SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
--------------------------------------------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2002 Commission File No. 2-91651-D
Broadleaf Capital
Partners, Inc.
Colorado 87-0410039
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification Number)
2531 San Jacinto Street
San Jacinto, CA 92583
(Address and zip code of principal executive offices)
(909) 652-3885
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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.
[X] YES [_] NO
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Common Stock 2,305,448 Shares Outstanding
$0.001 par value as of March 31, 2002
BROADLEAF CAPITAL PARTNERS, INC.
AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
REPORT ON FORM 10-Q
QUARTER ENDED MARCH 31, 2002
TABLE OF CONTENTS
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Page
Number
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
. CONSOLIDATED BALANCE SHEETS AS OF
MARCH 31, 2002, AND DECEMBER 31, 2001 2 & 3
. SCHEDULE OF INVESTMENTS 4 & 5
. CONSOLIDATED STATEMENTS OF
OPERATIONS FOR THREE MONTHS ENDED
MARCH 31, 2002 AND MARCH 31, 2001 6
. CONSOLIDATED STATEMENTS
OF CASH FLOWS FOR THE THREE MONTHS
ENDED MARCH 31, 2002 AND MARCH 31, 2001 7 & 8
. NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS 9
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS 10
PART II. OTHER INFORMATION AND SIGNATURES 11
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Consolidated Balance Sheets
March 31, 2002 and December 31, 2001
ASSETS
------
March 31, December 31,
2002 2001
------------------ ------------------
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 304 $ 764
Accounts receivable, net 1,387 24,855
Notes receivable, net 1,676 -
------------------ ------------------
Total Current Assets 3,367 25,619
------------------ ------------------
FIXED ASSETS, NET 89,745 98,384
------------------ ------------------
OTHER ASSETS
Investments in limited partnerships 1,008,536 1,038,856
Other assets 890 1,059
------------------ ------------------
Total Other Assets 1,009,426 1,039,915
------------------ ------------------
TOTAL ASSETS $ 1,102,538 $ 1,163,918
================== ==================
The accompanying notes are an integral part of these
consolidated financial statements.
2
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Consolidated Balance Sheets (Continued)
March 31, 2002 and December 31, 2001
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
March 31, December 31,
2002 2001
------------------ ------------------
(Unaudited)
CURRENT LIABILITIES
Accounts payable $ 459,150 $ 499,195
Accounts payable -- officers and directors 11,469 225,760
Accrued expenses 183,746 181,789
Accrued interest 200,681 176,638
Judgments payable 2,145,093 2,083,300
Notes payable -- current portion 932,166 862,166
------------------ ------------------
Total Current Liabilities 3,932,305 4,028,848
------------------ ------------------
LONG-TERM DEBT
Notes payable -- long term 500,000 500,000
------------------ ------------------
NET LIABILITIES IN EXCESS OF THE ASSETS OF
DISCONTINUED OPERATIONS 268,301 295,892
------------------ ------------------
Total Liabilities 4,700,606 4,824,740
------------------ ------------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (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; 2,305,448 and 2,303,507 shares
issued and outstanding, respectively 2,306 2,304
Additional paid-in capital 12,323,962 12,302,987
Subscriptions receivable (149,569) (347,337)
Accumulated deficit (15,779,920) (15,623,929)
------------------ ------------------
Total Stockholders' Equity (Deficit) (3,598,068) (3,660,822)
------------------ ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) $ 1,102,538 $ 1,163,918
================== ==================
The accompanying notes are an integral part of these
consolidated financial statements.
3
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Schedule of Investments
March 31, 2002 and December 31, 2001
March 31, 2002
--------------
(Unaudited)
Number of
Description of Shares Owned Fair
Company Business (or %) Cost Value
- ----------------------------- ---------------------- ------------------ ------------------ ------------------
Canyon Shadows Real estate 10% $ 1,131,961 $ 1,008,536 (e)
IPO/Emerging Growth
Company, LLC Start-up 33% 100,000 -0- (f)
San Diego Soccer
Development Dormant company 1,551,001 715,905 -0- (f)
Other 8,000 15,962 -0- (f)
Bio-Friendly
Corporation Start-up 437,500 180,000 -0- (f)
Las Vegas Soccer
Development Start-up 1,020,000 20,000 -0- (f)
------------------ ------------------
Total $ 2,163,828 $ 1,008,536
================== ==================
December 31, 2001
-----------------
Canyon Shadows Real estate 10% $ 1,131,961 $ 1,038,856 (e)
IPO/Emerging Growth
Company, LLC Start-up 33% 100,000 -0- (a)
San Diego Soccer
Development Soccer franchise 1,551,001 715,905 -0- (c)
Other 8,000 15,962 -0- (f)
Bio-Friendly
Corporation Start-up 437,500 180,000 -0- (d)
Las Vegas Soccer
Development Start-up 1,020,000 20,000 -0- (d)
------------------ ------------------
Total $ 2,163,828 $ 1,038,856
================== ==================
Note - All of the above investments are considered non-income producing
securities.
The accompanying notes are an integral part of these
consolidated financial statements.
4
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Schedule of Investments (Continued)
March 31, 2002 and December 31, 2001
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.
f) At December 31, 2001, the Company's board of directors determined that
the Company is unlikely to recover its investments in these companies,
and elected to value the investments at zero. The board maintains the
same opinion at March 31, 2002.
The accompanying notes are an integral part of these
consolidated financial statements.
5
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Consolidated Statements of Operations
(Unaudited)
For the Three Months Ended
March 31,
---------------------------------------
2002 2001
----------------- -----------------
REVENUES $ 4,965 $ -
----------------- -----------------
EXPENSES
General and administrative 161,412 196,839
Bad debt expense - 138,796
Depreciation and amortization 8,639 11,450
----------------- -----------------
Total Expenses 170,051 347,085
----------------- -----------------
LOSS FROM CONTINUING OPERATIONS (165,086) (347,085)
----------------- -----------------
OTHER INCOME (EXPENSE)
Interest income - 12,641
Interest expense (66,294) (30,964)
Gain on forgiveness of debt 47,800 -
Realized gain (loss) on investments - (86)
Unrealized gain (loss) on investments - (108,850)
----------------- -----------------
Total Other Income (Expense) (18,494) (127,259)
----------------- -----------------
NET LOSS FROM CONTINUING OPERATIONS (183,580) (474,344)
INCOME FROM DISCONTINUED OPERATIONS 27,589 79,627
----------------- -----------------
NET LOSS (155,991) (394,717)
----------------- -----------------
OTHER COMPREHENSIVE GAIN
Gain on treasury stock - 1,512
----------------- -----------------
NET COMPREHENSIVE LOSS $ (155,991) $ (393,205)
================= =================
The accompanying notes are an integral part of these
consolidated financial statements.
6
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Consolidated Statements of Cash Flows
(Unaudited)
For the Three Months Ended
March 31,
---------------------------------------
2002 2001
----------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss from continuing operations $ (183,580) $ (474,344)
Adjustments to reconcile net loss to net cash used
by operating activities:
Depreciation and amortization 8,639 11,450
Bad debt expense - 138,796
Loss on investment - 107,424
Discontinued operations:
Net income (loss) 27,589 79,627
Depreciation and amortization - 2,410
Loss on disposal of assets 13,631
Changes in operating assets and liabilities:
(Increase) decrease in accounts and notes receivable 23,468 (110,000)
(Increase) decrease in notes receivable - related party (1,677) 4,036
(Increase) decrease in other assets 169 9,382
Increase (decrease) in accounts payable (40,045) (61,301)
Increase (decrease) in other liabilities (126,497) 84,503
Increase (decrease) in discontinued operation,
net liabilities (27,591) (13,789)
----------------- -------------------
Net Cash Used in Operating Activities (319,525) (208,175)
----------------- -------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Receipt of cash distributions on investment 30,320 -
Purchase of property and equipment - (2,410)
----------------- -------------------
Net Cash Used in Investing Activities 30,320 (2,410)
----------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term borrowings 70,000 -
Receipt of subscription receivable 210,568 10,000
Stock issued for cash 8,177 206,999
----------------- -------------------
Net Cash Provided by Financing Activities 288,745 216,999
----------------- -------------------
NET INCREASE (DECREASE) IN CASH (460) 6,414
CASH, BEGINNING OF PERIOD 764 2,513
----------------- -------------------
CASH, END OF PERIOD $ 304 $ 8,927
================= ===================
The accompanying notes are an integral part of these
consolidated financial statements.
7
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Consolidated Statements of Cash Flows (Continued)
(Unaudited)
For the Three Months Ended
March 31,
----------------------------------------
2002 2001
----------------- ------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Interest paid $ - $ 357,123
Income taxes paid $ - $ -
SUPPLEMENTAL DISCLOSURE OF NON-CASH
ACTIVITIES
Common stock issued in conversion of debentures
and interest $ 108,500 $ 108,500
The accompanying notes are an integral part of these
consolidated financial statements.
8
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
(Formerly Peacock Financial Corporation)
Notes to the Consolidated Financial Statements
March 31, 2002 and 2001
NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION
The accompanying unaudited condensed 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 generally accepted accounting
principles have been condensed or omitted in accordance with such
rules and regulations. The information furnished in the interim
condensed 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
audited financial statements and notes thereto included in its
December 31, 2001 Annual Report on Form 10-KSB. Operating results
for the three months ended March 31, 2002 are not necessarily
indicative of the results that may be expected for the year ending
December 31, 2002.
NOTE 2 - GOING CONCERN
As reported in the consolidated financial statements, the Company
has an accumulated deficit of approximately $15,800,000 as of
March 31, 2002. The Company also has certain debts that are in
default at March 31, 2002. The Company's stockholders' deficit at
March 31, 2002 was $3,598,068, and its current liabilities
exceeded its current assets by $3,928,938.
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.
9
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This Form 10-QSB contains forward looking statements within the meaning of
section 27A of the Securities Act of 1933 and section 21E of the Securities
Exchange Act of 1934. The Company's actual results could differ materially from
those set forth in the forward looking statements.
MANAGEMENT DISCUSSION
Broadleaf Capital Partners, Inc. (Company) is a venture capital fund that makes
direct investments in and provides management services to businesses that have
at least a one-year operating history, the original founding management, with
minimum annual revenues of $1.5 million. 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 first quarter of 2002 marked the continuance of assessing and consolidating
the Company's previous investments and operations.
Results of Operations - Three months ended March 31, 2002, compared to the three
months ended March 31, 2001.
Revenues. There were revenues of $4,965 for the first three months ended March
31, 2002, as compared to no revenues for the three months ended March 31, 2001.
Expenses. Total expenses for the three months ended March 31, 2002, decreased by
$177,034 or 51% to $170,051 from $347,085 for the three months ended March 31,
2001. General and administrative expenses for the three months ended March 31,
2002, decreased by $35,427 or 18% to $161,412 from $196,839 for the three months
ended March 31, 2001. This decrease resulted from reduced administrative and
operating costs.
Changes in Financial Condition, Liquidity and Capital Resource.
For the three months ended March 31, 2002, the Company funded its operations and
capital requirements partially with its own working capital and partially with
proceeds from stock offerings. As of March 31, 2002, the Company had cash of
$304.
10
SIGNATURES
Pursuant to the requirements 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.
May 20, 2002 /s/ Robert A. Braner
- ------------- --------------------
Date Robert A. Braner
Interim President
May 20, 2002 /s/ Lisa L. Martinez
- ------------- --------------------
Date Lisa L. Martinez
Corporate Secretary
11