U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
X...Quarterly report under section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended May 31, 1997.
....Transition report under section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required] for the transition period
from _________ to _________.
Commission File No: ______
BUFFALO CAPITAL OPPORTUNITIES II, LTD.
(Name of small business in its charter)
Colorado 84-1356379
(State or other (IRS Employer Id. No.)
jurisdiction of Incorporation)
7331 S. Meadow Court,
Boulder, Colorado 80301
(Address of Principal Office) Zip Code
Issuer's telephone number: (303) 530-3353
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 12
months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes ..X.. No ....
Applicable only to issuers involved in bankruptcy proceedings during
the past five years
Check whether the issuer has filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes .....
No .....
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. At 5/31/97 the
following shares of common were outstanding: Common Stock, no
par value, 135,000 shares; Class A Warrants to purchase common
stock, 4,830,000; Class B Warrants to purchase common stock,
2,415,000.
Transitional Small Business Disclosure
Format (Check one):
Yes ..... No ..X..
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS
(a) The unaudited financial statements of registrant for the
three months ended May 31, 1997, follow. The financial statements
reflect all adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the interim period
presented.
BUFFALO CAPITAL II, LTD.
(A Development Stage Company)
FINANCIAL STATEMENTS
Quarter Ended May 31, 1997
Buffalo Capital II, Ltd.
(A Development Stage Company)
Index to Consolidated Financial Statements
Balance Sheet
Statement of Loss and Accumulated Deficit
Statements of Cash Flows
Statement of Stockholders' Equity
Notes to Financial Statements
Buffalo Capital II, Ltd.
(A Development Stage Company)
BALANCE SHEET
as of and for the quarter ended
MAY 31, 1997
(unaudited)
May 31, 1997
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 3,731
OTHER ASSETS:
Organizational costs (net
of amortization) 255
TOTAL CURRENT
ASSETS 3,986
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable -0-
STOCKHOLDERS' EQUITY
Common stock, no par value;
100,000,000 shares authorized;
1,135,000 shares issued and
outstanding 7,500
Preferred stock, no par value
10,000,000 shares authorized;
no shares issued and outstanding -0-
Additional paid-in capital 60,450
Deficit accumulated
during the
development stage (63,964)
Total stockholders' equity 3,986
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY 3,986
The accompanying notes are an integral part of these financial statements.
Buffalo Capital II, Ltd.
(A Development Stage Company)
STATEMENT OF LOSS AND ACCUMULATED DEFICIT
as of and for the nine months ended
MAY 31, 1997
(unaudited)
Three Nine Period from
Months Months Inception
Ended Ended (8/28/96) to
5/31/97 5/31/97 5/31/97
INCOME - - -
EXPENSES
Legal and
professional 105 3,306 3,411
Amortization - 45 45
Bank charges 6 (6) -
Rent - 450 450
Filing fees - 55 55
Consulting fees 40 59,760 59,800
Director fees 200 - 200
Office expense - 3 3
TOTAL EXPENSES 351 63,613 63,964
NET LOSS (351) (63,613) (63,964)
Accumulated deficit
Balance, Beginning
of period -0- (351) -0-
Balance, End of
period (351) (63,694) (63,964)
Loss per common
share (NIL) (NIL) (NIL)
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING 135,000 135,000 135,000
The accompanying notes are an integral part of these financial statements.
Buffalo Capital II, Ltd.
(A Development Stage Company)
STATEMENTS OF CASH FLOW
(unaudited)
Three Nine Period from
Months Months Inception
Ended Ended (8/28/96) to
5/31/97 5/31/97 5/31/97
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss (351) (63,613) (63,964)
Noncash items included
in net loss:
Amortization - 45 45
Rent - 450 450
Stock issued for
consulting fees 40 59,760 59,800
Stock issued for
directors fees 200 - 200
Changes in
Current
liabilities 405 (405) -
Net cash used
by operating
activities 294 (3,763) (3,469)
CASH FLOWS FROM INVESTING ACTIVITIES:
Organization costs (300) - (300)
Issuance of common
stock 5,000 2,500 7,500
Net cash and cash
equivalents provided
(used) by financing
activities 4,700 2,500 7,200
Net increase (decrease)
in cash and cash
equivalents 4,994 (1,263) 3,731
CASH AND CASH EQUIVALENTS,
Beginning of Period -0- 4,994 -0-
CASH AND CASH EQUIVALENTS,
End of Period 4,994 3,731 3,731
The accompanying notes are an integral part of these financial statements.
Buffalo Capital II, Ltd.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
For the period from inception (August 28, 1996)
to May 31, 1997
(page 1 of 2)
Deficit
accumulated Total
Common Stock during the stock-
Number of development holder
shares Amount stage equity
Common stock issued for
cash and subscriptions,
receivable, August 1996
at $.50 per share 15,000 7,500 - 7,500
Common stock issued
for services, August 1996
at $.0001 per share 2,400,000 240 - 240
Net loss for the period
ended May 31, 1997 - - (351) (351)
Balance
August 31, 1996 2,415,000 7,740 (351) 7,389
Shares cancelled at
$.0001 per share (2,280,000) - - -
Record and reclass APIC
for services - (240) - 59,760
Rent provided at
no charge - - - 450
Net loss for the period
period ended May 31, 1997 - - (63,613) (63,613)
Balance May 31, 1997 135,000 7,500 (63,964) 3,986
The accompanying notes are an integral part of these financial statements.
Buffalo Capital II, Ltd.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
For the period from inception (August 28, 1996)
to May 31, 1997
(page 2 of 2)
Additional
Paid-in
Capital
Common stock issued for
cash and subscriptions,
receivable, August 1996
at $.50 per share -
Common stock issued
for services, August 1996
at $.0001 per share -
Net loss for the period
ended May 31, 1997 -
Balance
August 31, 1996 (351)
Shares cancelled at
$.0001 per share -
Record and reclass APIC
for services 60,000
Rent provided at
no charge 450
Net loss for the period
period ended May 31, 1997 -
Balance May 31, 1997 60,450
The accompanying notes are an integral part of these financial statements.
Buffalo Capital II, Ltd.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
May 31, 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Development stage company
Buffalo Capital II, Ltd. (the "Company") was incorporated under the
laws of the State of Colorado on August 28, 1996. Its office is
located at the office of its president at 7331 South Meadow Court,
Boulder, CO 80301.
The Company is a new enterprise in the development stage as defined
by Statement No. 7 of the Financial Accounting Standards Board and
has not engaged in any business other than organizational efforts. It
has no full-time employees and owns no real property. The Company
intends to seek to acquire one or more existing businesses which have
existing management, through merger or acquisition, that may have
potential for profit, and to that end, intends to acquire properties or
businesses, or a controlling interest therein. Management of the
Company will have virtually unlimited discretion in determining the
business activities in which the Company might engage.
The Company currently does not own any properties or an interest in
any business. Moreover, it has not identified any properties or
business opportunities that it shall seek to acquire, has no
understanding or arrangements to acquire any properties or business
interests, and has not identified any specific geographical area,
industry, or type of business in which it intends to operate.
Accounting Method
The Company records income and expenses on the accrual method.
Fiscal year
The Company has selected an August 31 fiscal year end.
Organization costs
Costs to incorporate the Company have been capitalized and will be
amortized over a sixty-month period.
Statement of cash flows
For purposes of the statement of cash flows, the Company considers
all highly liquid debt instruments purchased with an original maturity
of three months or less to be cash equivalents.
2. STOCKHOLDERS' EQUITY
The Company is authorized to issue up to 10,000,000 shares of its no
par value preferred stock. The preferred stock may be issued in series,
from time to time with such designation, rights, preferences and
limitations as the Board of Directors may determine by resolution. As
of May 31, 1997, no shares of preferred stock were issued or
outstanding.
As of May 31, 1997, 135,000 shares of the Company's no par value
common stock had been issued, along with 4,830,000 Class A warrants
and 2,415,000 Class B warrants entitling the holder to purchase one
share of stock for $2.00 and $4.00 respectively. Of these shares
120,000 were subscribed for services rendered in the capacity of
directors and consultants. The remaining 15,000 shares were issued
for cash at a price of $.50 per share.
For the period ended May 31, 1997, 2,280,000 shares of the
Company's common stock were cancelled. All share and per share
amounts have been restated to reflect these cancellations to the
Company's inception.
3. RELATED PARTY TRANSACTIONS
The Company's directors and officers are also the principal
shareholders. Each has received 30,000 shares of stock (22% each of
the outstanding shares). In each case the shares were issued for
services provided which have been valued at $60,000.
The Company's general and securities counsel, Gary S. Joiner, a
partner in the law firm of Frascona, Joiner & Goodman, P.C., is one
of the Company's principal shareholders. Since inception, the
Company has paid $2,500 for legal services rendered, $300 of which
was capitalized as organizational costs, with $0 payable at May 31,
1997.
The President of the Company is providing office space at no charge
to the Company. For purposes of the financial statements, the
Company is accruing $50 per month as additional paid-in capital for
this use.
4. SUPPLEMENTAL DISCLOSURE OF NON-CASH
FINANCING ACTIVITIES.
As mentioned in Note 3, the Company has incurred $450 since
inception in rent expense which has been designated as paid-in capital.
5. INCOME TAXES
The Company has Federal net operating loss carryforwards of
approximately $63,964 expiring in the year 2012. The tax benefit of
these net operating losses, which totals approximately $12,153, has
been offset by a full allowance for realization. This carryforward may
be limited upon the consummation of a business combination under
IRC Section 381.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION
Liquidity and Capital Resources.
The Company remains in the development stage, and since inception,
has experienced no significant change in liquidity or capital resources
or stockholders' equity other than the receipt of net proceeds in the
amount of $7,500 from its inside capitalization funds. Consequently,
the Company's balance sheet for the period of May 31, 1997, reflects
a current asset value of $3,731 and a total asset value of $3,986.
The Company will carry out its plan of business to seek out and take
advantage of business opportunities that may have potential for profit,
and acquire such businesses, or a controlling interest therein. The
Company cannot predict to what extent its liquidity and capital
resources will be diminished prior to the consummation of a business
combination or whether its capital will be further depleted by the
operating losses (if any) of the business entity which the Company
may eventually acquire.
Results of Operations.
During the period from August 28, 1996 (inception) through May 31,
1997, the Company has engaged in no significant operations other than
the acquisition of capital and registering its securities under the
Securities and exchange Act of 1934, as amended. No revenues were
received by the Company during this period. The Company has
experienced a net loss of $63,964 since inception. This loss is
primarily the result of legal and accounting costs of compliance with
the reporting requirements of the securities laws and issuance of stock
to the Company's officers and directors and other non-management
principal shareholders for consulting services related to organization of
the Company and development of its business plan.
For the current fiscal year, the Company anticipates an increased net
loss owing to expenses associated with locating and evaluating
acquisition candidates. The Company anticipates that until a business
combination is completed with an acquisition candidate, it will not
generate revenues, and may continue to operate at a loss after
completing a business combination, depending upon the performance
of the acquired business.
Irrespective of whether the Company's cash assets prove to be
inadequate to meet the Company's operational needs, the Company
might seek to compensate providers of services by issuance of stock in
lieu of cash.
Need for Additional Financing.
The Company believes that its existing capital will be sufficient to
meet the Company's cash needs, including the costs of compliance
with the continuing reporting requirements of the Securities Exchange
Act of 1934, as amended, until the Company shall have completed a
business combination.
There is no assurance, however, that the available funds will ultimately
prove to be adequate for the Company's operations. No other
commitments to provide funds have been made by management or
other stockholders. Accordingly, there can be no assurance that any
other loans will be made to the Company or that other funds will
prove to be available to cover the Company's expenses.
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBIT 27 - FINANCIAL DATA SCHEDULE
There have been no reports on Form 8-K for the quarter ending
May 31, 1997.
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.
BUFFALO CAPITAL II, LTD.
(Registrant)
Date: July 14, 1997
/s/
Grant Peck, President