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 March 31, 2005.
[ ] 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.)
4 Mill Park Ct., Newark, Delaware 19713
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(Address of principal executive offices)
(302) 366-8992
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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 May
23, 2005, there were approximately 975,000 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
March 31, 2005
Page
Part I: Financial Information.............................................1
Item 1. Financial Statements...........................................1
Consolidated Balance Sheets (Unaudited) .......................2
Consolidated Statements of Operations (Unaudited)..............3
Consolidated Statement Of Stockholders' Deficit (Unaudited)....4
Consolidated Statement Of Cash Flows (Unaudited)...............5
Notes To Financial Statements (Unaudited).....................6-8
Item 2. Management's Plan of Operation.................................9
Item 3. Controls and Procedures.......................................13
Part II: Other Information.............................................14
Item 1. Legal Proceedings............................................14
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds..14
Item 3. Defaults Upon Senior Securities .............................14
Item 4. Submission of Matters to a Vote of Security Holders..........14
Item 5. Other Information............................................14
Item 6. Exhibits.....................................................14
Signatures...............................................................15
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
BF ACQUISITION GROUP III, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2005 AND SEPTEMBER 30, 2004
(Unaudited) (Audited)
MARCH 31, SEPTEMBER 30,
2005 2004
------------ ------------
ASSETS
------
Current Assets:
Cash and cash equivalents $ 28 $ 106
Accounts receivable - -
Due from officer 1,288 1,288
----------- -----------
Total Assets $ 1,316 $ 1,394
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities
Accounts payable $ 24,537 $ 4,331
Due to affiliates 71,431 69,574
Loans from shareholders - -
----------- -----------
Total Current Liabilities 95,968 73,905
----------- -----------
Long-Term Debt
Long-term debt
Loans from shareholders ----------- -----------
- -
----------- -----------
Stockholders' Equity
Convertible preferred stock, Series A, $0.50 par value;
3,000,000 shares authorized, issued and outstanding 1,500,000 1,500,000
Discount of convertible preferred stock (1,500,000) (1,500,000)
Common stock, $.001 par value; 20,000,000 shares authorized,
975,000 shares issued and outstanding 975 975
Additional paid-in capital 219,462 219,462
Accumulated deficit (315,089) (292,948)
----------- -----------
(94,652) (72,511)
----------- -----------
Total Liabilities and Stockholders' Equity $ 1,316 $ 1,394
=========== ===========
2
BF ACQUISITION GROUP III, INC. & SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2005 AND 2004
(UNAUDITED)
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
March 31, March 31, March 31, March 31,
2005 2004 2005 2004
----------- ----------- ----------- -----------
Net sales $ 14,829 $ 14,445 $ 67,517 $ 129,476
Cost of sales 12,622 22,591 48,506 95,446
----------- ----------- ----------- -----------
Gross profit 2,207 (8,146) 19,011 34,030
Selling, general and administrative
expenses 8,696 3,160 41,158 56,941
----------- ----------- ----------- -----------
Net loss from operations (6,489) (11,306) (22,147) (22,911)
=========== =========== =========== ===========
Other income - 1 6 1
=========== =========== =========== ===========
NET LOSS $ (6,489) $ (11,305) $ (22,141) $ (22,910)
=========== =========== =========== ===========
BASIC AND DILUTED WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING 975,000 1,019,000 975,000 1,019,000
=========== =========== =========== ===========
BASIC AND DILUTED NET LOSS PER
COMMON SHARE $ (0.01) $ (0.01) $ (0.02) $ (0.02)
=========== =========== =========== ===========
3
BF ACQUISITION GROUP III, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
FOR THE THREE MONTHS ENDED DECEMBER 31, 2004
(UNAUDITED)
Discount on Additional
Preferred Preferred Common Paid-In Accumulated
Stock Stock Stock Capital Deficit Total
---------- ----------- -------- ---------- ----------- -----------
Balance at September 30, 2004 $1,500,000 $(1,500,000) $ 975 $ 219,462 $ (292,948) $ (72,511)
Net loss for the six months
ended March 31, 2005 (22,141) (22,141)
---------- ----------- -------- ---------- ----------- -----------
Balance at March 31, 2005 $1,500,000 $(1,500,000) $ 975 $ 219,462 $ (315,089) $ (94,652)
========== =========== ======== ========== =========== ===========
4
BF ACQUISITION GROUP III, INC. AND SUBSUDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED MARCH 31, 2005 AND 2004
(UNAUDITED)
Six Months Six Months
Ended Ended
March 31, March 31,
2005 2004
-------- --------
Cash Flows From Operating Activities
Net Loss $(22,141) $(22,910)
Adjustments to reconcile net loss to net cash flows
used by operating activities
Stock issued in exchange for services - -
Net changes in:
Accounts receivable - 7,900
Accounts payable and accrued expenses 20,206 (194)
-------- --------
Net cash used by operating activities (1,935) (15,204)
-------- --------
Cash Flows From Investing Activities
Purchase of property and equipment - -
Purchase of investments held in trust - -
Decrease (Increase) in notes receivable - -
-------- --------
Net cash used by investing activities - -
-------- --------
Cash Flows From Financing Activities
Net increase (decrease) in amount due to affiliate 1,857 (171)
Discrepancy - 14,024
Loans from related parties - -
-------- --------
Net cash provided by financing activities 1,857 13,853
-------- --------
Net Increase in Cash (78) (1,351)
Cash, Beginning of Period 106 4,111
-------- --------
Cash, End of Period $ 28 $ 2,760
======== ========
5
BF ACQUISITION GROUP III, INC. & SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
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 from
incorporation until August 31, 2004 have consisted primarily of
obtaining the initial capital contribution by the founding
shareholders and coordination of activities regarding the SEC
registration of the Company.
On August 31, 2004, the Company exchanged 3,000,000 shares of Series
A Preferred Stock for 425,000 common shares of FundraisingDirect.com,
Inc. ("FDR") of a total of 468,030 common shares. FDR was
incorporated in 1999 under the laws of the State of Delaware. FDR is
engaged in the sales and distribution of fundraising products to
customers which are principally nonprofit organizations.
Basis of Presentations
The Under accounting principles generally accepted in the United
States, the share exchange is considered to be a capital transaction
in substance, rather than a business combination. That is, the share
exchange is equivalent to the issuance of stock by FDR for the net
monetary assets of the Company, accompanied by a recapitalization, and
is accounted for as a change in capital structure. Accordingly, the
accounting for the share exchange will be identical to that resulting
from a reverse acquisition, except no goodwill will be recorded.
Under reverse takeover accounting, the post reverse acquisition
comparative historical financial statements of the legal acquirer, the
Company, are those of the legal acquiree, FDR, which are considered
to be the accounting acquirer.
The Company has elected to change its fiscal year end to September 30.
The accompanying interim period financial statements of BF Acquisition
Group III, Inc., and Subsidiary are unaudited, pursuant to certain rules
and regulations of the Securities and Exchange Commission, and include,
in the opinion of management, all adjustments (consisting of only normal
recurring accruals) necessary for a fair statement of the results for the
periods indicated, which, however, are not necessarily indicative of
results that may be expected for the full year. Certain information and
footnote disclosures normally included in financial statements prepared
in accordance with accounting principles generally accepted in the United
States have been condensed or omitted pursuant to such rules and
regulations. The financial statements should be read in conjunction with
the financial statements and the notes thereto included in the Company's
September 30, 2004 Form 10-K and other information included in the
Company's Forms 8-Ks and amendments thereto as filed with the Securities
and Exchange Commission.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts
of the Company and 92% owned subsidiary FRD. The Company has recorded the
minority interest loss amounting to $7,664 for the nine months ended
September 30, 2004, and $928 for the three months ended December 31,
2004.
6
BF ACQUISITION GROUP III, INC. & SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
Use of Estimates
The preparation of financial statements in conformity with U.S. 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.
Reclassifications
Certain reclassifications have been made to the prior period financial
statements to conform to the presentation in the current period's
financial statements.
Concentration of Credit Risk
The Companies performs ongoing credit evaluations of its customers'
financial condition and, generally, requires no collateral from its
customers.
Fair Value of Financial Instruments
The Company's financial instruments consist of cash, receivables and
payables. The carrying values of cash, receivables and payables
approximate fair value because of their short maturities.
Revenue Recognition
The Company recognizes net sales and the related cost of sales at the
time the products are shipped to customers.
Certain revenue is recorded on a net basis since the Company performs as
an agent without assuming the risks and rewards of ownership of the goods
and does not take title to the products.
NOTE 2 - REALIZATION OF ASSETS
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has incurred losses
from activities during the development stage. This condition raises
substantial doubt about the Company's ability to continue as a going
concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
7
BF ACQUISITION GROUP III, INC. & SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 3 - RELATED PARTY TRANSACTIONS
The Company purchases products from a company related by common
ownership. During the six months ended March 31, 2005 and 2004, total
purchases from related entity were $29,454 and $67,317, respectively.
The Company shares certain operating expenses with this related
entity. The related entity pays these expenses and allocates to the
Company its proportionate share of the expenses. During the six months
ended March 31, 2005 and 2004, these expenses amounted to
approximately $16,000 and $53,000, respectively.
As of March 31, 2005 and 2004, the payable to this entity amounted to
$61,740 and $61,574, respectively. The payable is non-interest bearing
with no specified repayment terms.
NOTE 4 - RETROACTIVE RESTATEMENT FOR RECAPITALIZATION UPON REVERSE ACQUISITION
The stockholders' equity at March 31, 2004 has been retroactively
restated for the equivalent number of shares received in the reverse
acquisition at August 31, 2004 (Note 1) after giving effect to the
difference in par value with the offset to additional paid-in-capital.
8
Item 2. Management's Discussion and Analysis or Plan of Operation.
The following discussion "Management's Discussion and Analysis or
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 consolidated financial statements ("Financial
Statements"), and the notes thereto, included elsewhere in this Form
10-QSB, as well as the discussion hereunder "Management's Discussion
and Analysis or Plan of Operation."
Background
BF Acquisition Group, III, Inc. ("BF Acquisition Group") was
incorporated under the laws of the State of Florida on April 15, 1999
as a corporate vehicle created to seek to effect a merger, exchange of
capital stock, asset acquisition or other similar business combination
with an operating business that desired to employ BF Acquisition Group
to become a reporting corporation under the Securities Exchange Act of
1934. In March 2001, BF Acquisition Group ultimately ceased its
business activities and became dormant until July 2004.
On August 31, 2004, BF Acquisition Group completed the
acquisition of approximately 92% of all of the issued and outstanding
shares of capital stock of FundraisingDirect.com, Inc., a Delaware
corporation ("FundraisingDirect") pursuant to a share exchange
agreement between BF Acquisition Group; FundraisingDirect; and Mr.
Justin P. DiNorscia and Mrs. Diane DiNorscia, who were the owners of
approximately 92% of all of the issued and outstanding shares of
capital stock of FundraisingDirect, making FundraisingDirect BF
Acquisition Group's 92% majority owned subsidiary. Additionally,
pursuant to that share exchange agreement, BF Acquisition Group
elected a majority of new members to its board of directors and
appointed new management.
For accounting purposes, this acquisition transaction was
accounted for as a reverse-acquisition, whereby FundraisingDirect was
deemed to have purchased BF Acquisition Group. As a result, the
historical financial statements of FundraisingDirect became the
historical financial statements of BF Acquisition Group, and BF
Acquisition Group's April 30 fiscal year end was changed to
FundraisingDirect's December 31 fiscal year. Subsequently, on November
1, 2004, we changed our fiscal year end from December 31 to September
30. BF Acquisition Group operates as a holding company on behalf of
its majority owned subsidiary FundraisingDirect.
9
On February 8, 2005, BF Acquisition Group; its majority-owned
subsidiary FundraisingDirect; Imprints Plus, Inc., ("Imprints Plus");
IPI Fundraising, Inc. ("IPI Fundraising"), a newly formed Delaware
corporation formed by Justin P. DiNorscia (the controlling
shareholder, principal officer and director of each of BF Acquisition
Group, FundraisingDirect and Imprints Plus) solely to effect the
merger transaction described below; and certain key stockholders of BF
Acquisition Group, FundraisingDirect, and Imprints Plus, all entered
into a definitive merger agreement (the "Merger Agreement").
Pursuant to the terms of the Merger Agreement, at the effective
time of the merger, the separate existence of each of BF Acquisition
Group, FundraisingDirect and Imprints Plus shall cease and each of
these corporations shall be merged with and into IPI Fundraising,
which shall be the surviving corporation. Immediately after the
effective time, IPI Fundraising's capital structure will consist of
10,064,628 shares of IPI Fundraising common stock, par value $.001 and
3,000,000 shares of IPI Fundraising series A preferred stock, par
value $.50.
Immediately after the effective time of the merger, (i) BF
Acquisition Group stockholders will own approximately 9.69% of IPI
Fundraising's outstanding common stock and 100% of IPI Fundraising's
outstanding series A preferred stock; (ii) Imprints Plus stockholders
will own approximately 50.64% of IPI Fundraising's outstanding common
stock; and (iii) the stockholders who own all of the outstanding
securities of FundraisingDirect not owned by BF Acquisition Group III,
will own approximately 39.67% of IPI Fundraising's outstanding common
stock (all of the outstanding securities of FundraisingDirect owned by
BF Acquisition Group III will be cancelled at the effective time of
the merger). Also, at the effective time of the merger, all vested and
unvested outstanding options to purchase Imprints Plus common stock
issued under Imprints Plus' 2004 Stock Option Plan or otherwise that
by their terms survive the closing, will be assumed by IPI
Fundraising.
IPI Fundraising will register the IPI Fundraising common stock
and preferred stock issued pursuant to the Merger Agreement under the
Securities Act of 1933 pursuant to a registration statement on Form S-
4 filed with the Securities and Exchange Commission. After the
effective time of the merger, the directors and officers of IPI
Fundraising shall consist of the following persons: Justin P.
DiNorscia, Director, President, Chief Executive Officer, Secretary;
Dan Caputo, Jr., Interim Chief Financial Officer; Diane DiNorscia,
V.P. Human Resources and Administration; Thomas P. Hynson, National
Sales Director; Giacomo Bonvetti, Operations Manager; Bradley S.
Cantwell, Director; Joseph T. Drennan, Director.
The closing of the merger remains subject to numerous conditions
contained in the Merger Agreement. Assuming the conditions contained
in the Merger Agreement are satisfied or waived, the closing of the
merger is scheduled to occur 21 days after the effective date of the
registration statement on Form S-4 filed with the Securities and
Exchange Commission or at such other time as the parties may agree.
Additional information concerning the merger is contained in IPI
Fundraising's amended registration statement on Form S-4 filed with
the Securities and Exchange Commission on April 26, 2005. You can go
to www.sec.gov. for more information.
10
BF Acquisition Group failed to file in a timely manner its
required reports with the Securities and Exchange Commission ("SEC")
on Form 10-QSB for the quarterly periods ended July 31, 2001, October
31, 2001, January 31, 2002, July 31, 2002, October 31, 2002, January
31, 2003, July 31, 2003, October 31, 2003, January 31, 2004, December
31, 2004 and on Form 10-KSB for the annual reports the years ended
April 30, 2001, 2002 and 2003. No provision has been recorded in the
accompanying financial statements for the cost of actions, if any,
that the SEC may take against BF Acquisition Group for its non-
compliance during this period.
Overview
FundraisingDirect has a history of net losses and it may not be
profitable in the future. Net income for the six months ended March
31, 2005 was $(22,141) compared to $(22,910) for the six months ended
March 31, 2004. FundraisingDirect cannot assure you that they will not
continue to incur net losses for the foreseeable future, which could
cause the value of our stock to decline and adversely affect our
ability to finance our business in the future.
FundraisingDirect's long-term viability as a going concern is
dependent on certain key factors, such as, its ability to continue to
obtain financing from its existing affiliate stockholders or other
sources of outside financing to support its near term operations; and
its ability to increase profitability and sustain a cash flow level
that will ensure support for continuing operations.
Significant Accounting Policies
BF Acquisition Group's financial statements have been prepared in
conformity with U.S. generally accepted accounting principles. As a
result, some accounting policies have a significant impact on amounts
reported in these financial statements. A summary of those significant
accounting policies can be found in the notes to the Financial
Statements.
Transition Report For The Transition Period From March 31, 2004 To
September 30, 2004
On November 1, 2004, BF Acquisition Group changed its year-end
from December 31 to September 30. BF Acquisition Group's Form 10-KSB
filed with the SEC on January 14, 2005 covered the resulting
transition period between the closing date of its most recent fiscal
year and the opening date of its new fiscal year.
Results Of Operations
Six months ended March 31, 2005 compared with six months ended March
31, 2004.
Net sales for FundraisingDirect were $67,517 for the six months
ended March 31, 2005, compared to $129,476 for the six months ended
March 31, 2004, a decrease in the amount of $61,959 or 47.85%. The
decrease in sales is attributed to a lower rate of participation among
existing customers, who, once they initially become customers of
FundraisingDirect, typically begin dealing with its sister
corporation's (Imprints Plus, Inc.) customer service representatives,
and those subsequent sales are then booked as Imprint's Plus sales,
not FundraisingDirect sales. Additionally, over the past two years,
FundraisingDirect has effectively ceased marketing itself, other than
with respect to relatively low cost and low return Internet marketing
techniques.
11
Gross profit for FundraisingDirect as a percentage of net sales
was 28.15% for the six months ended March 31, 2005, compared to 26.28%
for the six months ended March 31, 2004, a increase of 7.11%. This
increase is a result of a slight change in the Company's sales mix to
a product line with a greater gross profit percentage.
Selling, general and administrative expenses for
FundraisingDirect, were $41,158 for the six months ended March 31,
2005, compared to $56,941 for the six months ended March 31, 2004, a
decrease of $15,783. The decrease is mainly due to a reduction of
allocated expenses from Imprints Plus Inc.
Net loss for FundraisingDirect was $22,141for the six months
ended March 31, 2005, compared to $22,910 for the six months ended
March 31, 2004, a decrease in net loss of $769. The decrease was
attributable to a reduction of allocated expenses from Imprints Plus
Inc.
Three months ended March 31, 2005 compared with three months
ended March 31, 2004.
Net sales for FundraisingDirect were $14,829 for the three
months ended March 31, 2005, compared to $14,445 for the three
months
ended March 31, 2004, an increase in the amount of $384 or
approximately 2.6%.
Gross profit for FundraisingDirect as a percentage of net
sales was 14.88% for the three months ended March 31, 2005,
compared to 56.40% for the three months ended March 31, 2004, a
decrease of 379.04%.
Selling, general and administrative expenses for
FundraisingDirect, were $8,696 for the three months ended
March 31, 2005, compared to $3,160 for the three months
ended March 31, 2004, an increase of $5,536. The increase is
mainly due to increased legal and accounting expenses due to
the merger transaction described herein.
Net loss for FundraisingDirect was $6,489 for the three
months ended March 31, 2005, compared to $11,305 for the three
months ended March 31, 2004, a decrease in net loss of $4,816.
Liquidity And Capital Resources
Cash was $28 at March 31, 2005 as compared to $2,759 at March 31,
2004; and working capital deficit was $94,652 at March 31, 2005 as
compared to $72,511 at March 31, 2004. The increase in the working
capital deficit is primarily the result of recurring losses.
Cash used by FundraisingDirect for operating activities during
the six months ended March 31, 2005 was $(1,935), which included
$20,206 provided from accounts payable and accrued expenses.
FundraisingDirect's greatest source of cash during this period was
$20,206, which was derived from accounts payable and accrued expenses.
To continue with their business operations, FundraisingDirect
will require additional short-term working capital because they have
not generated sufficient cash from operations to fund their operating
activities through the end of fiscal 2005. As of March 31, 2005,
FundraisingDirect had minimal cash that could be used in connection
with funding its operations.
FundraisingDirect relies upon cash flow from operations and
capital provided by its principal shareholders to fund working capital
and capital expenditures; and FundraisingDirect expects to meet its
cash requirements during the next 12 months. A decrease in sales
revenue or the refusal of its principal shareholders to continue to
provide it with capital could negatively impact its short and long-
term liquidity. Various economic conditions, the significant decrease
in its marketing spending, the loss of customers or lower rate of
participation among existing customers could result in a decrease in
sales revenue. If other additional capital is required to fund
FundraisingDirect's current operations, no assurance can be given that
such capital will be available on acceptable terms, if at all. In such
an event, this may have a materially adverse effect on
FundraisingDirect's current operations and financial condition. If the
need arises, additional funding would likely be provided through the
use of various types of short term funding, or loans from banks or
financial institutions.
12
Significant Trends, Developments And Uncertainties
Over the years, FundraisingDirect has seen continued growth in
all segments of its industry, but has experienced a lower rate of
participation among existing customers, because customers prefer the
personalized customer service that Imprints Plus' customer service
personnel offers. In most cases, our customer's participants are
volunteers, and as such, seek efficient solutions that can decrease
demand on their time. Imprints Plus' customer efficiency can provide
efficient solutions that FundraisingDirect cannot. As a result, this
migration trend will continue, which is detrimental to
FundraisingDirect. Also, as a result of this trend, management has
determined to cease expending its limited capital for marketing
purposes, other than with respect to relatively low cost and low
return Internet marketing techniques.
Inflation And Seasonality
FundraisingDirect's business is seasonal, with sales higher
during the second and fourth quarters and slightly lower in the first
and third quarters of each calendar year. This occurs because its
biggest revenue source is scholastic sports teams, whose seasons start
when schools start in the third calendar quarter, which coincides with
beginning fall sports programs, and in the first calendar quarter,
which coincides with the commencement of spring and summer sports
programs. FundraisingDirect expects this seasonal business cycle to
gradually flatten out as it acquires more significant non-sports
oriented national customers, such as the Future Farmers of America and
the 4-H Clubs.
Description Of Property
FundraisingDirect shares approximately 16,600 square feet of
office and warehouse space for its operations in Newark, Delaware.
FundraisingDirect believes its facilities are adequate for its
reasonably foreseeable future needs. This office space is leased at
fair market value rates from related parties.
Item 3. Controls and Procedures.
As of the end of the period covered by this report, an evaluation
was performed under the supervision and with the participation of the
Company's principal executive officers and financial officers 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. The evaluation revealed to the Company's
principal executive officers and financial officers that the design
and operation of the Company's disclosure controls and procedures were
effective as of the end of the period covered by this report.
There have been no 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.
13
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Not Applicable
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
On February 8, 2005 (i) all (100%) of the holders of the
outstanding shares of BF Acquisition Group series A preferred stock;
and (ii) holders of 675,000 (69.23%) of the outstanding shares of BF
Acquisition Group common stock executed written consents voting their
shares in favor of the Merger Agreement and the merger.
Item 5. Other Information
Not Applicable
Item 6. Exhibits
Exhibit No. Description of Exhibit Sequential Page No.
(2)
2.1 Agreement and Plan of Merger dated February 8, 2005.
(Incorporated by reference to Exhibit 2.1 of registrant's
Current Report on Form 8-K filed with the Commission on
February 11, 2005).
(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.
14
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/ Justin P. DiNorscia
--------------------------------
Justin P. DiNorscia, President
Dated: May 23, 2005
By:/s/ Justin P. DiNorscia
--------------------------------
Justin P. DiNorscia, President,
Treasurer
Dated: May 23, 2005
15