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 June 30, 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 August 15, 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
June 30, 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
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BF ACQUISITION GROUP III, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2005 AND SEPTEMBER 30, 2004
June 30, September 30,
2005 2004
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(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 14 $ 106
Due from officer 1,288 1,288
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TOTAL ASSETS $ 1,302 $ 1,394
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LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable $ 26,726 $ 4,331
Due to affiliates 71,032 69,574
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TOTAL CURRENT LIABILITIES 97,758 73,905
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STOCKHOLDERS' DEFICIT
Convertible preferred stock,
Series A, $0.50 par value;
3,000,000 shares authorized,
issued and outstanding 1,500,000 1,500,000
Discount on 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 (316,893) (292,948)
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TOTAL STOCKHOLDERS' DEFICIT (96,456) (72,511)
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TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIT $ 1,302 $ 1,394
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The accompanying notes are an integral part of these
consolidated financial statements.
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BF ACQUISITION GROUP III, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED JUNE 30, 2005 AND 2004
(UNAUDITED)
Three Months Ended Nine Months Ended
June 30, June 30,
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2005 2004 2005 2004
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NET SALES $ - $ 1,826 $ 67,517 $ 131,302
COST OF SALES - 1,931 48,506 83,353
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GROSS PROFIT (LOSS) - 105 19,011 47,949
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 1,804 85,620 42,962 142,561
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NET LOSS FROM OPERATIONS (1,804) (85,725) (23,951) (94,612)
OTHER INCOME - - 6 1
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NET LOSS $( 1,804) $( 85,725) $( 23,945) $( 94,611)
========= ========= ========== =========
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 $ - $ (0.08) $ (0.02) $ (0.09)
========= ========= ========== =========
The accompanying notes are an integral part of these
consolidated financial statements.
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BF ACQUISITION GROUP III, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR THE NINE MONTHS ENDED JUNE 30, 2005
(UNAUDITED)
Discount on Additional
Preferred Preferred Common Paid-in Accumulated
Stock Stock Stock Capital Deficit Total
----------- ----------- --------- ---------- ----------- ----------
BALANCE AT SEPTEMBER 30, 2004 (AUDITED) $ 1,500,000 $(1,500,000) $ 975 $ 219,462 $ (292,948) $ (72,511)
Net loss for the nine months ended
June 30, 2005 - - - - (23,945) (23,945)
----------- ----------- --------- ---------- ----------- ----------
BALANCE AT JUNE 30, 2005 (UNAUDITED) $ 1,500,000 $(1,500,000) $ 975 $ 219,462 $ (316,893) $ (96,456)
=========== =========== ========= ========== ========== ==========
The accompanying notes are an integral part of these
consolidated financial statements.
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BF ACQUISITION GROUP III, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED JUNE 30, 2005 AND 2004
(UNAUDITED)
2005 2004
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CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (23,945) $ (94,611)
Adjustment to reconcile net income to net cash
used in operating activities
Common stock issued for services - 69,430
Decrease in assets
Accounts receivable - 7,940
Increase (decrease) in liabilities
Accounts payable and accrued expenses 22,395 (1,432)
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Net cash used in operating activities (1,550) (18,673)
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CASH FLOWS FROM INVESTING ACTIVITIES
Increase in due from officer - (388)
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CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in amount due
to affiliate 1,458 (115,408)
Capital contribution - 130,000
Proceeds from issuance of common stock - 388
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Net cash provided by financing activities 1,458 14,980
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NET DECREASE IN CASH (92) (4,081)
CASH - BEGINNING OF YEAR 106 4,111
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CASH - END OF YEAR $ 14 $ 30
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SUPPLEMENTAL DISCLOSURE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES
Redemption of common stock
Common stock $ - $ (87)
Additional paid-in capital - -
Assumption of liabilities upon reverse
acquisition
Accounts payable $ - $ 4,331
Due to affiliate - 5,950
Additional paid-in capital - (10,281)
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$ - $ -
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The accompanying notes are an integral part of these
consolidated financial statements.
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BF ACQUISITION GROUP III, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2005 AND 2004
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
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BF Acquisition Group III, Inc., (the "Company"), a development
stage company, was organized in Florida on April 15, 1999 as a
"shell" company 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
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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-KSB and other information
included in the Company's Forms 8-Ks and amendments thereto as
filed with the Securities and Exchange Commission.
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BF ACQUISITION GROUP III, INC. & SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005 AND 2004
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Principles of Consolidation
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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 $1,916 for
the nine months ended June 30, 2005, and $144 for the three
months ended June 30, 2005.
Use of Estimates
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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
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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
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The Companies performs ongoing credit evaluations of its
customers' financial condition and, generally, requires no
collateral from its customers.
Fair Value of Financial Instruments
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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
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The Company's revenues are primarily generated from the sale of
fundraising products to customers that are principally nonprofit
organizations. The major terms of the arrangement are contained
in a fundraising agreement signed by the customer that indicates
the quantity, selling price, time of delivery and payment terms.
Revenues are recognized when the following criteria are met:
- Persuasive evidence of an arrangement exists
- Delivery has occurred or services have been rendered
- The price is fixed or determinable, and
- Collectibility is reasonably assured.
In addition, revenue is generally reported on a gross basis since
the Company acts as principal in the transaction, takes title to
the products and has the risks and rewards of ownership.
However, revenue is reported on a net basis if the Company acts
as agent in that the Company is not the primary obligor, has no
credit risk and the amount the Company earns is fixed.
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.
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BF ACQUISITION GROUP III, INC. & SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005 AND 2004
(UNAUDITED)
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 and has a working capital
deficit. These conditions raise 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.
NOTE 3 - RELATED PARTY TRANSACTIONS
The Company purchases products from a company related by common
ownership. During the nine months ended June 30, 2005 and 2004,
total purchases from related entity were $27,188 and $48,438,
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
nine months ended June 30, 2005 and 2004, these expenses amounted
to approximately $16,000 and $53,000, respectively.
As of June 30, 2005 and 2004, the payable to this entity amounted
to $61,341 and $55,691, 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 June 30, 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.
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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
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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
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to September 30. BF Acquisition Group operates as a holding
company on behalf of its majority owned subsidiary
FundraisingDirect.
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 July 29, 2005. You can go to www.sec.gov. for more
information.
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
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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
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FundraisingDirect has a history of net losses and it may not be
profitable in the future. Net loss for the nine months ended June
30, 2005 was $23,945 compared to $94,611 for the nine months
ended June 30, 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
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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
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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.
Nine months ended June 30, 2005 compared with nine months ended
June 30, 2004.
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Net sales for FundraisingDirect were $67,517 for the nine months
ended June 30, 2005, compared to $131,302 for the nine months
ended June 30, 2004, a decrease in the amount of $63,785 or
48.58%. 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.
Gross profit for FundraisingDirect as a percentage of net sales
was 28.16% for the nine months ended June 30, 2005, compared to
36.52% for the nine months ended June 30, 2004, a decrease of
22.89%. This decrease is a result of a change in the Company's
sales mix to product lines with a lesser gross profit percentage.
Selling, general and administrative expenses for
FundraisingDirect, were $42,962 for the nine months ended June
30, 2005, compared to $142,561 for the nine months ended June 30,
2004, a decrease of $99,599. The decrease is mainly due to a
reduction of allocated expenses from Imprints Plus, Inc. and the
cost of website development of $65,223.
Net loss for FundraisingDirect was $23,945 for the nine months
ended June 30, 2005, compared to $94,611 for the nine months
ended June 30, 2004, a decrease in net loss of $70,666. The
decrease was attributable to a reduction of allocated expenses
from Imprints Plus, Inc. and the cost of website development of
$65,223.
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Three months ended June 30, 2005 compared with three months ended
June 30, 2004.
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Net sales for FundraisingDirect were $-0- for the three months
ended June 30, 2005, compared to $1,826 for the three months
ended June 30, 2004, a decrease in the amount of $1,826 or
approximately 182.60%.
Gross profit for FundraisingDirect for the three months ended
June 30, 2005 was $-0- compared to $1,931 for the three months
ended June 30, 2004.
Selling, general and administrative expenses for
FundraisingDirect, were $1,804 for the three months ended June
30, 2005, compared to $85,620 for the three months ended June 30,
2004, a decrease of $83,816. The decrease is mainly attributable
to a reduction of allocated expense from Imprints Plus, Inc. and
the cost of website development of $65,223.
Net loss for FundraisingDirect was $1,804 for the three months
ended June 30, 2005, compared to a net loss $85,725 for the three
months ended June 30, 2004, a decrease in net loss of $83,921.
The decrease is mainly attributable to a reduction of allocated
expense from Imprints Plus, Inc. and the cost of website
development of $65,223.
Liquidity And Capital Resources
- -------------------------------
Cash was $14 at June 30, 2005 as compared to $31 at June 30,
2004; and working capital deficit was $96,456 at June 30, 2005 as
compared to $54,002 at June 30, 2004. The decrease in the working
capital deficit is primarily the result of continuing operating
losses.
Cash used by FundraisingDirect for operating activities during
the nine months ended June 30, 2005 was $(1,550), which included
$22,395 provided from accounts payable and accrued expenses.
FundraisingDirect's greatest source of cash during this period
was $22,395, 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 year 2005. As of
June 30, 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.
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
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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.
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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
Not Applicable
Item 5. Other Information
Not Applicable
Item 6. Exhibits
Exhibit No. Description of Exhibit
- ----------- ----------------------
(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.
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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: August 15, 2005
By:/s/ Justin P. DiNorscia
--------------------------------
Justin P. DiNorscia, President,
Treasurer
Dated: August 15, 2005
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