UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly periods ended March 31, June 30, and September 30, 2006
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File Number 814-00175
BROADLEAF CAPITAL PARTNERS, INC.
(Exact name of Registrant as specified in its charter)
Nevada
|
|
88-0490034
|
(State or other jurisdiction of
|
|
(I.R.S. Employer
|
incorporation or organization)
|
|
Identification Number)
|
|
|
|
3887 Pacific Street
|
|
|
Las Vegas, Nevada
|
|
89121
|
(Address of principal executive offices)
|
|
(Zip Code)
|
(702) 650-3000
(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.
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer o
|
Accelerated filer o
|
|
Non-accelerated filer x
|
Smaller reporting company o
|
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
As of August 29, 2011 the registrant had 144,419,925 shares of common stock outstanding.
Broadleaf Capital Partners, Inc.
INDEX TO FORM 10-Q
PART I.
|
FINANCIAL INFORMATION
|
Page
|
|
|
|
Item 1.
|
Consolidated Financial Statements:
|
|
|
|
|
|
Consolidated Balance Sheets at March 31, 2006 (unaudited), June 30, 2006 (unaudited),
|
|
|
September 30, 2006 (unaudited) and December 31, 2005 (audited)
|
4
|
|
|
|
|
Consolidated Schedule of Investments at March 31, 2006 (unaudited), June 30, 2006 (unaudited),
|
|
|
September 30, 2006 (unaudited) and December 31, 2005 (audited)
|
5
|
|
|
|
|
Consolidated Statements of Operations for the Six Months Ended June 30, 2006 (unaudited)
|
|
|
and 2005 (unaudited), and the Nine Months ended September 30, 2006 (unaudited) and 2005 (unaudited)
|
6
|
|
|
|
|
Consolidated Statements of Operations for the Three Months Ended March 31, 2006
|
|
|
(unaudited) and 2005 (unaudited), for the Three Months Ended June 30, 2006 (unaudited) and 2005 (unaudited), for the Three Months Ended September 30, 2006 (unaudited) and 2005 (unaudited)
|
7
|
|
|
|
|
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2006
|
|
|
(unaudited) and 2005 (unaudited), for the Six Months Ended June 30, 2006 (unaudited) and 2005 (unaudited), and the Nine Months Ended September 30, 2006 (unaudited) and 2005 (unaudited)
|
8
|
|
|
|
|
Notes to Consolidated Financial Statements
|
10
|
|
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition
|
|
|
and Results of Operations
|
24
|
|
|
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
29
|
|
|
|
Item 4.
|
Controls and Procedures
|
29
|
|
|
|
|
|
|
PART II.
|
OTHER INFORMATION
|
|
|
|
|
Item 1.
|
Legal Proceedings
|
30
|
|
|
|
Item 1A.
|
Risk Factors
|
30
|
|
|
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
32
|
|
|
|
Item 6.
|
Exhibits
|
33
|
|
|
|
SIGNATURES
|
34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
|
|
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/2006
|
|
|
6/30/2006
|
|
|
3/31/2006
|
|
|
12/31/2005
|
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Audited
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$ |
763 |
|
|
$ |
2,850 |
|
|
$ |
2,496 |
|
|
$ |
1,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Current Assets
|
|
|
763 |
|
|
|
2,850 |
|
|
|
2,496 |
|
|
|
1,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS, NET (Note2, 5)
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER ASSETS - Investments in limited partnerships -
|
|
|
162,155 |
|
|
|
162,155 |
|
|
|
162,155 |
|
|
|
162,155 |
|
(Note 2,4,8,9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$ |
162,918 |
|
|
$ |
165,005 |
|
|
$ |
164,651 |
|
|
$ |
163,755 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$ |
324,420 |
|
|
$ |
324,420 |
|
|
$ |
324,420 |
|
|
$ |
324,420 |
|
Accrued Expenses
|
|
|
169,608 |
|
|
|
169,608 |
|
|
|
169,608 |
|
|
|
169,608 |
|
Accrued interest
|
|
|
66,763 |
|
|
|
60,299 |
|
|
|
53,835 |
|
|
|
47,371 |
|
Judgments payable
|
|
|
78,882 |
|
|
|
78,882 |
|
|
|
78,882 |
|
|
|
78,882 |
|
Notes payable - current portion (Note 7)
|
|
|
1,292,308 |
|
|
|
1,292,308 |
|
|
|
1,292,308 |
|
|
|
1,292,308 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities
|
|
|
1,931,981 |
|
|
|
1,925,517 |
|
|
|
1,919,053 |
|
|
|
1,912,589 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LONG-TERM DEBT - Notes payable - long term (Note 7)
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
1,931,981 |
|
|
|
1,925,517 |
|
|
|
1,919,053 |
|
|
|
1,912,589 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES (Note 8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock authorized at $0.001 par value;
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
shares issued and outstanding 40,473,605
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Common Shares issued and outstanding, respectively
|
|
|
140,474 |
|
|
|
140,474 |
|
|
|
140,474 |
|
|
|
140,474 |
|
Additional paid-in capital
|
|
|
13,875,209 |
|
|
|
13,875,209 |
|
|
|
13,875,209 |
|
|
|
13,875,209 |
|
Stock Subscriptions
|
|
|
(10,304 |
) |
|
|
(10,304 |
) |
|
|
(10,304 |
) |
|
|
(10,304 |
) |
Accumulated deficit
|
|
|
(15,774,442 |
) |
|
|
(15,765,891 |
) |
|
|
(15,759,781 |
) |
|
|
(15,754,213 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Stockholders' Equity (Deficit)
|
|
|
(1,769,063 |
) |
|
|
(1,760,512 |
) |
|
|
(1,754,402 |
) |
|
|
(1,748,834 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES, AND
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY (DEFICIT)
|
|
$ |
162,918 |
|
|
$ |
165,005 |
|
|
$ |
164,651 |
|
|
$ |
163,755 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
"The accompanying notes are an integral part of these consolidated financial statements."
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Schedule of Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Owned
|
|
|
Original
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
Business
|
|
or %
|
|
|
Cost
|
|
|
|
9/30/2005
|
|
|
6/30/2005
|
|
|
3/31/2005
|
|
|
12/31/2004
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Audited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canyon Shadows
|
Real Estate
|
|
|
1 |
% |
|
$ |
1,131,961 |
|
(a)
|
|
$ |
781,655 |
|
|
$ |
781,655 |
|
|
$ |
781,655 |
|
|
$ |
781,655 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL INVESTMENTS
|
|
|
|
|
|
|
|
|
|
|
|
$ |
781,655 |
|
|
$ |
781,655 |
|
|
$ |
781,655 |
|
|
$ |
781,655 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule of Investments - Descriptions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a) The Company's Investment Committee has valued this investment at cost,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
less cash distributions to the Company from Canyon Shadows.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
|
|
Consolidated Statements of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended
|
|
|
For the Six Months Ended
|
|
|
|
9/30/2006
|
|
|
9/30/2005
|
|
|
6/30/2006
|
|
|
6/30/2005
|
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
$ |
5,697 |
|
|
$ |
134,711 |
|
|
$ |
3,798 |
|
|
$ |
134,078 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
6,534 |
|
|
|
218,384 |
|
|
|
2,548 |
|
|
|
190,102 |
|
Depreciation (Note 5)
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Expenses
|
|
|
6,534 |
|
|
|
218,384 |
|
|
|
2,548 |
|
|
|
190,102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INVESTMENT INCOME(LOSS)
|
|
|
(837 |
) |
|
|
(83,673 |
) |
|
|
1,250 |
|
|
|
(56,024 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(19,392 |
) |
|
|
(19,392 |
) |
|
|
(12,928 |
) |
|
|
(12,928 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Other Income (Expense)
|
|
|
(19,392 |
) |
|
|
(19,392 |
) |
|
|
(12,928 |
) |
|
|
(12,928 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) FROM CONTINUING
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERARION BEFORE INCOME TAXES
|
|
|
(20,229 |
) |
|
|
(103,065 |
) |
|
|
(11,678 |
) |
|
|
(68,952 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes (Note 2)
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
|
|
|
(20,229 |
) |
|
|
(103,065 |
) |
|
|
(11,678 |
) |
|
|
(68,952 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC INCOME (LOSS) PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Income (Loss) Per Share (Note 2)
|
|
|
(0.000 |
) |
|
|
(0.001 |
) |
|
|
(0.000 |
) |
|
|
(0.001 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHARES OUTSTANDING
|
|
|
140,473,605 |
|
|
|
138,845,115 |
|
|
|
140,473,605 |
|
|
|
135,030,871 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
"The accompanying notes are an integral part of these consolidated financial statements."
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
|
|
Consolidated Statements of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/2006
|
|
|
9/30/2005
|
|
|
6/30/2006
|
|
|
6/30/2005
|
|
|
3/31/2006
|
|
|
3/31/2005
|
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
$ |
1,899 |
|
|
$ |
633 |
|
|
$ |
1,899 |
|
|
$ |
87,110 |
|
|
$ |
1,899 |
|
|
$ |
46,968 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
3,986 |
|
|
|
28,282 |
|
|
|
1,545 |
|
|
|
81,062 |
|
|
|
1,003 |
|
|
|
109,040 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Expenses
|
|
|
3,986 |
|
|
|
28,282 |
|
|
|
1,545 |
|
|
|
81,062 |
|
|
|
1,003 |
|
|
|
109,040 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INVESTMENT INCOME(LOSS)
|
|
|
(2,087 |
) |
|
|
(27,649 |
) |
|
|
354 |
|
|
|
6,048 |
|
|
|
896 |
|
|
|
(62,072 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(6,464 |
) |
|
|
(6,464 |
) |
|
|
(6,464 |
) |
|
|
(6,464 |
) |
|
|
(6,464 |
) |
|
|
(6,464 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Other Income (Expense)
|
|
|
(6,464 |
) |
|
|
(6,464 |
) |
|
|
(6,464 |
) |
|
|
(6,464 |
) |
|
|
(6,464 |
) |
|
|
(6,464 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) FROM CONTINUING
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERARION BEFORE INCOME TAXES
|
|
|
(8,551 |
) |
|
|
(34,113 |
) |
|
|
(6,110 |
) |
|
|
(416 |
) |
|
|
(5,568 |
) |
|
|
(68,536 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes (Note 2)
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
|
|
|
(8,551 |
) |
|
|
(34,113 |
) |
|
|
(6,110 |
) |
|
|
(416 |
) |
|
|
(5,568 |
) |
|
|
(68,536 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC INCOME (LOSS) PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Income (Loss) Per Share (Note 2)
|
|
|
(0.000 |
) |
|
|
(0.000 |
) |
|
|
(0.000 |
) |
|
|
(0.000 |
) |
|
|
(0.000 |
) |
|
|
(0.001 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHARES OUTSTANDING
|
|
|
140,473,605 |
|
|
|
140,473,605 |
|
|
|
140,473,605 |
|
|
|
140,473,605 |
|
|
|
140,473,605 |
|
|
|
129,588,136 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
"The accompanying notes are an integral part of these consolidated financial statements."
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
|
|
Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine, Six, and Three Months Ended,
|
|
|
|
|
|
|
9/30/2006
|
|
|
9/30/2005
|
|
|
6/30/2006
|
|
|
6/30/2005
|
|
|
3/31/2006
|
|
|
3/31/2005
|
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations
|
|
$ |
(20,229 |
) |
|
$ |
(103,065 |
) |
|
$ |
(11,678 |
) |
|
$ |
(68,952 |
) |
|
$ |
(5,568 |
) |
|
$ |
(68,536 |
) |
Adjustments to reconcile net loss to net cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
used by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for services
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in other assets
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
(Increase) decrease in accounts receivable
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Increase (decrease) in accounts payable
|
|
|
0 |
|
|
|
(29,712 |
) |
|
|
0 |
|
|
|
(29,712 |
) |
|
|
0 |
|
|
|
0 |
|
Increase (decrease) in Acrued Expenses
|
|
|
19,392 |
|
|
|
19,392 |
|
|
|
12,928 |
|
|
|
12,928 |
|
|
|
6,464 |
|
|
|
6,464 |
|
Increase (decrease) in Judgements Payable
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Used in Operating Activities
|
|
|
(837 |
) |
|
|
(113,385 |
) |
|
|
1,250 |
|
|
|
(85,736 |
) |
|
|
896 |
|
|
|
(62,072 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds received from common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
investments and note conversions to stock
|
|
|
0 |
|
|
|
68,131 |
|
|
|
0 |
|
|
|
68,131 |
|
|
|
0 |
|
|
|
37,395 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided (Used) in Investing Activities
|
|
|
0 |
|
|
|
68,131 |
|
|
|
0 |
|
|
|
68,131 |
|
|
|
0 |
|
|
|
37,395 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayment of notes payable
|
|
|
0 |
|
|
|
(9,500 |
) |
|
|
0 |
|
|
|
(9,500 |
) |
|
|
0 |
|
|
|
0 |
|
Net Proceeds from borrowings
|
|
|
0 |
|
|
|
62,871 |
|
|
|
0 |
|
|
|
62,871 |
|
|
|
0 |
|
|
|
53,371 |
|
Proceeds from subscriptions payable
|
|
|
0 |
|
|
|
(27,804 |
) |
|
|
0 |
|
|
|
(27,804 |
) |
|
|
0 |
|
|
|
(27,804 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by Financing Activities
|
|
$ |
0 |
|
|
$ |
25,567 |
|
|
$ |
0 |
|
|
$ |
25,567 |
|
|
$ |
0 |
|
|
$ |
25,567 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET DECREASE IN CASH
|
|
$ |
(837 |
) |
|
$ |
(19,687 |
) |
|
$ |
1,250 |
|
|
$ |
7,962 |
|
|
$ |
896 |
|
|
$ |
890 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH, BEGINNING OF PERIOD
|
|
|
1,600 |
|
|
|
3,957 |
|
|
|
1,600 |
|
|
|
3,957 |
|
|
|
1,600 |
|
|
|
3,957 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH, END OF PERIOD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
763 |
|
|
$ |
(15,730 |
) |
|
$ |
2,850 |
|
|
$ |
11,919 |
|
|
$ |
2,496 |
|
|
$ |
4,847 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
"The accompanying notes are an integral part of these consolidated financial statements."
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
|
|
Consolidated Statements of Cash Flows (Continued)
|
|
For the Nine, Six, and Three Months Ended,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/2006
|
|
|
9/30/2005
|
|
|
6/30/2006
|
|
|
6/30/2005
|
|
|
3/31/2006
|
|
|
3/31/2005
|
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FLOW INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Income taxes paid
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CASH ACTIVITIES
|
|
|
|
|
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|
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Common stock issued in conversion
|
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|
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|
|
|
|
|
|
|
|
|
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|
|
|
|
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|
|
of debts and interest
|
|
$ |
0 |
|
|
$ |
32,179 |
|
|
$ |
0 |
|
|
$ |
32,179 |
|
|
$ |
0 |
|
|
$ |
32,179 |
|
Common stock issued for services
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Common Stock Issued on debt conversions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
Common stock issued for subscriptions
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Common stock issued for settlements
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
"The accompanying notes are an integral part of these consolidated financial statements."
|
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|
NOTE 1 -COMPANY BACKGROUND
The consolidated financial statements include those of Broadleaf Capital Partners, Inc., a Nevada company, (Broadleaf), and its wholly owned subsidiaries, Peacock Real Estate Development Corporation (PREDC), Peacock International Corporation (PIC), DotCom Ventures, LLC (DotCom), Peacock Sports, Inc. (PSI), Broadleaf Asset Management (BAM), Broadleaf Financial Services (BFS), Silverleaf Venture Fund, LLC (SVF) and Brand Asset Management (Brand). The consolidated financial statements also include its majority-owned
subsidiaries, Bay Area Soccer Development Corporation (Bay Area) (70%), Orange County Soccer Development Corporation (Orange) (70%), Riverside County Soccer Development Corporation (Riverside) (53%), and iNetPartners, Inc. (iNet) (51%). Collectively, they are referred to herein as "the Company".
PREDC, a wholly-owned subsidiary, was originally formed on July 29, 1993. On October 22, 1999, the name was changed from Peacock Financial Corporation (California) to Peacock Real Estate Development Corporation. PREDC has had no significant operations since inception.
PIC, a wholly-owned subsidiary, was formed on December 8, 1997. It has had no operations to date, but was formed to invest and trade in securities on an international basis.
DotCom was organized on July 23, 1999. Peacock acquired its initial 50% ownership with an initial investment of $112,203. On January 5, 2000, the Company acquired the remaining 50% ownership by granting options to acquire a total of 500,000 restricted common shares of the Company at $0.10 per share. DotCom was organized for the purposes of conducting an internet production company and to consult start-up and emerging growth companies with their internet strategies. DotCom had no operations since 2003.
PSI was incorporated in January 2000 to hold and manage investments in professional sports. During the years ended December 31, 2003, 2002, and 2001, PSI had no significant operations.
In January 2000, the Company acquired an 85% ownership interest for $50,000 cash in Orange County Soccer Development Corporation (Orange). The investment was recorded as a purchase. Orange discontinued operations effective December 31, 2000.
In February 2000, the Company acquired an 85% ownership interest for $100,000 cash in Bay Area Soccer Development Corporation (Bay Area). The investment was recorded as a purchase. Effective December 31, 2000, Bay Area discontinued its operations.
In February 2000, the Company acquired a 53% ownership interest in Riverside County Soccer Development Corporation (Riverside) for $6,000. The investment was recorded as a purchase. Effective December 31, 2000, Riverside discontinued its operations.
Broadleaf holds a 51% interest in iNet as of December 31, 2001. iNet was organized under the laws of the State of California on December 15, 1999 with the intent to develop Internet e-commerce applications for both the new and used automotive markets. Effective December 31, 2000, iNet had no significant operations.
On May 23, 2002 Storage Suites America was formed as a wholly owned subsidiary to take advantage of the growing self storage trend. During 2002 it was decided Broadleaf could not provide the capital and management support needed by Storage Suites America to implement their business plan. During March 2003 the Storage Suites America entity was sold by Broadleaf.
Silverleaf Venture Fund, LLC was formed on July 29, 2003 as a wholly owned subsidiary. The company had a limited history and briefly acquired shares in small micro cap companies during 2003 and 2004. However, due the lack of liquidity and markets available willing to buy these investments, they were written down to zero market value based on management recommendations and has had no significant operations since 2004.
Broadleaf’s remaining subsidiaries, BAM, BFS, and Brand, were all incorporated in 2001. These subsidiaries have had no operations to date, and management is currently evaluating its alternatives for these companies.
NOTE 1 - COMPANY BACKGROUND (Continued)
On September 15, 1998, the Company filed with the Securities and Exchange Commission to become a Business Development Corporation as defined under the Investment Act of 1940. Simultaneously, the Company registered an offering circular with the SEC for 13,000,000 shares of common stock under Regulation E of the Investment Act to raise capital and to make investments in real estate and in eligible portfolio companies. The Company participates in the formation of, and invests in, emerging
or early-stage companies in various fields of business by arranging for and contributing capital and providing management assistance. During 2004 the Company had failed to comply with Business Development Company requirements while trying to maintain business operations and the Business Development License has been rescinded by the SEC.
From December 2000 through 2006 the Company did not have a permanent President but was run by interim President Robert A. Braner who was also Chairman of the Board during the same time. The Company has since hired a permanent President and restored its normal management structure.
The Company currently continues operations of its active holdings, all in the parent Company structure and not its subsidiaries which are currently inactive and being held for future ventures. Also, the Company is actively looking for opportunities to utilize its tax assets.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation.
Broadleaf Capital Partners, Inc. (the Company) is a closed-end management investment company organized as a Nevada corporation. Although these types of company’s should prepare their financial statements in conformity with accounting principles generally accepted in the United States of America, and are subject to audit as are other investment companies, the statement presentation of some companies may need to be tailored to present the information in a manner most
meaningful to their particular group of investors. Since debt is a significant item, the Company concluded that a balance sheet would be more appropriate than a statement of net assets. Also, the Company believes Article 5 of Regulation S-X applies.
FASB Codification:
In June 2009, the FASB issued ASC 105, Generally Accepted Accounting Principles, (“Codification”) effective for interim and annual reporting periods ending after September 15, 2009. This statement establishes the Codification as the source of authoritative accounting principles used in the preparation of financial statements in conformity with generally accepted accounting principles. The Codification does not replace or affect guidance issued by the SEC or its staff. As a result of the Codification, the references to authoritative accounting pronouncements included herein in this Annual Report now refer to the Codification topic
section rather than a specific accounting rule as was past practice.
Principles of Consolidation:
The consolidated financial statements include those of Broadleaf Capital Partners, Inc., a Nevada corporation, and its wholly-owned subsidiaries, Peacock Real Estate Development Corporation (California) (PREDC), Peacock International Corporation (Bahamas) (PIC), DotCom Ventures, LLC (DotCom), Peacock Sports, Inc. (PSI), Silverleaf Venture Fund. LLC (SVF), Broadleaf Asset Management (BAM), Broadleaf Financial Services (BFS), and Brand Asset
Management (Brand). They also include the majority owned subsidiaries, Bay Area Soccer Development Corporation (Bay Area) (80%), Orange County Soccer Development Corporation (Orange) (85%), Riverside County Soccer Development Corporation (Riverside) (53%), and iNet Partners, Inc. (iNet) (51%). All significant intercompany accounts and transactions have been eliminated.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of Estimates:
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.
Risk and Uncertainties:
Our future results of operations and financial condition will be impacted by the following factors, among others: our lack of capital resources, dependence on third-party management to operate the companies in which we invest and dependence on the successful development and marketing of any new products in new and existing markets. Generally, we are unable to predict the future status of these areas of risk and uncertainty. However, negative trends or conditions in these areas could have an adverse affect on our business.
Cash and Cash Equivalents:
For financial statement presentation purposes, short-term, highly liquid investments with original maturities of three months or less are considered to be cash equivalents. The Company maintains its cash accounts at all times at levels that do not exceed the insurable FDIC limit, but management believes that there is little risk of loss.
Fair Value of Financial Instruments:
In September 2006, the Financial Accounting Standards Board (FASB) introduced a framework for
measuring fair value and expanded required disclosure about fair value measurements of assets and liabilities. The Company adopted the standard for those financial assets and liabilities as of the beginning of the 2008 fiscal year and the impact of adoption was not significant. FASB Accounting Standards Codification (ASC) 820 “ Fair Value Measurements and Disclosures ” (ASC 820) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date ASC 820 also establishes a fair value hierarchy that distinguishes between
(1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
●
|
Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
|
●
|
Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability; either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g. interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
|
●
|
Level 3—Inputs that are both significant to the fair value measurement and unobservable.
|
The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include investments in available-for-sale securities and accounts payable and accrued expenses. The Company has also applied ASC 820 for all non-financial assets and liabilities measured at fair value on a non-recurring basis. The adoption of ASC 820 for non-financial assets and liabilities did not have a significant impact on the Company’s financial statements.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Investments:
The Company's loans, net of participations and any unearned discount, are considered investments under the 1940 Act and are recorded at fair value. Since no ready market exists for these loans, the fair value is determined in good faith by the Board of Directors. In determining the fair value, the Company and Board of Directors consider factors such as the financial condition of the borrower, the adequacy of the collateral and individual credit risks.
Investments in equity securities are recorded at fair value, represented as cost, plus or minus unrealized appreciation or depreciation, respectively. The carrying values of investments that have no readily-determinable market values are determined by the Board of Directors, based upon its analysis of the assets and revenues of the underlying invested companies.
Because of the inherent uncertainty of valuations, the Board of Directors' estimates of the values of the investments may differ significantly from the values that would have been used had a ready market for the investments existed and the differences could be material.
Comprehensive Income:
ASC Topic 220 (SFAS No. 130) establishes standards for reporting comprehensive income and its components. Comprehensive income is defined as the change in equity during a period from transactions and other events from non-owner sources. Per the consolidated financial statements, the Company has purchased available-for-sale securities that are subject to this reporting.
Other-Than-Temporary Impairment:
All of our non-marketable and other investments are subject to a periodic impairment review. Investments are considered to be impaired when a decline in fair value is judged to be other-than-temporary. The indicators that we use to identify those events and circumstances include:
|
· the investee’s revenue and earnings trends relative to predefined milestones and overall business prospects;
|
|
· When events or changes in circumstances indicate that long-lived assets other than goodwill may be impaired, an evaluation is performed to determine if a write-down to fair value is required. When an asset is classified as held for sale, the asset's book value is evaluated and adjusted to the lower of its carrying amount or fair value less cost to sell. In addition, depreciation and amortization ceases while it is classified as held for sale.
|
|
· the general market conditions in the investee’s industry or geographic area, including regulatory or economic changes;
|
|
· factors related to the investee’s ability to remain in business, such as the investee’s liquidity, debt ratios, and the rate at which the investee is using its cash; and
|
|
· the investee’s receipt of additional funding at a lower valuation. If an investee obtains additional funding at a valuation lower than our carrying amount or a new round of equity funding is required for the investee to remain in business, and the new round of equity does not appear imminent, it is presumed that the investment is other than temporarily impaired, unless specific facts and circumstances indicate otherwise.
|
Recently Issued Accounting Pronouncements:
In May 2009, the FASB issued SFAS No. 165, Subsequent Events (“SFAS 165” or ASC 855). SFAS 165 (ASC 855) establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165 (ASC 855) sets forth (1) The period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (2) The circumstances
nder which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and (3) The disclosures that an entity should make about events or transactions that occurred after the balance sheet date. SFAS 165 (ASC 855) was effective for interim or annual financial periods ending after June 15, 2009.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162 (“SFAS 168” or ASC 105-10). The FASB Accounting Standards Codification (“Codification”) will be the single source of authoritative
Non-governmental U.S. generally accepted accounting principles. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. SFAS 168 (ASC 105-10) was effective for interim and annual periods ending after September 15, 2009. All existing accounting standards are superseded as described in SFAS 168. All other accounting literature not included in the Codification is non-authoritative. Existing GAAP was not intended to be changed as a result of the Codification, and accordingly the change did not impact our financial statements. The ASC does change the way the guidance is organized
and presented.
In October 2009, the FASB issued Accounting Standard Update (“ASU”) No. 2009-13, Multiple-Deliverable Revenue Arrangements (“ASU 2009-13. This standard updates FASB ASC 605, Revenue Recognition (“ASC 605”). The amendments to ASC 605 requires entities to allocate revenue in an arrangement using estimated selling prices of the delivered goods and services based on a selling price hierarchy. These amendments to ASC 605 should be applied on a prospective basis for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, with
early adoption permitted. The Company adopted these amendments on January 1, 2010. Management does not believe that the adoption of this standard will have any impact on the Company’s financial statements.
In January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and Disclosures (“ASU 2010-06”). This standard updates FASB ASC 820, Fair Value Measurements (“ASC 820”). ASU 2010-06 requires additional disclosures about fair value measurements including transfers in and out of Levels 1 and 2 and separate disclosures about purchases, sales, issuances, and settlements relating to Level 3 measurements. It also clarifies existing fair value disclosures about the level of desegregations and about inputs and valuation techniques used to measure fair value. The
standard is effective for interim and annual reporting periods beginning after December 15, 2009 except for the disclosures about purchases, sales, issuances and settlements which is effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years. The Company adopted ASU 2010-06 on January 1, 2010, which had no material impact on the financial statements. Other recent accounting pronouncements issued by the FASB (including its EITF), the AICPA, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future financial statements.
Revenue and Cost Recognition:
The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. The Company also receives shares in certain companies for providing capital and investment services. Therefore when this type of income is
recognized, the Company records it as management consulting income based on the fair value of the shares received.
Fixed Assets:
Fixed assets are recorded at cost. Major additions and improvement are capitalized. The cost and related accumulated depreciation of equipment retired or sold are removed from the accounts and any differences between the undepreciated amount and the proceeds from the sale are recorded as gain or loss on sale of assets. Depreciation is computed using the straight-line method over the estimated useful life of the assets as follows:
Description Estimated Useful Life
Furniture and fixtures 5 to 7 years
Computers and software 5 years
Automobiles 5 years
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Most of the fixed assets of the company have been retired during the 2005 fiscal year and, the related costs and accumulated depreciation have been removed from the accounts and any gain or loss was recognized during that period.
Reclassifications:
Certain reclassifications have been made to prior year balances to conform to the current year presentation.
Net Income (Loss) Per Share:
In addition to Net Asset Values the Company reports basic and diluted earnings per share (EPS) according to the provisions of ASC Topic 260, which requires the presentation of basic EPS and, for companies with complex capital structures, diluted EPS. Basic EPS excludes dilution and is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income (loss) available to common stockholders, adjusted by other changes in income or loss that would result from the assumed conversion of those potential common shares, by the weighted number of common shares and common share equivalents
(unless their effect is antidilutive) outstanding. Common stock equivalents are not included in the computation of diluted earnings per share when the Company reports a loss because to do so would be antidilutive. Thus, these equivalents are not included in the calculation of diluted loss per share, resulting in basic and diluted loss per share being equal. The following is a reconciliation of the computation for basic and diluted EPS for the quarters ended September 30, 2006 through March 31, 2006:
|
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|
|
|
|
|
|
|
|
|
|
9/30/2006
|
|
|
6/30/2006
|
|
|
3/31/2006
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
|
$ |
(20,229 |
) |
|
$ |
(11,678 |
) |
|
$ |
(5,568 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common stock
|
|
|
140,473,605 |
|
|
|
140,473,605 |
|
|
|
140,473,605 |
|
Equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Warrants
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Convertible Notes
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Weighted-average common shares
|
|
|
|
|
|
|
|
|
|
|
|
|
outstanding- diluted
|
|
|
140,473,605 |
|
|
|
140,473,605 |
|
|
|
140,473,605 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Taxes:
The Company, a C-corporation, accounts for income taxes under ASC Topic 740 (SFAS No. 109) Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
The Company adopted the provisions of FASB ASC 740-10 “ Uncertainty in Income Taxes ” (ASC 740-10), on January 1, 2007. The Company has not recognized a liability as a result of the implementation of ASC 740-10. A reconciliation of the beginning and ending amount of unrecognized tax benefits has not been provided since there is no unrecognized benefit since the date of adoption. The Company has not recognized interest expense or penalties as a result of the implementation of ASC 740-10. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense
and penalties in operating expenses.
Currently the Company has projected $14,383,956 as of December 31, 2005 in Net Loss Operating Loss carryforwards available. The benefits of the potential tax savings will be recognized in the financial statements upon the acquisition or development of revenue source to apply against these losses. The company recognizes that the Internal Revenue Service has the final determination of the NOL available going forward and that amount may be significantly different from that recorded to date.
The net operating loss carry forwards for federal income tax purposes will expire between 2010 and 2019. Generally, these can be carried forward and applied against future taxable income at the tax rate applicable at that time. We are currently using a 35% effective tax rate for our projected available net operating loss carryforward. However, as a result of potential stock offerings and stock issuance in connection with potential acquisitions, as well as the possibility of the Company not realizing it’s business plan objectives and having future taxable income to offset, the Company’s use of these NOLs may be limited under the provisions of Section 382 of the Internal
Revenue Code of 1986, as amended. The Company is in the process of evaluating the implications of Section 382 on its ability to utilize some or all of its NOLs.
Components of Net Operating Loss and Valuation allowance are as follows:
|
|
|
|
|
|
|
|
|
|
Net deferred tax assets consist of the following components as of
|
|
|
|
|
|
|
|
|
|
|
|
9/30/2006
|
|
|
6/30/2006
|
|
|
3/31/2006
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
|
|
Beginning NOL Carryover
|
|
|
14,366,710 |
|
|
|
14,378,388 |
|
|
|
14,383,956 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Taxable Income
|
|
|
(20,229 |
) |
|
|
(11,678 |
) |
|
|
(5,568 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Valuation allowance
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending NOL Carryover
|
|
|
14,346,481 |
|
|
|
14,366,710 |
|
|
|
14,378,388 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax Benefit Carryforward
|
|
|
5,021,268 |
|
|
|
5,028,349 |
|
|
|
5,032,436 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Valuation allowance
|
|
|
(5,021,268 |
) |
|
|
(5,028,349 |
) |
|
|
(5,032,436 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net deferred tax asset
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Allowance
|
|
|
5,021,268 |
|
|
|
5,028,349 |
|
|
|
5,032,436 |
|
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
In accordance with FASB ASC 740 “Income Taxes”, valuation allowances are provided against deferred tax assets, if based on the weight of available evidence, some or all of the deferred tax assets may or will not be realized. The Company has evaluated its ability to realize some or all of the deferred tax assets on its balance sheet and has established a valuation allowance in the amount of $5,034,385 at December 31, 2005 and estimated changes to the valuation allowance by the projected profit of loss for each period included in these financial statements in the table above. The allowance is calculated for each period as equal to the full potential tax benefits of the any NOL tax carryforwards.
NOTE 3 - GOING CONCERN
As reported in the consolidated financial statements, the Company has an accumulated deficits of $15,774,442 as of September 31, 2006, $15,765,891 as of June 30, 2006, and $15,759,781 as of March 31, 2006. The Company also has certain debts that have been in default during these periods although the creditors have not pursued collection proceedings. The Company's stockholders' deficit at September 30, 2006 was $1,769,063, at June 30, 2006 was $1,760,512, at March 31, 2006 was $1,754,402 and its current liabilities exceeded its current assets by $1,931,218 on September 30, 2006 and by
$1,922,667 on June 30, 2006 and by $1,916,557, on March 31, 2006. These trends have been consistent right up through the most current 10K filed for the year ended December 31, 2010, respectively.
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 ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 4 - INVESTMENTS IN LIMITED PARTNERSHIPS
During 1995, the Company received a $975,000 loan that converted to a grant from the City of Riverside to acquire and rehabilitate a 120-unit apartment complex (see Note 9). During April 1996, the Company was awarded $2,400,000 in Federal tax credits relating to this project. During December 1996, the Company sold the completed project to a tax credit partnership named Canyon Shadows, L.P., retaining a 1% interest as general partner, and receiving a $905,000 capital account in the
partnership. During 1999, a $70,000 note held by the Company was transferred to Canyon Shadows, L.P., which was recorded as a capital distribution to the Company (see Note 9). Additional costs were incurred by the Company on behalf of the partnership resulting in a total investment in Canyon Shadows, L.P. of $1,131,961 at December 31, 2000. The Company's Board of Directors determined that the value of this investment approximated the current interest in the partnership.
The valuation was based upon projected future occupancy of the apartment unit. In 2002, Canyon Shadows distributed $101,422 to the Company, leaving a balance of $937,424 at December 31, 2002. During the year ended December 31, 2003, Canyon Shadows distributed an additional $134,176 to the Company, while the Company invested an additional $12,734 into the Investment.
NOTE 4 - INVESTMENTS IN LIMITED PARTNERSHIPS (Continued)
On May 26, 2003 the Company entered into a Memorandum of Understanding with an individual whereby the Company is to organize a subsidiary and sell a 21% interest in the subsidiary to the individual for $200,000. Immediately thereafter, the Company would transfer the control of the Canyon Shadows LP to the new subsidiary. Thereafter, the individual is to be entitled to 21% of the quarterly distributions from Canyon Shadows LP or $5,000 whichever is greater. As of December 31, 2004, the individual had their investment reclassified as a
note payable secured against the property with the same income provisions. The Company has been accruing payments to the individual totaling 21% of the Company's monthly distribution from the Canyon Shadows investment.
NOTE 5 - FIXED ASSETS
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Fixed assets consist of the following:
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For the Periods Ended,
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9/30/2006
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6/30/2006
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3/31/2006
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Furniture and fixtures
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$ |
0 |
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$ |
0 |
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$ |
0 |
|
Computers and software
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3,500 |
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3,500 |
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3,500 |
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Other equipment
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400 |
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|
400 |
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|
400 |
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3,900 |
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3,900 |
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3,900 |
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Accumulated depreciation
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3,900 |
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3,900 |
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3,900 |
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Current depreciation expense
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0 |
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0 |
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0 |
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3,900 |
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3,900 |
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3,900 |
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Net fixed assets
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$ |
0 |
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$ |
0 |
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$ |
0 |
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Most Fixed Assets were retired during the reduction of operations in 2005
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NOTE 6 - RELATED PARTY TRANSACTIONS
The Company is a partner in several limited partnerships (Note 4). The Company occasionally pays for operating expenses of the partnerships and is reimbursed as funds become available to the partnerships. The Company received a $30,000 loan from director Donna Steward in 2004 as stated in note 7. Additionally, the Company uses 500 square feet of office space from its Interim President rent free. There are no commitments attached to this space.
NOTE 7 – NOTES PAYABLE
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Notes payable consist of the following for the periods ended;
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9/30/2006
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6/30/2006
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3/31/2006
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12/31/2005
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Note payable at 5%, secured
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by an assignment of
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partnership cash, interest
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payable quarterly, principal due
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January 1, 2007, convertible to
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common stock. Resettled as part
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of the Peacock Note in 2008.
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$ |
500,000 |
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$ |
500,000 |
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$ |
500,000 |
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$ |
500,000 |
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Note payable at variable rate
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(18.0% at December 31, 2000)
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collateralized by deed of trust on
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real property. Lump sum payment
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was due May 21, 1999, currently
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in default. Both general partners since
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deceased. Note written off in 2006
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86,854 |
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86,854 |
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86,854 |
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86,854 |
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Note payable at 10%, secured by
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deed of trust, due March 31, 1996,
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currently in default. Developer of project
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investor since retired. Note written off in 2006
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65,000 |
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65,000 |
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65,000 |
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65,000 |
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Debentures at 10%, unsecured, were to be
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convertible into common shares at the
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option of the holder, all debentures
|
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were resettled as part of the Peacock note in 2008.
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139,583 |
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139,583 |
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139,583 |
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139,583 |
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Debentures at 10%, unsecured, were to be
|
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convertible into common shares at the
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option of the holder, all debentures
|
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are currently in default.
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10,383 |
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10,383 |
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10,383 |
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10,383 |
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Peacock Family Trust debentures issued during 2004
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with a stated interest rate of 10% per annum.
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all debentures were resettled as part of
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the Peacock note in 2008.
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125,000 |
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125,000 |
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125,000 |
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125,000 |
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Convertible note from a related party dated June 28,
|
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2004 with a stated rate of 10% per annum payable
|
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quarterly. The holder has the right to convert upon
|
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written request at 80% of market of the five
|
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|
previous trading days of the conversion request.
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30,000 |
|
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|
30,000 |
|
|
|
30,000 |
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|
30,000 |
|
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|
Convertible note payable, accrues with an
|
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|
|
interest at a Rate of 6.0% per annum,
|
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|
|
|
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|
|
|
|
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|
|
two-year term. Currently in default.
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
Convertible note payable, accrues with an
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
interest at a Rate of 6.0% per annum,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
two-year term. Currently in default.
|
|
|
42,988 |
|
|
|
42,988 |
|
|
|
42,988 |
|
|
|
42,988 |
|
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|
|