10QSB: Optional form for quarterly and transition reports of small business issuers
Published on December 15, 2004
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 2004
Commission File No. 2-91651-D
Broadleaf Capital Partners, Inc.
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Nevada 88-0490034
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(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)Identification Number)
5440 W Sahara Ave, Suite 202
Las Vegas, NV 89146
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(Address and zip code of principal executive offices)
(702) 736-1560
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(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report)
Indicate by check mark whether Broadleaf Capital Partners, Inc. (1) has filed
all reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that Aspen was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [ X ] No [ ]
Issuer's revenues of its most recent fiscal year was $0.
The aggregate market value of the voting common stock held by non-affiliates
computed with reference to the average bid and asked price of such common
equity as of September 30, 2004 was $0.01 based on the average bid and ask
prices during September and October 2004.
As of November 30, 2004, the number of outstanding shares of the issuer's
common stock, $0.001 par value was 116,461,640 shares.
DOCUMENTS INCORPORATED BY REFERENCE: NONE
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT: Yes [ ] No [x]
1
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements..............................................3
Balance Sheets (unaudited)..........................................F1-F2
Schedule of Investments.............................................F3-F4
Statements of Operations (unaudited)................................F5
Statements of Cash Flows (unaudited)................................F6-F7
Notes to Financial Statements.......................................F8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................................4
Item 3. Controls and Procedures...........................................6
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................................6
Item 6. Exhibits and Reports on Form 8-K..................................6
Signatures................................................................7
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS
BROADLEAF CAPITAL PARTNERS, INC.
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2004 AND DECEMBER 31, 2003
3
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
September 30, 2004 and December 31, 2003
ASSETS
September 30, December 31,
2004 2003
----------- ------------
CURRENT ASSETS (Unaudited)
Cash $ 15,528 $ 3,075
Accounts receivable - related, net 18,901 12,753
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Total Current Assets 34,429 15,828
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FIXED ASSETS, NET - 10,038
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OTHER ASSETS
Investments in limited partnerships 777,428 815,983
Other investments, net (cost - $480,620) 56,391 106,391
Other assets 890 890
Assets associated with discontinued operations - 341
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Total Other Assets 834,709 923,605
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TOTAL ASSETS $ 869,138 $ 949,471
========== ============
The accompanying notes are an integral part of these consolidated financial
statements.
F1
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Continued)
September 30, 2004 and December 31, 2003
LIABILITIES AND STOCKHOLDERS' DEFICIT
September 30, December 31,
2004 2003
---------- ------------
(Unaudited)
CURRENT LIABILITIES
Accounts payable $ 399,293 $ 516,169
Accrued expenses - officers and directors 84,183 40,362
Accrued expenses 286,074 310,798
Accrued interest 374,298 307,130
Judgments payable 166,889 215,145
Notes payable - current portion 559,354 521,437
Liabilities associates with discontinued operations 353,978 353,978
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Total Current Liabilities 2,224,069 2,265,019
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LONG-TERM DEBT
Notes payable - long term 500,000 525,000
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Total Liabilities 2,724,069 2,790,019
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COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST 200,000 200,000
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STOCKHOLDERS' DEFICIT
Preferred stock: 10,000,000 shares authorized at
$0.01 par value; 515,300 shares issued and
outstanding 5,153 5,153
Common stock: 250,000,000 shares authorized at
$0.001 par value; 108,320,615 and 75,773,888 shares
issued and outstanding, respectively 108,588 75,774
Additional paid-in capital 13,876,285 13,731,300
Subscriptions payable 25,000 10,000
Expenses prepaid with common stock - (3,000)
Accumulated deficit (16,069,957) (15,859,775)
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Total Stockholders' Deficit (2,054,931) (2,040,548)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 869,138 $ 949,471
============ ============
F2
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
Schedule of Investments
September 30, 2004 and December 31, 2003
SEPTEMBER 30, 2004
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(Unaudited)
Number of
Description of Shares Owned Fair
Company Business (or %) Cost Value
- -------------------- ------------ -------------- ------------ ------------
Canyon Shadows Real estate 10% $ 1,131,961 $ 777,428 (e)
Nutek Oil Start-up 100,000 25,000 25,000 (b)
International Sports &
Media Group, Inc. Start-up 100,000 -0- 10,000 (c)
Silverleaf Venture Fund,
Ltd. Start-up 100% 75,000 21,391 (d)
----------- ----------
Total $1,231,961 $ 833,819
=========== ==========
DECEMBER 31, 2003
-------------------
Number of
Description of Shares Owned Fair
Company Busines (or %) Cost Value
- -------------------- ------------ -------------- ------------ ------------
Canyon Shadows Real estate 1% $ 1,131,961 $ 815,983 (a)
Nutek Oil Start-up 100,000 25,000 25,000 (b)
International Sports &
Media Group, Inc. Start-up 100,000 -0- 10,000 (c)
Silverleaf Venture Fund,
Ltd. Start-up 100% 75,000 71,391 (d)
----------- ---------
Total $1,231,961 $ 922,374
========== =========
Note - All of the above investments are considered non-income producing
securities.
F3
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
Schedule of Investments (Continued)
September 30, 2004 and December 31, 2003
a) Non-public company, represents ownership in an LLC, fair value is
determined in good faith by the Company based on a variety of factors.
b) Public market method of valuation based on trading price of stock at
year-end.
c) The fair value of restricted shares is determined in good faith by the
Company based on a variety of factors, including recent and historical
prices and other recent transactions.
d) No public market for this security exists - cost method of valuation
used.
e) The Company's board of directors has valued this investment at cost, less
cash distributions to the Company from Canyon Shadows.
F4
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
For the Nine Months Ended For the Three Months Ended
September 30, September 30,
----------------------- ---------------------------
2004 2003 2004 2003
----------- ---------- ---------- -----------
REVENUES
Other income $ - $ 1,900 $ - $ -
----------- ---------- ---------- -----------
Total Revenues - 1,900 -
----------- ---------- ---------- -----------
EXPENSES
General and administrative 249,340 240,549 114,218 201,125
Bad debt expense - 7,541 7,541
Depreciation and amortization 124 6,609 - 3,175
----------- ---------- ---------- -----------
Total Expenses 249,464 254,699 114,218 211,841
----------- ---------- ---------- -----------
LOSS FROM OPERATIONS (249,464) (252,799) (114,218) (211,841)
----------- ---------- ---------- -----------
OTHER INCOME (EXPENSE)
Interest expense (84,443) (131,366) (46,063) (75,280)
Loss on investments (3,770) - - -
Gain on forgiveness of debt 137,248 - 3,750 -
Gain (loss) on disposal of assets (9,412) 3,500 (342) -
----------- ---------- ---------- -----------
Total Other Income (Expense) 39,623 (127,866) (42,655) (75,280)
----------- ---------- ---------- -----------
NET LOSS FROM
CONTINUING OPERATIONS (209,841) (380,665) (156,873) (287,121)
NET LOSS FROM
DISCONTINUED OPERATIONS (341) (12,440) - (12,386)
----------- ---------- ---------- -----------
NET LOSS $ (210,182) $ (393,105)$ (156,873) $ (299,507)
----------- ---------- ---------- -----------
BASIC LOSS PER SHARE
Continuing operations $ (0.00) $ (0.01)$ (0.00) $ (0.01)
Discontinued operations (0.00) (0.00) (0.00) (0.00)
Basic Loss Per Share $ (0.00) $ (0.00)$ (0.00) $ (0.01)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 90,258,291 28,811,089 98,317,703 31,358,084
=========== =========== ========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
F5
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
For the Nine Months Ended
September 30,
---------------------------
2004 2003
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CASH FLOWS FROM OPERATING ACTIVITIES
Net loss from continuing operations $ (209,841) $ (380,665)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization 3,250 6,609
Gain on disposal of assets 88,626 -
Common stock issued for services - 3,500
Discontinued operations:
Net income (loss) (341) (12,440)
Changes in operating assets and liabilities:
Increase in accounts and notes receivable (6,148) -
Decrease in prepaids 3,000 -
Decrease in other assets 50,000 367
Decrease in accounts payable (116,876) 158,148
Decrease in other liabilities 53,009 66,434
Decrease in discontinued operations,
net loss 341 12,440
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Net Cash Used in Operating Activities (134,980) (145,607)
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CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from partial sale of investment 72,245 200,000
Receipt of cash distributions on investment - 65,946
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Net Cash Provided by Investing Activities 72,245 265,946
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CASH FLOWS FROM FINANCING ACTIVITIES
Stock issued for cash - 10,000
Proceeds from long-term borrowings 75,188 5,536
Payment of long-term borrowings - (1,100)
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Net Cash Provided by Financing Activities 75,188 14,436
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NET INCREASE IN CASH 12,453 134,775
CASH, BEGINNING OF PERIOD 3,075 749
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CASH, END OF PERIOD $ 15,528 $ 135,524
============ ===========
F6
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Continued)
(Unaudited)
For the Nine Months Ended
September 30,
---------------------------
2004 2003
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Interest paid $ - $ -
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Income taxes paid $ - $ -
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SUPPLEMENTAL DISCLOSURE OF NON-CASH
ACTIVITIES
Common stock issued in conversion of debentures
and interest $ 148,690 $ 190,535
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Common stock issued for services $ - $ 3,500
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F7
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
September 30, 2004 and December 31, 2003
NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States of America
have been condensed or omitted in accordance with such rules and regulations.
The information furnished in the interim condensed consolidated financial
statements include normal recurring adjustments and reflects all adjustments,
which, in the opinion of management, are necessary for a fair presentation of
such financial statements. Although management believes the disclosures and
information presented are adequate to make the information not misleading, it
is suggested that these interim condensed financial statements be read in
conjunction with the Company's most recent consolidated audited financial
statements and notes thereto included in its December 31, 2003 Annual Report on
Form 10-KSB. Operating results for the three and nine months ended September
30, 2004 are not necessarily indicative of the results that may be expected for
the year ending December 31, 2004.
NOTE 2 - GOING CONCERN
As reported in the consolidated financial statements, the Company has an
accumulated deficit of approximately $16,100,000 as of September 30, 2004. The
Company also has certain debts that are in default at September 30, 2004.
The Company's stockholders' deficit at September 30, 2004 was approximately
$2,100,000, and its current liabilities exceeded its current assets by
approximately $2,190,000.
These factors create uncertainty about the Company's ability to continue as a
going concern. The ability of the Company to continue as a going concern is
dependent on the Company obtaining adequate capital to fund operating losses
until it becomes profitable. If the Company is unable to obtain adequate
capital it could be forced to cease operations.
In order to continue as a going concern, develop and generate revenues and
achieve a profitable level of operations, the Company will need, among other
things, additional capital resources. Management's plans to obtain such
resources for the Company include (1) raising additional capital through sales
of common stock, (2) converting promissory notes into common stock and (3)
entering into acquisition agreements with profitable entities with significant
operations. In addition, management is continually seeking to streamline its
operations and expand the business through a variety of industries, including
real estate and financial management. However, management cannot provide any
assurances that the Company will be successful in accomplishing any of its
plans. The accompanying financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going
concern.
NOTE 3 - Significant Events
On May 11, 2004, the Company issued 6,415,932 shares of common stock to two
unrelated parties upon conversion of promissory notes.
F8
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following is a discussion of certain factors affecting Registrant's results
of operations, liquidity and capital resources. You should read the following
discussion and analysis in conjunction with the Registrant's consolidated
financial statements and related notes that are included herein under Item 1
above.
CAUTIONARY STATEMENTS FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995.
The statements contained in the section captioned Management's Discussion and
Analysis of Financial Condition and Results of Operations which are historical
are "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. These forward-looking statements represent the
Registrant's present expectations or beliefs concerning future events. The
Registrant cautions that such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Registrant to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include, among other
things, the uncertainty as to the Registrant's future profitability; the
uncertainty as to the demand for Registrant's services; increasing competition
in the markets that Registrant conducts business; the Registrant's ability to
hire, train and retain sufficient qualified personnel; the Registrant's ability
to obtain financing on acceptable terms to finance its growth strategy; and the
Registrant's ability to develop and implement operational and financial systems
to manage its growth.
MANAGEMENT DISCUSSION
Broadleaf Capital Partners, Inc. (Company) is a venture capital fund and plans
to continue as a Business Development Corporation (BDC) under the 1940 Act.
The Company makes direct investments in and provides management services to
businesses that have at least a one-year operating history, the original
founding management, and operating in niche or under-served markets. The
Company intends to expand on its investment strategy and portfolio through the
internal development of its present operations and other business
opportunities, as well as the acquisition of additional business ventures.
The Company has in the past, and may again in the future, raise capital
specifically for the purpose of maintaining operations and making an investment
that the Company believes is attractive.
ANALYSIS OF FINANCIAL CONDITION
The third quarter of 2004 marked the continuance of assessing and
consolidating the Company's previous investments and operations.
Results of Operations - Three months ended September 30, 2004, compared to the
three months ended September 30, 2003.
Revenues. There were no revenues for the three months ended September 30, 2004,
and 2003. The lack of revenues was primarily due to the absence of development
income.
4
Operating Expenses. Expenses for the three months ended September 30, 2004
decreased by $97,623 or 46.08% to $114,218 from $211,841 for the three months
ended September 30, 2003. General and administrative expenses for the three
months ended September 30, 2004 decreased by $86,907 or 43.21% to $114,218 from
$201,125. This decrease was primarily due to an operational expense decrease.
Changes in Financial Condition, Liquidity and Capital Resource.
For the three months ended September 30, 2004 the Company funded its operations
and capital requirements partially with its own working capital and partially
with proceeds from stock offerings. As of September 30, 2004, the Company had
cash of $15,528.
Forward-Looking Statements
This Form 10-QSB includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other than
statements of historical facts, included or incorporated by reference in this
Form 10-QSB which address activities, events or developments which the Company
expects or anticipates will or may occur in the future, including such things
as future capital expenditures (including the amount and nature thereof),
finding suitable merger or acquisition candidates, expansion and growth of the
Company's business and operations, and other such matters are forward-looking
statements.
These statements are based on certain assumptions and analyses made by the
Company in light of its experience and its perception of historical trends,
current conditions and expected future developments as well as other factors it
believes are appropriate in the circumstances. However, whether actual results
or developments will conform with the Company's expectations and predictions is
subject to a number of risks and uncertainties, general economic market and
business conditions; the business opportunities (or lack thereof) that may be
presented to and pursued by the Company; changes in laws or regulation; and
other factors, most of which are beyond the control of the Company.
This Form 10-QSB contains statements that constitute "forward-looking
statements." These forward-looking statements can be identified by the use of
predictive, future-tense or forward-looking terminology, such as "believes,"
"anticipates," "expects," "estimates," "plans," "may," "will," or similar
terms. These statements appear in a number of places in this Registration and
include statements regarding the intent, belief or current expectations of the
Company, its directors or its officers with respect to, among other things: (i)
trends affecting the Company's financial condition or results of operations for
its limited history; (ii) the Company's business and growth strategies; (iii)
the Internet and Internet commerce; and, (iv) the Company's financing plans.
Investors are cautioned that any such forward-looking statements are not
guarantees of future performance and involve significant risks and
uncertainties, and that actual results may differ materially from those
projected in the forward-looking statements as a result of various factors.
Factors that could adversely affect actual results and performance include,
among others, the Company's limited operating history, dependence on continued
growth in the use of the Internet, the Company's inexperience with the
Internet, potential fluctuations in quarterly operating results and expenses,
security risks of transmitting information over the Internet, government
regulation, technological change and competition.
5
Consequently, all of the forward-looking statements made in this Form 10-QSB
are qualified by these cautionary statements and there can be no assurance that
the actual results or developments anticipated by the Company will be realized
or, even if substantially realized, that they will have the expected
consequence to or effects on the Company or its business or operations. The
Company assumes no obligations to update any such forward-looking statements.
ITEM 3. CONTROLS AND PROCEDURES
As of September 30, 2004, the Company carried out an evaluation, under the
supervision and with the participation of the Company's management, including
the Company's Chief Executive Officer and President, of the effectiveness of
the design and operation of the Company's disclosure controls and procedures
pursuant to Rule 13a-14 of the Securities Exchange Act of 1934. Based upon
that evaluation, these principal executive officers and principal financial
officer concluded that the Company's disclosure controls and procedures are
effective in timely alerting them to material information relating to the
Company, including its consolidated subsidiaries, required to be included in
the Company's periodic SEC filings. There have been no significant changes in
internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
References made to a previous disclosure on the 10-KSB for December 31, 2003.
There has been one material development in the previously disclosed legal
proceedings, which follows:
On March 26, 2004, the Company was notified of a judgment obtained against it
in an Illinois District Court in the amount of $14,558, including accrued
interest and of the domestication of the judgment in Utah. Shortly thereafter,
the Company was notified of a Writ of Execution in Utah. In May 2004, the
Company fully satisfied this judgment via a cash payment of $14,558.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K: NONE
(a) Exhibits:
- Exhibit 15 Letter on Unaudited Interim Financial Information.
- Exhibit 31.1 Certification Pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002 of the Chief Executive Officer.
- Exhibit 31.2 Certification Pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002 of the Chief Financial Officer.
- Exhibit 32.1 Certification Pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002 of the Chief Executive Officer.
- Exhibit 32.2 Certification Pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002 of the Chief Financial Officer.
6
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: December 15, 2004
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Broadleaf Capital Partners, Inc.
------------
(Registrant)
/s/ Robert A. Braner
- - -----------------------------------
Robert A. Braner, President and Chairman of the Board
Date: December 15, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following person(s) on behalf of the
registrant and in the capacities and on the dates indicated.
Broadleaf Capital Partners, Inc.
------------
(Registrant)
/s/ Melissa R. Welch
- - -----------------------------------
Melissa R. Welch, CFO and Corporate Secretary
Date: December 15, 2004
7