U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 2003.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to _________
Commission File number 0-26849
BF ACQUISITION GROUP III, INC.
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(Exact name of small business issuer as specified in its charter)
Florida
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(State or other jurisdiction of incorporation or organization)
65-0913585
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(IRS Employer Identification No.)
2501 Turk Boulevard, San Francisco, California 94118
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(Address of principal executive offices)
(415) 831-1974
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(Issuer's telephone number)
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(Former name, former address, and former fiscal year,
if changed since last report)
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: As of June 15, 2004, there
were approximately 825,000 shares of common stock, $0.001 par value, issued and
outstanding.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
BF ACQUISITION GROUP III, INC.
Form 10-QSB Index
October 31, 2003
Page
Part I: Financial Information...............................................2
Item 1. Financial Statements
Balance Sheet as of October 31, 2003 (Unaudited)..........2
Statement of Operations For the Three
Months Ended October 31, 2003 and 2002 and
Six Months Ended October 31, 2003 and 2002
and Period from Inception (April 15, 1999)
through October 31, 2003 (Unaudited).....................3
Statement Of Cash Flows For the Six
Months Ended October 31, 2003 and 2002 and
Period from Inception (April 15, 1999)
through October 31, 2002 (Unaudited).....................4
Notes To Condensed Financial Statements for the
Interim Period Ended October 31, 2003 (Unaudited) ........5
Item 2. Management's Plan of Operation ............................8
Item 3. Controls and Procedures....................................8
Part II: Other Information ...............................................9
Item 1. Legal Proceedings .......................................9
Item 2. Changes in Securities ...................................9
Item 3. Defaults Upon Senior Securities ........................9
Item 4. Submission of Matters to a Vote of Security Holders ....9
Item 5. Other Information ......................................9
Item 6. Exhibits and Reports on Form 8-K ........................10
Signatures..................................................................11
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BF ACQUISITION GROUP III, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
(UNAUDITED)
OCTOBER 31,
2003
-----------
ASSETS
Current assets:
Cash and cash equivalents $ --
--------
Total assets $ --
========
LIABILITIES AND STOCKHOLDERS'DEFICIT
Current liabilities
Accrued expenses $ 8,310
Loans from shareholders 300
--------
Total current liabilities 8,610
Stockholders' deficit:
Preferred stock, no par value; 5,000,000 shares
authorized; none issued or outstanding --
Common stock $0.001 par value; 50,000,000 shares
authorized, 825,000 shares issued and outstanding 825
Additional paid-in capital 5,116
Deficit accumulated during the development stage (14,551)
--------
Total stockholders' deficit (8,610)
--------
Total liabilities and stockholders' deficit $ --
========
The accompanying notes are an integral part of these financial statements.
2
BF ACQUISITION GROUP III, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(UNAUDITED)
PERIOD FROM
INCEPTION
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS (APRIL 15, 1999)
ENDED ENDED ENDED ENDED THROUGH
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2003 2002 2003 2002 2003
--------- --------- --------- --------- ---------
Revenues $ -- $ -- $ -- $ -- $ --
General and administrative expenses 550 550 1,100 1,100 14,551
--------- --------- --------- --------- ---------
Loss before income tax provision (550) (550) (1,100) (1,100) (14,551)
Provision for income taxes -- -- -- -- --
--------- --------- --------- --------- ---------
Net loss $ (550) $ (550) $ (1,100) $ (1,100) $ (14,551)
========= ========= ========= ========= =========
Basic and diluted loss per common share:
Basic and diluted loss per common share $ (0.0007) $ (0.0007) $ (0.0013) $ (0.0013) $ (0.0180)
========= ========= ========= ========= =========
Weighted average number of
common shares outstanding 825,000 825,000 825,000 825,000 810,063
========= ========= ========= ========= =========
The accompanying notes are an integral part of these financial statements.
3
BF ACQUISITION GROUP III, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
PERIOD FROM
FOR THE FOR THE INCEPTION
SIX MONTHS SIX MONTHS (APRIL 15, 1999)
ENDED ENDED THROUGH
OCTOBER 31, 2003 OCTOBER 31, 2002 OCTOBER 31, 2003
---------------- ---------------- ----------------
Cash flows from operating activities:
Net loss $(1,100) $(1,100) $(14,551)
Common stock issued for services
Changes in liabilities: 441
Increase in accrued expenses 1,100 1,100 8,310
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Net cash used in operating activities -- -- (5,800)
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Cash flows from financing activities:
Loan received from related party -- -- 300
Sale of common stock -- -- 5,500
------- ------- --------
Net cash provided by financing activities -- -- 5,800
------- ------- --------
Net decrease (increase) in cash and cash equivalents -- -- --
Cash and cash equivalents at beginning of period -- -- --
------- ------- --------
Cash and cash equivalents at end of period $ -- $ -- $ --
======= ======= ========
The accompanying notes are an integral part of these financial statements.
4
BF ACQUISITION GROUP III, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION AND BASIS OF PRESENTATION:
BF Acquisition Group III, Inc., (the "Company"), a development stage
company, was organized in Florida on April 15, 1999 as a "shell" company
which plans to look for suitable business partners or acquisition
candidates to merge with or acquire. Operations since incorporation have
consisted primarily of obtaining the initial capital contribution by the
founding shareholders and coordination of activities regarding the SEC
registration of the Company.
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.
The information for the three and six months ended October 31, 2003 has
not been audited by independent certified public accountants, but
includes all adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the period.
Certain information and footnote disclosure normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to the requirements of
the Securities and Exchange Commission, although the Company believes
that the disclosures included in these interim financial statements are
adequate to make the information not misleading.
It is suggested that these consolidated financial statements should be
read in conjunction with the consolidated financial statements and notes
thereto included in the Company's Annual Report on Form 10-SB (see File
Number 000-26849) on file with the Securities and Exchange Commission.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
INCOME TAXES
The Company accounts for income taxes in accordance with the Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes",
which requires the recognition of deferred tax liabilities and assets at
currently enacted tax rates for the expected future tax consequences of
events that have been included in the financial statements or tax
returns. A valuation allowance is recognized to reduce the net deferred
tax asset to an amount that is more likely than not to be realized. The
tax provision shown on the accompanying statement of operations is zero
since the deferred tax asset generated from the net operating loss is
offset in its entirety by valuation allowances.
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BF ACQUISITION GROUP III, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
CASH AND CASH EQUIVALENTS
Cash and cash equivalents, if any, include all highly liquid debt
instruments with an original maturity date of three months or less at the
date of purchase.
EARNINGS PER COMMON SHARE
The Company follows the provisions of SFAS No. 128, "Earnings Per Share",
which requires companies with complex capital structures or common stock
equivalents to present both basic and diluted earnings per share ("EPS")
on the face of the income statement. Basic EPS is calculated as income
available to common stockholders divided by the weighted average number
of common shares outstanding during the period. Diluted EPS is calculated
using the "if converted" method for convertible securities and the
treasury stock method for options and warrants as previously prescribed
by Accounting Principles Board Opinion No. 15, "Earnings Per Share".
STATEMENT OF COMPREHENSIVE INCOME
A statement of comprehensive income has not been included, per SFAS 130,
"Reporting Comprehensive Income", as the Company has no items of other
comprehensive income.
SEGMENT INFORMATION
The Company adopted SFAS No. 131, "Disclosure about Segments of an
Enterprise and Related Information", effective April 30, 1999. SFAS No.
131 establishes standards for the way that public companies report
selected information about operating segments in annual and interim
financial reports to shareholders. It also establishes standards for
related disclosures about an enterprise's business segments, products,
services, geographic areas and major customers. The Company operates its
business as a single segment. As a result, no additional disclosure is
required.
RECENT ACCOUNTING STANDARDS
In June 1999, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities - Deferral of FASB Statement No. 133". SFAS No. 137 defers for
one year the effective date of SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities". SFAS No. 133 will now apply to all
fiscal quarters of all fiscal years beginning after June 15, 2000. SFAS
No. 133 will require the Company to recognize all derivatives on the
balance sheet as either assets or liabilities measured at fair value.
Derivatives that are not hedges must be adjusted to fair value through
income. The Company adopted SFAS No. 133 effective for the year ending
April 30, 2002.
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BF ACQUISITION GROUP III, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
3. LOSS PER COMMON SHARE:
Net loss per common share outstanding, as shown on the statement of
operations, is determined by the weighted average number of shares of
common stock outstanding during the period. Diluted loss per common share
calculations are determined by dividing loss available to common
shareholders by the weighted average number of shares of common stock and
dilutive common stock equivalents outstanding during the period.
4. CAPITAL STOCK:
COMMON STOCK
The holders of the common stock are entitled to one vote per share and
have non-cumulative voting rights. The holders are also entitled to
receive dividends when, as, and if declared by the Board of Directors.
Additionally, the holders of the common stock do not have any preemptive
right to subscribe for, or purchase, any shares of any class of stock.
PREFERRED STOCK
The Board of Directors of the Company is authorized to provide for the
issuance of the preferred stock in classes or series and, by filing the
appropriate articles of amendment with the Secretary of State of Florida,
is authorized to establish the number of shares to be included in each
class or series and the preferences, limitations and relative rights of
each class or series, which may include a conversion feature into common
stock. This type of preferred stock is commonly referred to as "blank
check preferred stock". As of February 28, 2004, no shares of preferred
stock have been issued and no preferences, limitations and relative
rights have been assigned.
5. GOIN CONCERN
As reflected in the accompanying financial statements, the Company's
cumulative losses, its working capital deficiency, and stockholders'
deficiency raise substantial doubt about its ability to continue as a
going concern. The ability of the Company to continue as a going concern
is dependent on the Company's ability to raise additional capital and
implement its business plan. The financial statements do not include any
adjustments that might be necessary if the Company is unable to continue
as a going concern.
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ITEM 2. MANAGEMENT'S PLAN OF OPERATION.
OVERVIEW
The following discussion "Management's Plan of Operation" contains
forward-looking statements. The words "anticipate," "believe," "expect," "plan,"
"intend," "estimate," "project," "will," "could," "may" and similar expressions
are intended to identify forward-looking statements. Such statements reflect our
current views with respect to future events and financial performance and
involve risks and uncertainties. Should one or more risks or uncertainties
occur, or should underlying assumptions prove incorrect, actual results may vary
materially and adversely from those anticipated, believed, expected, planned,
intended, estimated, projected or otherwise indicated. We caution you not to
place undue reliance on these forward-looking statements, which we have made as
of the date of this Quarterly Report on Form 10-QSB.
The following is qualified by reference to, and should be read in
conjunction with our financial statements ("FINANCIAL STATEMENTS"), and the
notes thereto, included elsewhere in this Form 10-QSB, as well as the discussion
hereunder "Management's Plan of Operation".
PLAN OF OPERATION
During the period covered by this report, BF Acquisition Group III,
Inc. (the "COMPANY") conducted no business operations and generated no revenue.
Our Company was initially organized as a "shell" company, with plans to
seek business partners or acquisition candidates; however, due to capital
constraints, we were unable to continue with our business plan. In March 2001,
we ultimately ceased our business activities and became dormant, whereby we
incurred only minimal administrative expenses. We are currently initiating
activities to re-establish our business plan and re-enter the development stage.
This has not yet occurred to date, and management is devoting most of its
efforts to general business planning, raising capital, and developing business
opportunities.
As described above, we became dormant for a period of time due to the
lack of capital. We incurred a loss from operations, and presently do not have
any revenues to cover our incurred expenses. Our management recognizes that we
must generate additional resources to enable us to pay our obligations as they
come due, and that we must ultimately implement our business plan and achieve
profitable operations. We cannot assure you that we will be successful in any of
these activities. Should any of these events not occur, our financial condition
will be materially adversely affected.
Until we obtain business partners or acquisition candidates, our
Company does not expect to meet its current capital requirements for the next
twelve months. Additionally, we cannot assure you that if we obtain business
partners or acquisition candidates that we will meet our current capital
requirements for the next twelve months. Our auditors have included going
concern considerations in the Notes to our Financial Statements.
ITEM 3. CONTROLS AND PROCEDURES.
As of the date this report is filed, an evaluation was performed under
the supervision and with the participation of the Company's principal executive
8
officer and financial officer of the effectiveness of the design and operation
of the Company's disclosure controls and procedures (as such term is defined in
Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the
period covered by this report. During that period, our Company experienced
significant capital constraints, and we ultimately ceased our business
activities and became dormant. During the period covered by this report, our
Company was unable to comply with its Exchange Act reporting requirements
because no accounting work was completed, no financial statements were prepared,
and no audits were obtained. The evaluation revealed to the Company's principal
executive officer and financial officer that, as a result of those
circumstances, the design and operation of the Company's disclosure controls and
procedures were not effective as of the end of the period covered by this
report, and that the design and operation of the Company's disclosure controls
and procedures remain ineffective as of the date of this report.
Until we obtain business partners or acquisition candidates, our
Company does not expect to be able to make significant changes in the Company's
internal controls and in other factors that could significantly affect internal
controls subsequent to the date of the above-described evaluation period.
However, once we obtain business partners or acquisition candidates, our Company
expects to adopt an independent audit committee, commit funds for legal and
accounting work and the preparation of financial statements and audits, and
bring the Company out of its dormant period, all of which should enable our
Company's principal executive officers and financial officers to maintain our
Company as current pursuant to its Exchange Act reporting obligations and
provide our Company with an effective design and operation of disclosure
controls and procedures. We cannot assure you, however, that our obtaining
business partners or acquisition candidates will guarantee that we will be able
to maintain our Company as current pursuant to its Exchange Act reporting
obligations and provide our Company with an effective design and operation of
disclosure controls and procedures.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not Applicable
ITEM 2. CHANGE IN SECURITIES
Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable
ITEM 5. OTHER INFORMATION
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit No. Description of Exhibit
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(31)
31.1 Certification of the President of BF Acquisition Group III, Inc.
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of the Treasurer of BF Acquisition Group III, Inc.
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(32)
32.1 Certification of the President of BF Acquisition Group III, Inc.
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification of the Treasurer of BF Acquisition Group III, Inc.
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K
Not Applicable
10
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.
BF ACQUISITION GROUP III, INC.
Registrant
By: /s/ William Colucci
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William Colucci, President
Dated: June 16, 2004
By: /s/ William Colucci
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William Colucci, President
Dated: June 16, 2004
By: /s/ William Colucci
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William Colucci, Treasurer
Dated: June 16, 2004
11