (1) (5,808) - -
Cash received on subscriptions
receivable - - - - - 116,445 -
Accrued dividends - - - - (23,172) - -
Dividends paid - - - - (165,614) - -
Net loss for the year ended
December 31, 1999 - - - - - - (692,737)
---------- ------- --------- --------- ----------- ---------- -----------
Balance, December 31, 1999 670,300 $ 6,703 378,106 $ 378 $ 5,495,001 $ (327,055) $(3,078,228)
---------- ------- --------- --------- ----------- ---------- -----------
The accompanying notes are an integral part of these consolidated financial
statements.
10
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Consolidated Statements of Stockholders' Equity (Deficit) (Continued)
December 31, 2001, 2000 and 1999
Preferred Stock Common Stock Additional
-------------------------- -------------------------- Paid-in Subscriptions Accumulated
Shares Amount Shares Amount Capital Receivable Deficit
------------ ------------ ------------ ------------ ------------ ------------ ------------
Balance, December 31, 1999 670,300 $ 6,703 378,106 $ 378 $ 5,495,001 $ (327,055) $ (3,078,228)
Common stock issued for cash
and subscription receivable - - 223,308 223 4,617,973 (158,001) -
Common stock issued
for services - - 12,820 13 248,387 - -
Common stock issued on
conversion of debentures - - 145,772 146 619,145 - -
Common stock issued
for investments - - 8,000 8 169,992 - -
Common stock issued in
lieu of interest - - 62 - 6,208 - -
Common stock issued in
conversion of preferred stock (125,000) (1,250) 1,250 1 1,249 -
Accrued dividends - - - - (22,812) - -
Stock offering costs - - - - (202,325) - -
Cash received on
subscriptions receivable - - - - - 199,000 -
Additional interest recorded
on convertible debentures - - - - 534,000 - -
------------ ------------ ----------- ------------ ------------ ------------ ------------
Balance Forward 545,300 $ 5,453 769,318 $ 769 $ 11,466,818 $ (286,056) $ (3,078,228)
------------ ------------ ----------- ------------ ------------ ------------ ------------
The accompanying notes are an integral part of these consolidated financial
statements.
11
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Consolidated Statements of Stockholders' Equity (Deficit) (Continued)
December 31, 2001, 2000 and 1999
Preferred Stock Common Stock Additional
---------------------- --------------------- Paid-in Subscriptions Accumulated
Shares Amount Shares Amount Capital Receivable Deficit
---------- -------- --------- -------- ------------ ------------- ------------
Balance Forward 545,300 $ 5,453 769,318 $ 769 $ 11,466,818 $ (286,056) $ (3,078,228)
Unrealized loss on treasury stock -- -- -- -- -- -- (69,222)
Realized loss on treasury stock -- -- -- -- -- -- (205,065
Net loss for the year ended
December 31, 2000 -- -- -- -- -- -- (8,616,328)
---------- -------- --------- -------- ------------ ------------ ------------
Balance, December 31, 2000 545,300 5,453 769,318 769 11,466,818 (286,056) (11,968,843)
Debentures converted to common
stock -- -- 1,005,298 1,005 512,907 (4,000) --
Common shares issued for cash -- -- 321,767 322 260,912 -- --
Common shares issued for
subscriptions receivable -- -- 210,750 211 84,526 (84,737) --
Cash received on subscriptions
receivable -- -- -- -- -- 27,455 --
Preferred shares cancelled (20,000) (200) -- -- 200 -- --
Preferred shares converted to
common shares on 1-for-1 basis (10,000) (100) 100 1 99
Common shares cancelled -- -- (3,725) (4) 4 -- --
---------- -------- --------- -------- ------------ ------------ ------------
Balance Forward 515,300 $ 5,153 2,303,508 $ 2,304 $ 12,325,466 $ (347,338) $(11,968,843)
---------- -------- --------- -------- ------------ ------------ ------------
The accompanying notes are an integral part of these consolidated financial
statements.
12
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Consolidated Statements of Stockholders' Equity (Deficit) (Continued)
December 31, 2001, 2000 and 1999
Preferred Stock Common Stock Additional
------------------------- ------------------------ Paid-in Subscriptions Accumulated
Shares Amount Shares Amount Capital Receivable Deficit
---------- ------------ ---------- ----------- ------------ ------------- ------------
Balance Forward 515,300 $ 5,153 2,303,508 $ 2,304 $ 12,325,466 $ (347,338) $11,968,843)
Dividends accrued on preferred
shares - - - - (22,479) - -
Net loss for the year ended
December 31, 2001 - - - - - - (3,655,086)
---------- ------------ ---------- ----------- ------------ ------------- ------------
Balance, December 31, 2001 515,300 $ 5,153 2,303,508 $ 2,304 $ 12,302,987 $ (347,338) $15,623,929)
========== ============ ========== ============ ============ ============= ============
The accompanying notes are an integral part of these consolidated financial
statements.
13
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Consolidated Statements of Cash Flows
December 31, 2001, 2000 and 1999
For the Year Ended
December 31,
----------------------------------------------------------
2001 2000 1999
-------------- ------------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss from continuing operations $ (3,624,744) $ (6,463,614) $ (692,737)
Adjustments to reconcile net loss to net cash
(used) by operating activities:
Depreciation and amortization 40,182 38,776 33,979
Bad debt expense 500,541 1,536,998 196,791
Loss on disposal of assets 43,324 1,809,200 37,365
Loss on investments, net 394,289 108,958 92,223
Judgment-related expenses 2,083,300 -- --
Additional interest on convertible debentures -- 534,000 --
Common stock issued for services -- 248,400 161,800
Discontinued operations:
Net loss (30,342) (2,152,714) --
Depreciation and amortization 9,640 6,683 --
Bad debts -- 9,987 --
Changes in operating assets and liabilities:
(Increase) decrease in accounts and
notes receivable 2,145 19,828 99,147
(Increase) decrease in notes receivable
- related party -- (185,476) (61,091)
(Increase) decrease in other assets 5,146 (62) (18,950)
Increase (decrease) in accounts payable 25,699 314,224 (68,471)
Increase (decrease) in other liabilities 256,976 671,006 (62,504)
Increase (decrease) in discontinued
operation reserve (9,163) 288,385 --
-------------- ------------- ------------
Net Cash Used in Operating Activities (303,008) (3,215,421) (282,448)
-------------- ------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of licensing rights -- (150,000) --
Purchase of investments (399,930) (181,543) (662,348)
Notes receivable - advances -- (1,189,611) (324,007)
Notes receivable - received -- 30,343 92,500
Purchase of property and equipment -- (193,149) (7,084)
-------------- ------------- ------------
Net Cash Used in Investing Activities (399,930) (1,683,960) (900,939)
-------------- ------------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of notes payable -- (306,590) (94,294)
Proceeds from long-term borrowings 412,500 843,500 --
Repurchase of stock -- (282,467) (5,809)
Stock offering costs -- (202,325) --
Receipt of subscription receivable 27,455 199,000 --
Stock issued for cash 261,234 4,460,195 1,474,071
-------------- ------------- ------------
Net Cash Provided by Financing Activities $ 701,189 $ 4,711,313 $ 1,373,968
-------------- ------------- ------------
The accompanying notes are an integral part of these consolidated financial statements.
14
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Consolidated Statements of Cash Flows (Continued)
December 31, 2001, 2000 and 1999
For the Year Ended
December 31,
-------------------------------------------
2001 2000 1999
--------- ---------- -----------
NET DECREASE IN CASH $ (1,749) $(188,068) $190,581
CASH, BEGINNING OF YEAR 2,513 190,581 -
-------- --------- --------
CASH, END OF YEAR $ 764 $ 2,513 $190,581
======== ========= ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Interest paid $ 472 $ 357,123 $269,728
Income taxes paid $ - $ - $ -
SUPPLEMENTAL DISCLOSURE OF NON-CASH
ACTIVITIES
Common stock issued in conversion
of debentures and interest $509,912 $ 625,499 $ 59,416
Common stock issued for services $ - $ 248,400 $161,800
Common stock issued for investments $ - $ 170,000 $125,000
Purchase of fixed assets through issuance
of notes payable $ - $ 31,195 $ -
Dividends paid through investment stock $ - $ - $165,614
The accompanying notes are an integral part of these consolidated financial
statements.
15
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Notes to the Consolidated Financial Statements
December 31, 2001, 2000 and 1999
NOTE 1 - COMPANY BACKGROUND
The consolidated financial statements include those of Broadleaf
Capital Partners, Inc. , a Nevada company, (Broadleaf), and its
wholly-owned subsidiaries, Peacock Real Estate Development Corporation
(PREDC), Peacock International Corporation (PIC), DotCom Ventures, LLC
(DotCom), Peacock Sports, Inc. (PSI), Broadleaf Asset Management
(BAM), Broadleaf Financial Services (BFS), and Brand Asset Management
(Brand). The consolidated financial statements also include its
majority-owned subsidiaries, Bay Area Soccer Development Corporation
(Bay Area) (70%), Orange County Soccer Development Corporation
(Orange) (70%), Riverside County Soccer Development Corporation
(Riverside) (53%), and iNetPartners, Inc. (iNet) (51%). Collectively,
they are referred to herein as "the Company".
Broadleaf (Formerly Peacock Financial Corporation) was incorporated
under the laws of the State of Colorado on February 16, 1984.
Broadleaf was incorporated for the purpose of creating a vehicle to
obtain capital to seek out, investigate and acquire interests in
products and businesses which may have a potential for profit. In
March, 2002, Broadleaf changed its state of domicile to Nevada. (See
Note 21)
PREDC, a wholly-owned subsidiary, was originally formed on July 29,
1993. On October 22, 1999, the name was changed from Peacock Financial
Corporation (California) to Peacock Real Estate Development
Corporation. PREDC has had no significant operations since inception.
PIC, a wholly-owned subsidiary, was formed on December 8, 1997. It has
had no operations to date, but was formed to invest and trade in
securities on an international basis.
DotCom was organized on July 23, 1999. Peacock acquired its initial
50% ownership with an initial investment of $112,203. On January 5,
2000, the Company acquired the remaining 50% ownership by granting
options to acquire a total of 500,000 restricted common shares of the
Company at $0.10 per share. DotCom was organized for the purposes of
conducting an internet production company and to consult start-up and
emerging growth companies with their internet strategies. During the
year ended December 31, 2001, DotCom had no significant operations.
PSI was incorporated in January 2000 to hold and manage investments in
professional sports. As of December 31, 2001, PSI had no significant
operations.
In January 2000, the Company acquired an 85% ownership interest for
$50,000 cash in Orange County Soccer Development Corporation (Orange).
The investment was recorded as a purchase. At December 31, 2001,
Orange discontinued operations (Note 15).
In February 2000, the Company acquired an 85% ownership interest for
$100,000 cash in Bay Area Soccer Development Corporation (Bay Area).
The investment was recorded as a purchase. At December 31, 2001, Bay
Area discontinued its operations (Note 15).
16
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Notes to the Consolidated Financial Statements
December 31, 2001, 2000 and 1999
NOTE 1 - COMPANY BACKGROUND (Continued)
In February 2000, the Company acquired a 53% ownership interest in
Riverside County Soccer Development Corporation (Riverside) for
$6,000. The investment was recorded as a purchase. At December 31,
2001, Riverside discontinued its operations (Note 15).
Broadleaf holds a 51% interest in iNet as of December 31, 2001. iNet
was organized under the laws of the State of California on December
15, 1999 with the intent to develop Internet e-commerce applications
for both the new and used automotive markets. As of December 31, 2001,
iNet had no significant operations.
Broadleaf's remaining subsidiaries, BAM, BFS, and Brand, were all
incorporated in 2001. These subsidiaries have had no operations to
date, but were formed with the intent to help forward the Company's
business strategy in 2002.
On September 15, 1998, the Company filed with the Securities and
Exchange Commission to become a Business Development Corporation as
defined under the Investment Act of 1940. Simultaneously, the Company
registered an offering circular with the SEC for 13,000,000 shares of
common stock under Regulation E of the Investment Act to raise capital
and to make investments in real estate and in eligible portfolio
companies. The Company participates in the formation of, and invests
in, emerging or early-stage companies in various fields of business by
arranging for and contributing capital and providing management
assistance.
NOTE 2 - GOING CONCERN
As reported in the consolidated financial statements, the Company has
an accumulated deficit of $15,623,929 and $11,968,843 as of December
31, 2001 and 2000, respectively. The Company incurred losses of
$3,655,086 and $8,616,328 for the years ended December 31, 2001 and
2000, respectively. The Company also has certain debts that are in
default at December 31, 2001. The Company's stockholders' deficit at
December 31, 2001 and 2000 was $ 3,660,822 and $790,039, respectively,
and its current liabilities exceeded its current assets by $4,003,229
and $1,683,089, respectively.
These factors create uncertainty about the Company's ability to
continue as a going concern. The ability of the Company to continue as
a going concern is dependent on the Company obtaining adequate capital
to fund operating losses until it becomes profitable. If the Company
is unable to obtain adequate capital it could be forced to cease
operations.
17
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Notes to the Consolidated Financial Statements
December 31, 2001, 2000 and 1999
NOTE 2 - GOING CONCERN (Continued)
In order to continue as a going concern, develop and generate revenues
and achieve a profitable level of operations, the Company will need,
among other things, additional capital resources. Management's plans
to obtain such resources for the Company include (1) raising
additional capital through sales of common stock, (2) converting
promissory notes into common stock and (3) entering into acquisition
agreements with profitable entities with significant operations. In
addition, management is continually seeking to streamline its
operations and expand the business through a variety of industries,
including real estate and financial management. However, management
cannot provide any assurances that the Company will be successful in
accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent
upon its ability to successfully accomplish the plans described in the
preceding paragraph and eventually secure other sources of financing
and attain profitable operations. The accompanying consolidated
financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going concern.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the significant accounting policies consistently applied
in the preparation of the accompanying consolidated financial
statements follows:
a. Accounting Method
Broadleaf Capital Partners, Inc. (the Company) is a closed-end
management investment company organized as a Nevada corporation. The
Company has elected to be regulated as a business development company
under the Investment Company Act of 1940, as amended (the 1940 Act).
Although business development companies should prepare their financial
statements in conformity with accounting principles generally accepted
in the United States of America, and are subject to audit as are other
investment companies, the statement presentation of some companies may
need to be tailored to present the information in a manner most
meaningful to their particular group of investors. Since debt is a
significant item, the Company concluded that a balance sheet would be
more appropriate than a statement of net assets. Also, the Company
believes Article 5 of Regulation S-X applies.
b. Cash and Cash Equivalents
Cash equivalents include short-term, highly liquid investments with
maturities of three months or less at the time of acquisition.
18
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Notes to the Consolidated Financial Statements
December 31, 2001, 2000 and 1999
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
c. Fixed Assets
Fixed assets are recorded at cost. Major additions and improvement are
capitalized. The cost and related accumulated depreciation of
equipment retired or sold are removed from the accounts and any
differences between the undepreciated amount and the proceeds from the
sale are recorded as gain or loss on sale of assets. Depreciation is
computed using the straight-line method over the estimated useful life
of the assets as follows:
Description Estimated Useful Life
----------- ---------------------
Furniture and fixtures 5 to 7 years
Computers and software 5 years
Automobiles 5 years
d. Basic and Diluted Loss Per Share
2001 2000 1999
------------- ------------- -----------
Loss (numerator) $ (3,655,086) $ (8,616,328) $ (692,737)
Shares (denominator) 1,313,955 50,655 30,504
Per share amount $ (2.78) $ (17.01) $ (2.27)
The computations of basic loss per share of common stock are based
on the weighted average number of common shares outstanding during
the period of the consolidated financial statements. Common stock
equivalents, consisting of convertible debt and preferred shares,
have not been included in the calculation as their effect is
antidilutive for the periods presented.
e. Change in Accounting Principles
The Company has adopted the provisions of FASB Statement No. 138
"Accounting for Certain Derivative Instruments and Hedging
Activities, (an amendment of FASB Statement No. 133.)" Because the
Company had adopted the provisions of FASB Statement No. 133,
prior to June 15, 2000, this statement is effective for all fiscal
quarters beginning after June 15, 2000. The adoption of this
principle had no material effect on the Company's consolidated
financial statements.
19
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Notes to the Consolidated Financial Statements
December 31, 2001, 2000 and 1999
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
e. Change in Accounting Principles
The Company has adopted the provisions of FASB Statement No. 140
"Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities (a replacement of FASB Statement No.
125.)" This statement provides accounting and reporting standard for
transfers and servicing of financial assets and extinguishments of
liabilities. This statement is effective for transfers and servicing
of financial assets and extinguishments of liabilities occurring after
March 31, 2001. This statement is effective for recognition and
reclassification of collateral and for disclosures relating to
securitization transactions and collateral for fiscal years ending
after December 15, 2000. The adoption of this principle had no
material effect on the Company's consolidated financial statements.
The Company has adopted the provisions of FIN 44 "Accounting for
Certain Transactions Involving Stock Compensation (an interpretation
of APB Opinion No. 25.)" This interpretation is effective July 1,
2000. FIN 44 clarifies the application of Opinion No. 25 for only
certain issues. The adoption of this principle had no material effect
on the Company's consolidated financial statements.
f. Principles of Consolidation
The consolidated financial statements include those of Broadleaf
Capital Partners, Inc., a Nevada corporation, and its wholly-owned
subsidiaries, Peacock Real Estate Development Corporation (California)
(PREDC), Peacock International Corporation (Bahamas) (PIC), DotCom
Ventures, LLC (DotCom), Peacock Sports, Inc. (PSI), Broadleaf Asset
Management (BAM), Broadleaf Financial Services (BFS), and Brand Asset
Management (Brand). They also include the majority owned subsidiaries,
Bay Area Soccer Development Corporation (Bay Area) (80%), Orange
County Soccer Development Corporation (Orange) (85%), Riverside County
Soccer Development Corporation (Riverside) (53%), and iNet Partners,
Inc. (iNet) (51%). All significant intercompany accounts and
transactions have been eliminated.
g. Estimates
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.
20
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Notes to the Consolidated Financial Statements
December 31, 2001, 2000 and 1999
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
h. Provision for Taxes
At December 31, 2001, the Company had an accumulated deficit of
$15,623,929 which includes net operating loss carryforwards that may
be offset against future taxable income through 2021. No tax benefit
has been reported in the consolidated financial statements as the
Company believes there is a 50% or greater chance the net operating
loss carryforwards will expire unused. Accordingly, the potential tax
benefits of the net operating loss carryforwards are offset by a
valuation allowance of the same amount.
The income tax benefit differs from the amount computed at federal
statutory rates of approximately 38% as follows:
For the Years Ended
December 31,
------------------------------------
2001 2000 1999
--------- ------------ -----------
Income tax benefit at statutory rate $ 62,690 $ 3,274,205 $ 263,240
Change in valuation allowance (62,690) (3,274,205) (263,240)
--------- ------------ -----------
$ - $ - $ -
========= ============ ===========
Deferred tax assets (liabilities) are comprised of the following:
For the Years Ended
December 31,
-----------------------------------------
2001 2000 1999
------------ ------------ -------------
Income tax benefit at statutory rate $ 4,610,850 $ 4,548,160 $ 1,273,955
Change in valuation allowance (4,610,850) (4,548,160) (1,273,955)
------------ ------------- -------------
$ - $ - $ -
============ ============ =============
Due to the change in ownership provisions of the Tax Reform Act of
1986, net operating loss carryforwards for Federal income tax
reporting purposes are subject to annual limitations. Should a change
in ownership occur, net operating loss carryforwards may be limited as
to use in the future.
i. Advertising
The Company follows the policy of charging the costs of advertising to
expense as incurred.
21
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Notes to the Consolidated Financial Statements
December 31, 2001, 2000 and 1999
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
j. Revenue Recognition
The Company receives shares in certain companies for providing
capital and investment services. The Company records management
consulting income based on the fair value of the shares received.
k. Accounts and Notes Receivable
Accounts and notes receivable are shown net of an allowance for
doubtful accounts of $2,068,387 and $1,760,100 as of December 31,
2001 and 2000, respectively.
l. Investment Valuation
The Company's loans, net of participations and any unearned
discount, are considered investments under the 1940 Act and are
recorded at fair value. Since no ready market exists for these
loans, the fair value is determined in good faith by the Board of
Directors. In determining the fair value, the Company and Board of
Directors consider factors such as the financial condition of the
borrower, the adequacy of the collateral and individual credit
risks.
Investments in equity securities are recorded at fair value,
represented as cost, plus or minus unrealized appreciation or
depreciation, respectively. The carrying values of investments
that have no readily-determinable market values are determined by
the Board of Directors, based upon its analysis of the assets and
revenues of the underlying investee companies.
Because of the inherent uncertainty of valuations, the Board of
Directors' estimates of the values of the investments may differ
significantly from the values that would have been used had a
ready market for the investments existed and the differences could
be material.
m. Reclassifications
Certain reclassifications have been made to prior year balances to
conform with the current year presentation.
n. Restricted Securities
All investments in securities are restricted shares, and have been
valued by the Board of Directors. In determining investment values,
the Board considers many pertinent factors, including the results of
operations of each company.
22
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Notes to the Consolidated Financial Statements
December 31, 2001, 2000 and 1999
NOTE 4 - INVESTMENTS IN LIMITED PARTNERSHIPS
During 1987, the Company formed a limited partnership agreement
where the Company is the general partner, holding a 15% interest.
The partnership was formed to acquire and develop approximately
500 acres of land in San Jacinto, California. The general partner
was not required to make an initial capital contribution, thus the
initial investment was recorded at $0. The Board of Directors has
determined that this investment is unlikely to produce income in
the near future, and has valued the investment at $0 as of
December 31, 2001.
On June 29, 1992, the Company acquired an interest in a limited
partnership. The partnership intends to seek out and consummate
certain real-estate investment opportunities. The Company acts as
the general partner and holds a 1% interest in the partnership. As
of December 31, 2001, the Company had recognized no income or
losses from its investment in this partnership. The Board of
Directors has determined that this investment is unlikely to
produce income and has valued the investment at $0 as of December
31, 2001 and 2000.
In December 1995, the Company acquired an interest in a limited
liability company. The LLC's intent is to acquire and develop
certain residential subdivisions. The Company retains a 50%
ownership in the limited liability company. The Company's Board of
Directors determined this investment was unlikely to produce
income in the near future, and has valued the investment at $0 at
December 31, 2001 and 2000.
During 1995, the Company received a $975,000 loan that converted
to a grant from the City of Riverside to acquire and rehabilitate
a 120-unit apartment complex (see Note 12). During April 1996, the
Company was awarded $2,400,000 in Federal tax credits relating to
this project. During December 1996, the Company sold the completed
project to a tax credit partnership named Canyon Shadows, L.P.,
retaining a 1% interest as general partner, and receiving a
$905,000 capital account in the partnership. During 1999, a
$70,000 note held by the Company was transferred to Canyon
Shadows, L.P., which was recorded as a capital distribution to the
Company (see Note 12). Additional costs were incurred by the
Company on behalf of the partnership resulting in a total
investment in Canyon Shadows, L.P. of $1,131,961 at December 31,
2000. The Company's Board of Directors determined that the value
of this investment approximated the current interest in the
partnership. The valuation was based upon projected future
occupancy of the apartment unit. In 2001, Canyon Shadows
distributed $93,105 to the Company, leaving a balance of
$1,038,856 at December 31, 2001.
23
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Notes to the Consolidated Financial Statements
December 31, 2001, 2000 and 1999
NOTE 5 - FIXED ASSETS
Fixed assets consist of the following:
December 31,
--------------------------------------
2001 2000
------------------ ------------------
Furniture and fixtures $ 5,823 $ 38,039
Computers and software 126,865 194,212
Other equipment 22,815 56,195
------------------ ------------------
155,503 288,446
Accumulated depreciation (57,119) (96,916)
------------------ ------------------
Net fixed assets $ 98,384 $ 191,530
================== ==================
Depreciation expense for the years ended December 31, 2001 and
2000 was $40,182 and $38,776, respectively.
NOTE 6 - OTHER INVESTMENTS
During the year ended December 31, 1998, the Company became a
Business Development Corporation whereby the Company is able to
raise capital under a simplified and cost-effective informational
filing with the Securities and Exchange Commission for the purpose
of investing in small businesses and government securities. The
Company intends to provide capital and management consulting
services for these businesses with the long-term intent of helping
the businesses go public.
On October 19, 1998, the Company issued 1,000,000 shares of its
outstanding common stock valued at $100,000 to acquire an
approximate 33% interest in IPO/Emerging Growth Company, LLC.
(IPO). The Company's Board of Directors determined the approximate
value of this investment at December 31, 2000 to be $83,487. In
2001, the Company's Board of Directors determined its investment
in IPO was unlikely to produce income in the near future, and
elected to value the investment at $0 as of December 31, 2001.
On October 23, 1998, the Company issued 820,000 shares of its
outstanding common stock valued at $100,000 to acquire an
approximate 5% interest in San Diego Soccer Development Corp.
(SDSDC). On March 11, 1999, the Company issued an additional
500,000 shares of its common stock valued at $50,000 to acquire
200,000 additional shares of SDSDC. In addition, the Company
received an additional 400,000 shares of SDSDC during 1999, valued
at $200,000, as an incentive for providing capital to SDSDC. As
part of the investment agreement, the Company distributed a total
of 294,999 shares of its SDSDC stock to the Company's shareholders
as a dividend valued at $165,614.
24
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Notes to the Consolidated Financial Statements
December 31, 2001, 2000 and 1999
NOTE 6 - OTHER INVESTMENTS (Continued)
During 2000, the Company acquired an additional 1,050,000
restricted shares of SDSDC for an additional cost of $531,519.
1,000,000 of those shares were received as an incentive for
providing capital, and were recorded at $500,000 or $0.50 per
share. A decline in the value of the shares was recorded at
December 31, 2000 of $607,055 bringing the total value of the
1,555,001 shares at December 31, 2000 to $108,850. The Company's
shares represent an approximate 15% ownership in SDSDC at December
31, 2001. Management of the Company does not exercise any
influence or control over management of SDSDC. During 2001, the
Company's Board of Directors determined its investment in SDSDC
was unlikely to produce income in the near future, and elected to
value the investment at $0 as of December 31, 2001.
On February 2, 1999, the Company issued 750,000 shares of its
outstanding common stock valued at $75,000 to acquire
approximately 20% (2,000,000 shares) of the outstanding shares of
Solutions Media, Inc. (Solutions). On June 15, 1999, the Company
entered into a separate agreement whereby the 750,000 shares of
the Company were returned for cancellation in exchange for the
return of the 2,000,000 shares of Solutions. As part of the
agreement, the Company received 800,000 shares of Solutions as an
investment fee valued at $400,000. The 800,000 shares of Solutions
represented an approximate ownership of 2% at December 31, 1999.
In 2000, the Company's Board of Directors determined this
investment was unlikely to produce income in the near future, and
elected to value the investment at $0. The Board determined there
was no change in the value of this investment in 2001.
During 1999, the Company purchased 1,020,000 shares of Las Vegas
Soccer Development Corporation (LVSDC) for $20,000 cash, which
represents an approximate ownership of 25% at December 31, 2000.
The Company's Board of Directors has valued this investment at $0
as of December 31, 2001.
During 2000, the Company invested a total of $180,000 in
Bio-Friendly Corporation (Bio-Friendly) for 437,500 shares of
Bio-Friendly common stock, which the Company's Board of Directors
determined to be the approximate value of this investment at
December 31, 2000. These shares were valued at $0 in 2001 by the
Company's Board of Directors.
25
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Notes to the Consolidated Financial Statements
December 31, 2001, 2000 and 1999
NOTE 7 - NOTES RECEIVABLE
Notes receivable consist of the following at December 31, 2001 and
2000:
2001 2000
-------------- ------------
Note receivable at 10%, secured by stock,
principal and interest due June 12, 2001,
currently in default. $ - $ 72,457
Note receivable at 10%, unsecured, principal
and interest due July 1, 2000, currently in
default. - 25,000
-------------- ------------
Total Notes Receivable - 97,457
Less: Allowance for Bad Debts - (12,500)
-------------- ------------
Notes Receivable, net $ - $ 84,957
============== ============
NOTE 8 - NOTES RECEIVABLE - RELATED PARTIES
Notes receivable - related parties consist of the following at
December 31, 2001 and 2000:
2001 2000
------------- -------------
Note receivable at 8%, due from San Diego
Soccer Development Corporation, unsecured,
principal and interest due on demand $ - $ 100,000
Credit line receivable at 10%, due from San Diego Soccer
Development Corporation, secured by shares of SDSDC
representing 53% of the outstanding shares, originally
due December 31, 2000, currently in default. - 694,612
Note receivable at 7%, due from PR Equities, Ltd.
(equity investment), unsecured, principal and
interest due December 31, 2001. - 565,223
Note receivable from former employee, secured
by 100,000 shares of the Company's stock,
due October 1, 2000, currently in default - 22,232
Other - 17,880
------------- --------------
Total Notes Receivable - Related Parties - 1,399,947
Less: Allowance for uncollectible portion - (1,369,960)
------------- --------------
Long-Term Notes Receivable - Related Parties $ - $ 29,987
============= ==============
26
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Notes to the Consolidated Financial Statements
December 31, 2001, 2000 and 1999
NOTE 9 - NOTES PAYABLE
Notes payable consist of the following at December 31, 2001 and 2000:
2001 2000
-------------- -------------
Note payable at 5%, secured by an assignment of partnership cash,
interest payable quarterly, principal due January 1, 2007,
convertible to common stock. $ 500,000 $ 500,000
Note payable at variable rate (18.0% at
December 31, 2000) collateralized by deed
of trust on real property. Lump sum payment
was due May 21, 1999, currently in default. 86,854 86,854
Note payable at 10%, secured by deed of trust,
due March 31, 1996, currently in default. 65,000 65,000
Note payable at 20.28%, secured by vehicles,
payable in monthly installments of $832,
transferred to related party in 2002. - 27,914
Debentures at 10%, unsecured, convertible into common shares at
rates of $2.00 to $10.00 per share at the option of the holder,
due December 31, 2000. 700,312 681,750
Others 10,000 10,000
-------------- -------------
Total Notes Payable 1,362,166 1,371,518
Less: Current Portion (862,166) (848,343)
-------------- -------------
Long-Term Notes Payable $ 500,000 $ 523,175
============== =============
NOTE 10 - RELATED PARTY TRANSACTIONS
The Company is a partner in several limited partnerships (Note 4). The
Company occasionally pays for operating expenses of the partnerships
and is reimbursed as funds become available to the partnerships.
The Company is owed certain amounts from a former officer of the
Company. The amounts are non-interest bearing and due on demand. At
December 31, 2000 these amounts totaled $223,172 and an allowance for
bad debts of $143,407 provided for the amounts determined to be
uncollectible. These amounts totaled $212,922 at December 31, 2001 and
due to the uncertainty of collection, these amounts have been allowed
for in full, bringing the net amount to $0 at December 31, 2001.
27
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Notes to the Consolidated Financial Statements
December 31, 2001, 2000 and 1999
NOTE 11 - PROFIT SHARING PLAN
In 1989, the Company adopted a profit sharing plan covering all
eligible employees. Contributions are made at the discretion of the
Board of Directors. There were no contributions to the plan for the
years ended December 31, 2001 and 2000.
NOTE 12 - COMMITMENTS AND CONTINGENCIES
a. General Partner Obligations
---------------------------
The Company serves as general partner in several real estate
development partnerships. The Company may be held liable for certain
liabilities, although because the amounts are minimal and the entities
are limited liability companies, management does not feel that the
potential liabilities will have a material impact on the Company.
b. Wrap Around Mortgage
--------------------
The Company has sold a property subject to a mortgage. The mortgage
has not been fully assumed by the buyer. If the buyer defaults on the
mortgage, the Company may be liable for the balance owing.
c. Housing Grant
-------------
In April 1995, the Company acquired a 120-unit apartment complex using
a $975,000 loan that was converted to a grant from the City of
Riverside, California. The loan is non-recourse and is secured by a
second trust deed on the property. If the Company meets certain
requirements pertaining to the complex, which have been stipulated by
the city, the loan will be forgiven in its entirety. As of December
31, 2001, management has complied with all of the requirements and
believes that the repayment of $905,000 (the grant portion) of the
$975,000 is highly remote.
d. Litigation
----------
At December 31, 2001, the Company was party to certain legal
proceedings, resulting in judgments payable totaling $2,083,300. The
following is a summary of those payables:
During the year, Bank of Hemet received a legal judgment against the
Company totaling $932,006. In 2000, however, the Company had
negotiated a settlement in this case for $100,000, and booked this
amount as a contingent liability at December 31, 2000. In 2001, the
Company defaulted on this settlement. As a result, in the current
year, the Company recorded the full amount of the judgment, less
payments made by the Company to Bank of Hemet. At December 31, 2001,
this liability is recorded at $886,006.
28
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Notes to the Consolidated Financial Statements
December 31, 2001, 2000 and 1999
NOTE 12 - COMMITMENTS AND CONTINGENCIES (Continued)
d. Litigation (Continued)
----------
In 2000, a non-related individual filed suit against the Company.
Later that year, management negotiated a settlement with this
individual totaling $250,000, and the amount was recorded as a
contingent liability at December 31, 2000. In 2001 the Company
defaulted on the settlement agreement. As a result, in the current
year, the Company recorded the full amount of the alleged damages,
less payments made by the Company to the individual. At December
31, 2001, this liability is recorded at $1,156,282.
In 2001, 1st Miracle Group, Inc. received a legal judgment against
the Company totaling $100,000. Management was able to negotiate a
settlement on this amount, totaling $20,000, and at December 31,
2001, the liability is recorded at the settled amount.
In 2001, AMG Consulting brought legal action against the Company,
seeking damages of $21,012. Management is currently attempting to
negotiate a settlement on this amount. At December 31, 2001, this
contingent liability is recorded at the full $21,012.
e. Employment Agreements
---------------------
In December 2001, the Company entered into employment agreements
with its CEO and CFO. Both agreements cover a period of 24 months,
and compensation totals $250,000 and $100,000 annually,
respectively. In addition, the parties were each to receive
250,000 shares of the Company's common stock, and options to
acquire 750,000 and 500,000 shares at a strike price equal to
market price on date of issuance.
As of December 31, 2001, the shares of common stock had not been
issued. The stock options have been included in the disclosure in
Note 19.
NOTE 13 - PREFERRED STOCK
The Company's preferred stock has the right to quarterly dividends
to be paid at the annual rate of 6%. The quarterly dividend is to
be paid to all shareholders of record, as of the last day of each
quarter until such time as the Company causes such shares to be
converted to common shares and "registered" (free trading) with
the S.E.C. and the appropriate State regulatory agency.
Each preferred share is convertible into one share of the common
stock of the Company, such conversion to occur automatically and
registered concurrently with any public offering of the common
shares of the Company.
29
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Notes to the Consolidated Financial Statements
December 31, 2001, 2000 and 1999
NOTE 14 - STOCK SUBSCRIPTIONS RECEIVABLE
During 1999, the Company issued a total of 27,330 shares of its
outstanding common stock for $443,500 under stock subscription
notes receivable. These notes were non-interest bearing. During
1999, $116,445 of the amount was received. During 2000, the
Company issued additional shares of common stock under promissory
notes totaling $158,001 for 223,308 shares. These notes are also
non-interest bearing. During 2000, an additional $199,000 was
received by the Company pursuant to these subscription notes
receivable. The total amount of stock subscriptions receivable at
December 31, 2000 was $286,056. In 2001, 210,750 shares were
issued for subscriptions receivable of $88,737. The Company
received cash on these amounts totaling $27,455. Total stock
subscriptions receivable at December 31, 2001 was $347,338.
NOTE 15 - SEGMENT INFORMATION
The Company's reportable segments are strategic business units
that offer different products and services. They are managed
separately because each business requires different technology and
marketing strategies.
The Company had three separate reportable segments during the year
ended December 31, 2000, management consulting, website
development and soccer franchises. As discussed in Note 16, the
soccer subsidiaries were discontinued as of December 31, 2000. The
remaining two segments will be the Company's focus in the future.
The accounting policies applied to determine the segment
information are the same as those described in the summary of
significant accounting policies.
Financial information with respect to the reportable segments are
as follows:
2001
--------------------------------------------------------
Management
Consulting Website
Fees Development Total
---------------- --------------- ---------------
Revenues $ 15,125 $ - $ 15,125
Expenses (3,034,428) (99,149) (3,133,577)
Other income (expenses) (492,435) (13,857) (506,292)
---------------- --------------- ---------------
Net loss per segment $ (3,511,738) $ (113,006) $ (3,624,744)
================ =============== ===============
2000
--------------------------------------------------------
Management
Consulting Website
Fees Development Total
---------------- ---------------- ---------------
Revenues $ 611,214 $ 153,600 $ 764,814
Expenses (3,581,346) (822,137) (4,403,483)
Other income (expenses) (2,823,479) (1,466) (2,824,945)
---------------- --------------- ---------------
Net loss per segment $ (5,793,611) $ (670,003) $ (6,463,614)
================ =============== ===============
30
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Notes to the Consolidated Financial Statements
December 31, 2001, 2000 and 1999
NOTE 16 - INVESTMENTS AND INVESTMENT VALUATION
On September 15, 1998, the Company filed with the Securities and
Exchange Commission to become a Business Development Corporation as
defined under the Investment Act of 1940 in order to invest in real
estate and eligible portfolio companies. This resulted in the Company
becoming a specialized type of investment company.
The investment valuation method adopted in 1982 provides for the
Company's Board of Directors to be responsible for the valuation of
the Company's investments (and all other assets). In the development
of the Company's valuation methods, factors that affect the value of
investees' securities, such as significant escrow provisions, trading
volume and significant business changes are taken into account. These
investments are carried at fair value using the following four basic
methods of evaluation:
a. Cost - The cost method is based on the original cost to the
Company, adjusted for amortization of original issue discounts
and accrued interest for certain capitalized expenditures of the
corporation. Such method is to be applied in the early stages of
an investee's development until significant positive or adverse
events subsequent to the date of the original investment require
a change to another method.
b. Private market - The private market method uses actual or
proposed third party transactions in the investee's securities as
a basis for valuation, utilizing actual firm offers as well as
historical transactions, provided that any offer used is
seriously considered and well documented by the investee.
c. Public market - The public market method is the preferred method
of valuation when there is an established public market for the
investee's securities. In determining whether the public market
method is sufficiently established for valuation purposes, the
corporation is directed to examine the trading volume, the number
of shareholders and the number of market makers in the investee's
securities, along with the trend in trading volume as compared to
the Company's proportionate share of the investee's securities.
If the security is restricted, the value is discounted at an
appropriate rate.
d. Appraisal - The appraisal method is used to value an investment
position after analysis of the best available outside information
where there is no established public or private market method
which have restrictions as to their resale as denoted in the
schedule of investments are also considered to be restricted
securities.
All portfolio securities valued by the cost, private market and
appraisal methods are considered to be restricted as to their
disposition. In addition, certain securities valued by the public
market method which have restrictions as to their resale as
denoted in the schedule of investments are also considered to be
restricted securities.
31
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Notes to the Consolidated Financial Statements
December 31, 2001, 2000 and 1999
NOTE 17 - OTHER SIGNIFICANT TRANSACTIONS AND EVENTS
The Company has been advised by the Securities and Exchange
Commission (the "Commission") that the Commission has entered into
a formal investigation of the Company. The Company believes that
the investigation concerns valuation issues, stock issuances,
disclosure requirements and format requirements that are required
by the Commission under the Investment Company Act of 1940 as they
relate to the Company's election to become a Business Development
Corporation. The Company is voluntarily cooperating with the
investigation and certain officers have given their depositions.
Presently, the investigation remains open. The potential liability
or outcome of the investigation cannot currently be determined.
The Company has formed new subsidiary corporations in the State of
Nevada, under the names of: Broadleaf Asset Management, Inc.,
Broadleaf Financial Services, Inc. and Brand Asset Management, Inc.
The Company has also changed the name of Broadleaf Asset Management,
Inc. to Broadleaf Aerospace Systems, Inc.
NOTE 18 - DISCONTINUED OPERATIONS
Effective December 31, 2000, the Company discontinued the operations
of the Bay Area, Orange and Riverside soccer subsidiaries. The
following is a summary of the loss from discontinued operations
resulting from the dissolution of these subsidiaries. The Company has
established a reserve for discontinued operations of $295,892 and
$305,055 at December 31, 2001 and 2000, respectively, which consists
of net liabilities in excess of recoverable assets. No tax benefit has
been attributed to the discontinued operations.
For the Year Ended
December 31,
-------------------------------------------
2001 2000 1999
---------------------------- -------------
REVENUES $ 648 $ 178,540 $ -
------------- ------------- -------------
OPERATING EXPENSES
General and administrative 21,388 2,315,634 -
Bad debt expense - 9,987 -
Depreciation and amortization 9,640 6,683 -
------------- ------------- -------------
Total Operating Expenses 31,028 2,332,304 -
------------- ------------- -------------
LOSS FROM OPERATIONS (30,380) (2,153,764) -
------------- ------------- -------------
OTHER INCOME (EXPENSE)
Interest income 72 1,834 -
Interest expense (34) (784) -
------------- ------------- -------------
Total Other Income (Expense) 38 1,050 -
------------- ------------- -------------
LOSS FROM DISCONTINUED
OPERATIONS $ (30,342) $ (2,152,714) $ -
============= ============= =============
32
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Notes to the Consolidated Financial Statements
December 31, 2001, 2000 and 1999
NOTE 19 - STOCK OPTIONS AND WARRANTS
During the year ended December 31, 2001, the Company granted two of
its officers options to acquire an aggregate of 1,250,000 shares of
the Company's common stock at a strike price equal to the trading
price on the date of issuance.
A summary of the status of options at December 31, 2001, 2000, and
1999 is as follows:
2001 2000 1999
--------------------------- --------------------------- ---------------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
-------------- ----------- ------------ ------------- ------------ -------------
Outstanding, beginning
of year - $ - - $ - - -
Granted 1,250,000 0.02 - - - -
Canceled - - - - - -
Exercised - - - - - -
-------------- ------------ ------------ ------------- ------------ -------------
Outstanding, end of year 1,250,000 $ 0.02 - $ - - $ -
-------------- ----------- ------------ ------------- ------------ -------------
Exercisable, end of year - $ - - $ - - $ -
-------------- ----------- ------------ ------------- ------------ -------------
Weighted average fair value
of options and warrants
granted during the year $ 0.02 $ - $ -
=========== ============= =============
33
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Notes to the Consolidated Financial Statements
December 31, 2001, 2000 and 1999
NOTE 20 - FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share
of the Fund outstanding throughout the periods indicated.
Common Stock
-----------------------------------------------------------------------
Year ended December 31
-----------------------------------------------------------------------
2001 2000 1999 1998 1997
-------------- ----------- ------------ ------------- ------------
Net asset value, beginning
of period $ (2.59) $ 13.93 $ 7.67 $ - $ -
Income from investment
operations:
Net investment income (6.35) (11.93) (2.95) - -
-------------- ----------- ------------ ------------- ------------
Net gains (losses) on
securities (both realized
and unrealized) (0.67) (2.04) (0.61) - -
-------------- ------------ ------------ ------------- ------------
Total from investment
operations (7.02) (13.97) (3.56) - -
-------------- ----------- ------------ ------------- ------------
Other increase (decrease) 2.39 (2.62) 9.82 - -
Less distributions from net
investment income - - - - -
-------------- ----------- ------------ ------------- ------------
Net asset value, end of
period $ (7.22) $ (2.66) $ 13.93 $ - $ -
============== =========== ============ ============= ============
Calculated using post split average shares outstanding.
NOTE 21 - SUBSEQUENT EVENTS
In March 2002 the shareholders of the Company approved changing
the name of the Company to Broadleaf Capital Partners, Inc. and
changing the state of domicile from Colorado to Nevada. In
addition, the shareholders approved a reverse stock split of 100 to
1. The financial statements have been retroactively adjusted for
these events.
34