SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-KSB (Mark One) [X]Annual report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2003. [ ]Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to. Commission file number:2-91651-D BROADLEAF CAPITAL PARTNERS, INC. (Exact name of small business issuer as specified in its charter)
NEVADA 88-0490034 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.)
5440 W. SAHARA AVENUE, SUITE 202, LAS VEGAS, NEVADA 89146 (Address of principal executive office) (Zip Code) (702) 736-1560 (Issuer's telephone number) Securities registered under Section 12(b) of the Exchange Act: NONE Securities registered under Section 12(g) of the Exchange Act: COMMON STOCK, $.001 PAR VALUE Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation SB is not contained in this form and no disclosure will be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10- KSB or any amendment to this Form 10-KSB [ ]. 1 Issuer's revenues of its most recent fiscal year was $1,900. 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 March 31, 2004 was $0.01 based on the average bid and ask prices during February and March 2004. As of December 31, 2003, the number of outstanding shares of the issuer's common stock, $0.001 par value was 75,773,888 shares. DOCUMENTS INCORPORATED BY REFERENCE: NONE TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT: Yes [ ] No [x] 2 TABLE OF CONTENTS PART I ITEM 1. DESCRIPTION OF BUSINESS..............................................3 ITEM 2. DESCRIPTION OF PROPERTY..............................................6 ITEM 3. LEGAL PROCEEDINGS....................................................6 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..................6 PART II ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES.............6 ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS...............................................10 ITEM 7. FINANCIAL STATEMENTS................................................12 ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.........................12 ITEM 8A CONTROLS AND PROCEDURES..............................................12 PART III ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT..................13 ITEM 10. EXECUTIVE COMPENSATION.............................................14 ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS & MANAGEMENT AND RELATED STOCKHOLDER MATTERS............................15 ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.....................15 ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K...................................15 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES .............................16 SIGNATURES...................................................................17 INDEX TO EXHIBITS............................................................18 3 PART I ITEM 1. DESCRIPTION OF BUSINESS OVERVIEW Broadleaf Capital Partners, Inc., a Nevada corporation (the Company), incorporated February 1984, has continued with its restructuring and plans expansion through the ongoing development of its available operations, and other business opportunities. The Company is a publicly traded diversified investment holding company that makes direct investments in, and/or acquisitions of, private and undervalued public companies in a variety of different industries. In addition to the providing of management services, the Company may participate in the formation of, and invest in emerging or early- stage, small to medium size companies in various fields of business by arranging for and contributing capital. Potential ventures are evaluated based on the ability of the business to be viable and reach a significant milestone with the Company's initial investment, as well as possessing a potential to generate reasonable revenues through strong intellectual property rights and experienced management. BUSINESS STRATEGY The Company continually seeks and evaluates investment opportunities that have the potential of earning reasonable returns. The Company has in the past, and may again in the future, raise capital specifically for the purpose of permitting it to make an investment that the company believes is attractive. The Company's current investment focus is centered around six (6) core content areas; real estate, transportation, branded sports and health, media and communications, finance and energy fuels. The Company plans to invest in ventures with a operating history, is performing with the potential of a profit to the bottom line and, in some cases, has the need for identification and implementation of experienced management. Identifying and developing each new business opportunity may require the Company to dedicate certain amounts of financial resources, management attention, and personnel, with no assurance that these expenditures will be recouped. Similarly, the selection of companies and the determination of whether a company offers a viable business plan, an acceptable likelihood of success, and future profitability involves inherent risk and uncertainty. INVESTMENT HISTORY Riverside Park Apartments The Company formed a limited partnership in June 1992 and acquired two apartment buildings for $3,350,000 to be repaired, developed and managed. During the year ending 1992, the Company reduced its interest to 1% and has remained a general partner with a 1% interest. Canyon Shadows Apartments The Company acquired a 120-unit apartment complex in April 1995 for $875,000. The Company received a $975,000 loan that converts to a grant from the City of Riverside for the purpose of acquisition and rehabilitation and, in 1996, the Company was awarded $2,200,000 in Federal Tax Credits for the project. In December 1996, the project was sold to a tax credit partnership in which the Company retained a $905,000 capital account, as well as a 1% interest as a general partner for which it is entitled to receive a management fee and 75.9% of the project cash flow. Vir-Tek Vir-Tek is a minority disabled veteran engineering and contracting firm, formed to take advantage of recently passed federal legislation (H.R. 1568) requiring 3% participation on all programs and projects funded by federal dollars. Vir- Tek provides environmental management, facility and operations management, mapping and information management, engineering services, project management, and waste management. The company emphasizes teamwork in combination with innovation to design balanced solutions to complex environmental, industrial, and engineering problems. Vir-Tek has served commercial, industrial, and residential construction developers as well as concerns of city, county, and federal agencies. The Company has maintained a 49% equity interest in Vir-Tek under the terms of the contract. iNetPartners, Inc. Peacock Financial, the Company's former name holds a 51 percent interest in iNetPartners, Inc. The Company has recently signed a Letter of Intent with Daniels Advisory Group, which is expected to acquire the majority interest and will bring a new operating entity into iNetPartners. San Diego Soccer Development Corporation The Company currently owns approximately 350,000 shares of San Diego Soccer Development Corporation (SDSDC). SDSDC has begun a restructuring and had recently changed its name to Soccer Development of America. Bio-Friendly Corporation The Company invested $180,000 for 437,500 shares of common stock at 40 cents a share of Bio-Friendly Corporation, a fuel technology company. ITEM 2. DESCRIPTION OF PROPERTY The Company's principal executive and administrative offices are located at 5440 W. Sahara Avenue, Suite 202, Las Vegas, Nevada 89146, where the Company occupies approximately 150 square feet of leased office space. ITEM 3. LEGAL PROCEEDINGS The proceedings were pending in the Superior Court of the State of California, County of San Diego as Case Number 751034. The proceedings began in July, 2000. The Plaintiff was Steven Slagter. The case involved an action brought against PR Equities, with Peacock Financial Corporation, the Company's former name, as the General Partner. It involved the collection of approximately $900,000 on a promissory note. The court entered judgment in favor of Slagter on or about April 10, 2001 in the amount of $1,345,404.50. There have been numerous attempts to reach a compromise and settlement of the judgment by the Company. On September 18, 2003, the Board of Directors approved a settlement with Slagter as follows: $200,000 in the form of 20,000,000 shares valued at $.01 of the Company's Common Stock. The Company has the option to repurchase 10,000,000 shares from Mr. Slagter at a price of $.005 per share for a period of up to one year from the date of the executed Settlement Agreement. As part of the overall settlement, at Mr. Slagter's insistence as a part of the settlement, 9,435,680 shares valued at $0.025 of the Company's Common Stock has been issued to Robert Braner, CEO of the Company, in exchange for accrued and unpaid compensation as of June 30, 2003. The proceedings were pending in in District Court of Clark County, Nevada, as case No A415115. The Plaintiff was D. Garrett Martin. The case involves an unpaid Consulting agreement wherein a judgment was entered against the Company for $21,800. The Company entered into a satisfaction of judgment on October 7, 2003 in the amount of $6,000. The proceedings were pending in the Superior Court of the State of California, County of Riverside as Case No. RIC341872. The proceedings began on April 19, 2000. The Plaintiff is the City of San Jacinto. The proceedings involve the alleged delinquency of payments of the property and Mello Roos taxes on 105 parcels of real property owned by PR Equities, where Peacock Financial Corporation, the Company's former name, is the General Partner. The properties were encumbered with taxes and the Company determined the properties were not a viable investment and the properties were foreclosed on for the tax liability. The proceedings were pending in the Superior Court of the State of California, County of Riverside as Case No. RIC319951. The proceedings began on November 5, 1998. The Plaintiff was Bank of Hemet. This case involved a loan to PR Equities, with Peacock Financial Corporation, the Company's former name, as the General Partner. The loan went into default and an abstract of judgment had been filed for nearly $1,000,000. This case was settled for $100,000 to be paid over a period of eighteen months. In December 2001, the bank's position was purchased by the firm, Jaeger & Kodner, LLC, which settled in November 2002 for $280,000. The proceedings are pending in Superior Court of the State of California, County of Riverside as Case No. INC024172. The proceedings began on August 8, 2001. The Plaintiff is First Miracle Group. The case relates to an alleged loan in the amount of $100,000 in relation to Dotcom Ventures, LLC. Settlement negotiations are ongoing. The proceedings were pending in Superior Court of the State of California, County of Los Angeles, South District. The proceedings began on January 31, 2001. The Plaintiff is Helen Apostle. This case involved an action for approximately $90,000 involving an allegedly defaulted loan. The Company is involved in settlement negotiations and the case is currently unresolved. The proceedings are pending in Superior Court of the State of California, County of Riverside as Case No. RIC359405. The proceedings began in June 2001. The principal party is the Company. The Company instituted legal proceedings against former members of the management of Peacock Financial Corporation, the former name of the Company, and the former management of Dotcom Ventures, LLC. The case is currently pending and a trial date has not been set. One of these former members has brought a breach of contract cross complaint against the Company seeking $20,110. In a related proceeding pending in Superior Court of the State of California, County of Riverside as Case No. RIC382702, Steve Peacock instituted legal proceedings against the Company alleging breach of contract. The case is currently pending and a trial date has not been set. The proceedings were pending in the Supreme Court of the State of New York, County of New York as Case No. 602578/02. The proceedings began on July 18, 2002. The Plaintiff was 2 Bad Johns Records, Inc. The case involved a certain debenture in the amount of $50,000 permitting the conversion to Broadleaf Capital common stock. A dispute arose between Broadleaf and 2 Bad Johns regarding the conversion terms of the original debenture. The case was settled with Broadleaf issuing to 2 Bad Johns a debenture in the amount of $50,000 and delivering to Bondy & Schloss LLP, as escrow agent, 4,000,000 shares of its common stock. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Company did not submit any matters to a vote of its security holders during the fourth quarter of the fiscal year covered by this report. PART II ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES The common stock of the Company is quoted on the OTC Bulletin Board. The following table sets forth the range of high and low bid prices during each quarter for the years ended December 31, 2003 and December 31, 2002. The over- the- counter market quotations may reflect inter-dealer prices, without retail market-up, markdown or commission and may not represent actual transactions. The market information was obtained from Allstock.com (BigCharts) and from Standard & Poors Comstock. Low High Q 1- 2003 $ 0.00 $ 0.01 Q 2- 2003 0.01 0.02 Q 3- 2003 0.01 0.03 Q 4- 2003 0.00 0.01 Q 1- 2002 $ 0.06 $ 0.55 Q 2- 2002 0.04 0.25 Q 3- 2002 0.01 0.05 Q 4- 2002 0.00 0.02 RECORD HOLDERS There is only one class of common stock. As of December 31, 2003, there were approximately 3,500 shareholders of record for the Company's common stock and a total of 81,468,785 shares of common stock issued and outstanding. The holders of common stock are entitled to one vote per share of common stock on all matters to be vote on by the stockholders. There are no cumulative voting rights. Subject to preferences that may be applicable to any outstanding preferred stock, the holders of common stock are entitled to receive dividends, if any, as may be declared by the board of directors out of funds legally available for dividends. In the event of a liquidation, dissolution or winding up, the holders of common stock are entitled to share ratably in the net assets remaining after payment in full of all liabilities, subject to the prior rights of preferred stock, if any, then outstanding. There are no redemption or sinking fund provisions applicable to the common stock. DIVIDENDS The Company has never paid cash dividends on its common stock. The declaration and payment of dividends is within the discretion of the Company's board of directors and will depend, among other factors, on earnings and debt service requirements as well as the operating and financial condition of the Company. At the present time, the Company's anticipated working capital requirements are such that it intends to follow a policy of retaining earnings in order to finance the development of its business. Accordingly, the Company does not expect to pay a cash dividend within the foreseeable future. RECENT SALES OF UNREGISTERED SECURITIES The following is a description of unregistered securities sold by the Company within the last three years including the date sold, the title of the securities, the amount sold, the identity of the person who purchased the securities, the price or other consideration paid for the securities, and the section of the Securities Act of 1933 under which the sale was exempt from registration as well as the factual basis for claiming such exemption. On or about September 24. 2003, the Company issued 9,435,680 shares of its common stock to the Company's President and CEO, Robert A. Braner for accrued and unpaid compensation. This transaction is considered exempt from the registration requirements of the Securities Act of 1933 in reliance upon the exemptions at Section 4(2) and/or 4(6) of said Act. ITEM 6. MANAGEMENT'S 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 7 below. 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. Results of Operations Analysis of the calendar year ended December 31, 2003 compared to the calendar year ended December 31, 2002. For the calendar year ended December 31, 2003, revenues were approximately $1,900 compared to $10,226 for the calendar year ended December 31, 2002, a decrease of $8,326. The decrease was due to the concentration on the reduction of the debt rather than generating revenues. G&A expense decreased to $498,881 for the calendar year ended December 31, 2003 from $927,470 for the calendar year ended December 31, 2002, a decrease of $428,589. The decrease in G&A was due to the decrease in professional services and the cost of operating. Depreciation expense for the calendar year ended December 31, 2003 was $9,984 compared to $34,560 for the calendar year ended December 31, 2002, a decrease of $24,576. The decrease resulted from the method of depreciations. Interest expense for the calendar year ended December 31, 2003 was $217,140 compared to $353,069 for the calendar year ended December 31, 2002 a decrease of $135,929. The decrease is due to the debt reduction. Liquidity and Capital Resources On December 31, 2003 the Company had assets of $949,471 compared to $960,008 on December 31, 2002, a decrease of $10,537. The Company had a total stockholders' deficit of $2,040,548 on December 31, 2003 compared to $3,453,252 on December 31, 2002, a decrease of $1,412,704. On December 31, 2003 the Company had Property and Equipment (net of depreciation) of $10,038 compared to $20,022 on December 31, 2002, or an decrease of $9,984, which is a result of the disposition of equipment. Going Concern - The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount of liabilities that might result should the Company be unable to continue as a going concern. The Company's consolidated financial statements have been prepared on the assumption the Company will continue as a going concern. Management believes that current operations will continue to provide sufficient revenues to meet operating costs and expansion. Unclassified Balance Sheet - In accordance with the provisions of SFAS No. 53, the Company has elected to present an unclassified balance sheet. Loss Per Share - The Company adopted the provisions of Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share" that established standards for the computation, presentation and disclosure of earnings per share ("EPS"), replacing the presentation of Primary EPS with a presentation of Basic EPS. It also requires dual presentation of Basic EPS and Diluted EPS on the face of the income statement for entities with complex capital structures. ITEM 7. FINANCIAL STATEMENTS As used herein, the term "Company" refers to Broadleaf Capital Partners, Inc., a Nevada corporation, and its subsidiaries and predecessors unless otherwise indicated. Consolidated, audited, condensed financial statements including a balance sheet for the Company as of the year ended December 31, 2003 and audited statements of income, cash flows and changes in shareholders' equity up to the date of such balance sheet and the comparable period of the preceding year are attached hereto as Pages F-1 through F-11 and are incorporated herein by this reference. BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2003 AND 2002 CONTENTS Independent Auditors' Report............................................3 Consolidated Balance Sheets............................................4 Consolidated Schedules of Investments.......................................6 Consolidated Statements of Operations........................................8 Consolidated Statements of Stockholders' Equity (Deficit)........................................10 Consolidated Statements of Cash Flows............................................14 Notes to the Consolidated Financial Statements.......................................16 INDEPENDENT AUDITORS' REPORT Broadleaf Capital Partners, Inc. and Subsidiaries Board of Directors Las Vegas, Nevada We have audited the accompanying consolidated balance sheets of Broadleaf Capital Partners, Inc. and Subsidiaries as of December 31, 2003 and 2002, including the consolidated schedules of investments as of December 31, 2003 and 2002, and the related consolidated statements of operations, changes in stockholders' equity (deficit), and cash flows for the years ended December 31, 2003, 2002, and 2001. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. As discussed more fully in Note 4 and 6 to the financial statements, "investments" and "other investments" amounting to $922,374 (97% of net assets) at December 31, 2003 have been valued at fair value as determined by the Board of Directors. We have reviewed the procedures applied by the directors in valuing such securities and have inspected underlying documentation; while in the circumstances the procedures appear to be reasonable and the documentation appropriate, determination of fair values involves subjective judgment which is not susceptible to substantiation by auditing procedures. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Broadleaf Capital Partners, Inc. and Subsidiaries as of December 31, 2003 and 2002, and the consolidated results of their operations and their cash flows for the years ended December 31, 2003, 2002, and 2001 in conformity with accounting principles generally accepted in the United States of America. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has a significant deficit in working capital, has a deficit in stockholders' equity and has suffered recurring losses to date, which raises substantial doubt about its ability to continue as a going concern. Management's plans with regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. HJ & Associates, LLC Salt Lake City, Utah April 12, 2004 BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Consolidated Balance Sheets ASSETS ------------- December 31, -------------------- 2003 2002 --------- --------- CURRENT ASSETS Cash $ 3,075 $ 749 Accounts receivable - related, net (Note 8) 12,753 - Prepaid expenses - 367 --------- --------- Total Current Assets 15,828 1,116 --------- --------- FIXED ASSETS, NET (Notes 3 and 5) 10,038 20,022 --------- --------- OTHER ASSETS Investments in limited partnerships (Note 4) 815,983 937,424 Other investments (cost - $100,000) (Note 6) 106,391 - Other assets 890 890 Assets associated with discontinued operations 341 556 --------- --------- Total Other Assets 923,605 938,870 --------- --------- TOTAL ASSETS $ 949,471 $ 960,008 ========= =========
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Continued) LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) December 31, ------------------------ 2003 2002 --------- ------------ CURRENT LIABILITIES Accounts payable $ 516,169 $ 505,425 Accrued expenses - officers and directors 40,362 120,893 Accrued expenses 310,798 272,828 Accrued interest 307,130 275,999 Judgments payable (Note 9) 215,145 1,574,802 Notes payable - current portion (Note 7) 521,437 850,944 Liabilities associates with discontinued operations 353,978 312,369 ------------ ------------- Total Current Liabilities 2,265,019 3,913,260 ------------ ------------- LONG-TERM DEBT Notes payable - long term (Note 7) 525,000 500,000 ------------ ------------- Total Liabilities 2,790,019 4,413,260 ------------ ------------- COMMITMENTS AND CONTINGENCIES (Note 9) MINORITY INTEREST (NOTE 4) 200,000 - ------------ ------------- 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 authorized at $0.001 par value; 75,773,888 and 24,089,208 shares issued and outstanding, respectively 75,774 24,090 Additional paid-in capital 13,731,300 12,794,424 Subscriptions payable 10,000 - Expenses prepaid with common stock (3,000) - Accumulated deficit (15,859,775) (16,276,919) ------------ ------------- Total Stockholders' Equity (Deficit) (2,040,548) (3,453,252) ------------ ------------- TOTAL LIABILITIES, MINORITY INTERST, AND STOCKHOLDERS' EQUITY (DEFICIT) $ 949,471 $ 960,008 ============ ============= The accompanying notes are an integral part of these consolidated financial statements.
# BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Schedule of Investments December 31, 2003 Description of Shares Owned Fair Company Business (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 ============== =========== December 31, 2002 Number of Description of Shares Owned Fair Company Business (or %) Cost Value - ---------------- ----------------- ---------------- --------------- ------------ Canyon Shadows Real estate 1% $ 1,131,961 $ 937,424 (a) --------------- ------------ Total $ 1,131,961 $ 937,424 =============== ============
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Schedule of Investments (Continued) a) The Company's Investment Committee has valued this investment at cost, less cash distributions to the Company from Canyon Shadows. b) During the year ended December 31, 2003 the Company invested $25,000 in Nutek Oil, Inc. The Company's Investment Committee has determined the cash purchase price of the investment to be a fair valuation of the investment at December 31, 2003. c) During the year ended December 31, 2003, the Company entered into a Settlement Agreement with International Sports and Media Group, Inc. ("ISMG") whereby the Company settled ISMG's debt payable to the Company. As a part of this Settlement Agreement, the Company received 100,000 shares of ISMG's common stock, the market price of which was $0.10 per share on the date the Agreement was executed. The Company's Investment Committee has concluded that this is a fair means of valuing the investment at December 31, 2003. d) During the year ended December 31, 2003, the Company formed a wholly- owned subsidiary called Silverleaf Venture Fund, Ltd. ("Silverleaf"). Since inception, Silverleaf has acted as a holding company for some of the Company's investments. At December 31, 2003, the Company's Investment Committee determined that the most appropriate means of valuing the Company's investment in Silverleaf was at the total of Silverleaf's assets as of December 31, 2003. BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Consolidated Statements of Operations For the Year Ended December 31, ------------------------------------------ 2003 2002 2001 -------------- ------------ ------------ INVESTMENT REVENUE Management consulting fees $ - $ - $ - Property management and administrative income - - - Website development - - - Other income 1,900 10,226 15,125 -------------- ------------ ------------ Total Revenues 1,900 10,226 15,125 -------------- ------------ ------------ EXPENSES General and administrative 498,881 927,470 2,519,661 Bad debt expense - - 500,541 Depreciation 9,984 34,560 40,182 -------------- ------------ ------------ Total Expenses 508,865 962,030 3,060,384 -------------- ------------ ------------ NET INVESTMENT LOSS (506,965) (951,804) (3,045,259) -------------- ------------ ------------ OTHER INCOME (EXPENSE) Gain on forgiveness of debt 1,079,614 659,166 - Interest income - - 26,062 Interest expense (217,140) (353,069) (167,934) Other income 171,500 52,441 - Unrealized loss on investments (71,541) - (394,289 ) Gain on disposition of assets 3,500 (43,803) (43,324) -------------- ------------ ------------ Total Other Income (Expense) 965,933 314,735 (579,485) -------------- ------------ ------------ INCOME (LOSS) FROM CONTINUING OPERARION BEFORE INCOME TAXES AND DISCONTINUED OPERATIONS 458,968 (637,069) (3,624,744) Income taxes (Note 2) - - - -------------- ------------ ------------ INCOME (LOSS) FROM CONTINUING OPERATIONS 458,968 (637,069) (3,624,744) -------------- ------------ ------------ LOSS FROM DISCONTINUED OPERATIONS NET OF ZERO TAX EFFECT (Note 13) (41,824) (15,921) (30,342) -------------- ------------ ------------ NET INCOME (LOSS) $ 417,144 $ (652,990) $(3,655,086) ============== ============ ============
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Consolidated Statements of Operations (Continued) For the Year Ended December 31, ------------------------------------------ 2003 2002 2001 -------------- ------------ ------------ BASIC INCOME (LOSS) PER SHARE Continuing operations $ 0.01 $ (0.04) $ (2.76) Discontinued operations (0.00) (0.00) (0.02) -------------- ------------ ------------ Basic Income (Loss) Per Share $ 0.01 $ (0.04) $ (2.78) ============== ============ ============ WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 41,450,802 17,657,498 1,313,955 ============== ============ ============ For the Year Ended December 31, ------------------------------------------ 2003 2002 2001 -------------- ------------ ------------ DILUTED INCOME (LOSS) PER SHARE Continuing operations $ 0.01 $ (0.04) $ (2.76) Discontinued operations (0.00) (0.00) (0.02) -------------- ------------ ------------ Diluted Income (Loss) Per Share $ 0.01 $ (0.04) $ (2.78) ============== ============ ============ DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING $ 44,450,802 17,657,498 1,313,955 ============== ============ ============
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity (Deficit) (Continued) December 31, 2003 and 2002 Expenses Preferred Stock Common Stock Additional Prepaid With -------------------- ----------------- Paid-in Subscriptions Common Subscriptions Accumulated Shares Amount Shares Amount Capital Receivable Stock Payable Deficit ------- ------- --------- ------ ------------ ------------ ------------- ------------- ------------- Balance, December 31, 2000 545,300 $5,453 769,318 $ 769 $ 11,467,018 $ (286,056) $ - $ - $(11,968,843) Debentures converted to common stock - - 1,005,298 1,005 512,907 (4,000) - - - Common shares issued for cash - - 321,767 322 260,912 - - - - Common shares issued for subscriptions receivable - - 210,750 211 84,526 (84,737) - - - Cash received on subscriptions receivable - - - - - 27,455 - - - Preferred shares cancelled (20,000) (200) - - - - - - - Preferred shares converted to common shares on 1-for-1 basis (10,000) (100) 100 1 99 - - - - Common shares cancelled - - (3,725) (4) 4 - - - - ------- ------- --------- ------ ------------ ------------- ------------ ------------- ------------- Balance Forward 515,300 $ 5,153 2,303,508 $2,304 $ 12,325,466 $ (347,338) $ - $ - $(11,968,843) ------- ------- --------- ------ ------------ ------------- ------------ ------------- -------------
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity (Deficit) (Continued) December 31, 2003 and 2002 Expenses Preferred Stock Common Stock Additional Prepaid With -------------------- ------------------- Paid-in Subscriptions Common Subscriptions Accumulated Shares Amount Shares Amount Capital Receivable Stock Payable Deficit ------- ------- --------- -------- ------------ ------------ ------------- ------------- ------------- Balance Forward 515,300 $ 5,153 2,303,508 $ 2,304 $ 12,325,466 $ (347,338) $ - $ - $(11,968,843) Dividends accrued on preferred shares - - - - (22,479) - - - - Net loss for the year ended December 31, 2001 - - - - - - - (3,655,086) Balance, December 31, 2001 515,300 5,153 2,303,508 2,304 12,302,987 (347,338) - - (15,623,929) Cash received on subscription receivable - - - - - 10,068 - - - Common stock issued for cash and subscription receivable - - 11,169,091 11,169 134,989 (21,000) - - - Reduction of debt for stock subscription - - - - - 200,500 - - - Common stock issued for services - - 1,979,669 1,980 19,756 - - - - Common stock issued on conversion of debt - - 8,636,945 8,637 224,746 - - - - Accrued dividends - - - - (76,197) - - - - Beneficial conversion accrual on debentures - - - - 175,000 - - - - ------- ------- ---------- ------- ------------ ------------ ------------- ------------- ------------- Balance Forward 515,300 $ 5,153 24,089,213 $24,090 $ 12,781,281 $ (157,770) $ - $ - $(15,623,929) ------- ------- ---------- ------- ------------ ------------ ------------- ------------- -------------
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity (Deficit) (Continued) December 31, 2003 and 2002 Expenses Preferred Stock Common Stock Additional Prepaid With -------------------- ------------------- Paid-in Subscriptions Common Subscriptions Accumulated Shares Amount Shares Amount Capital Receivable Stock Payable Deficit ------- ------- --------- -------- ------------ ------------ ------------- ------------- ------------- Balance Forward 515,300 $ 5,153 24,089,213 $ 24,090 $ 12,781,281 $ (157,770) $ - $ - $(15,623,929) Fair market value of warrants - - - - 13,143 - - - - Allowance for uncollectible subscriptions - - - - - 157,770 - - - Net loss for the year ended December 31, 2002 - - - - - - - - (652,990) Balance, December 31, 2002 515,300 5,153 24,089,208 24,090 12,794,424 - - - (16,276,919) Common stock issued on conversion of debt - - 5,000,000 5,000 68,511 - - - - Common stock issued for services rendered - - 2,259,000 2,259 106,780 - - - - Common shares issued for services and prepaid services - - 6,000,000 6,000 56,000 - (56,000) - - Common stock issued as payment of debts - - 9,635,680 9,635 239,025 - - - - Common stock issued as settlement of debts - - 24,240,000 24,240 473,280 - - - - Common stock issued for subscriptions receivable - - 4,550,000 4,550 17,950 (22,500) - - - Dividend accrual - - - - (30,920) - - - - Beneficial conversion feature on convertible debt - - - - 6,250 - - - - Cash received on subscriptions receivable - - - - - 22,500 - - - Amortization of prepaid services - - - - - - 53,000 - - ------- ------- ---------- ------- ------------ ------------ ------------- ------------- ------------- Balance forward 515,300 $ 5,153 75,773,888 $ 75,774 $ 13,731,300 $ - $ (3,000) $ - $(16,276,919) ------- ------- ---------- ------- ------------ ------------ ------------- ------------- -------------
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity (Deficit) (Continued) December 31, 2003 and 2002 Expenses Preferred Stock Common Stock Additional Prepaid With -------------------- ------------------- Paid-in Subscriptions Common Subscriptions Accumulated Shares Amount Shares Amount Capital Receivable Stock Payable Deficit ------- ------- --------- -------- ------------ ------------ ------------- ------------- ------------ Balance forward 515,300 $ 5,153 75,773,888 $ 75,774 $ 13,731,300 $ - $ (3,000) $ - $(16,276,919) Cash received on subscriptions payable - - - - - - - 10,000 - Net income for the year ended December 31, 2003 - - - - - - - - 417,144 ------- ------- ---------- -------- ------------ ------------ ------------- ------------- ------------- Balance, December 31, 2003 515,300 $ 5,153 75,773,888 $ 75,774 $ 13,731,300 $ - $ (3,000) $ 10,000 $(15,859,775) ======= ======= ========== ======== ============ ============ ============= ============= =============
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows December 31, 2003 and 2002 For the Year Ended December 31, -------------------------------------------- 2003 2002 2001 --------------- ------------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) from continuing operations $ 417,144 $ (637,069) $(3,624,744) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation 9,984 34,560 40,182 Allowance for uncollectible subscription receivable - 157,769 - Beneficial conversion costs 6,250 175,000 - Warrants issued below market - 13,143 - Bad debt expense - - 500,541 Loss on disposal of assets - 43,802 43,324 Loss on investments, net 3,609 - 394,289 Gain on settlements of debts (1,141,497) (508,498) 2,083,300 Loss on settlements of debts 90,863 - - Amortization of prepaid expenses (equity) 53,000 - - Common stock issued for services 115,040 21,736 - Discontinued operations: Net loss 41,824 (15,921) (30,342) Depreciation - - 9,640 Changes in operating assets and liabilities: (Increase) decrease in accounts and notes receivable - 24,855 2,145 (Increase) decrease in other assets 367 (198) 5,146 Increase (decrease) in accounts payable 70,690 6,230 25,698 Increase (decrease) in other liabilities 111,364 214,414 256,976 Increase (decrease) in discontinued operation reserve - 15,921 (9,163) ---------------- ------------ ------------ Net Cash Used in Operating Activities (221,362) (454,256) (303,008) ---------------- ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES Funds received from investments 200,000 101,432 - Purchase of licensing rights - - - Purchase of investments (37,735) - (399,930) Receipts of investment disbursements 134,176 - - Increase in investments (85,000) - - Purchase of property and equipment - - - ---------------- ------------ ------------ Net Cash Provided (Used) in Investing Activities 211,441 101,432 (399,930) ---------------- ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES Repayment of notes payable (38,036) (10,417) - Proceeds from long-term borrowings 30,536 228,000 412,500 Proceeds from subscriptions payable 10,000 - - Distributions on notes receivable (79,228) - - Receipts of payments on notes receivable 66,475 Receipt of subscription receivable 22,500 10,068 27,455 ---------------- ------------ ------------ Net Cash Provided by Financing Activities $ 12,247 $ 352,809 $ 701,189 ================ ============ ============
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (Continued) December 31, 2003 and 2002 For the Year Ended December 31, -------------------------------------------- 2003 2002 2001 --------------- ------------- ------------ NET DECREASE IN CASH $ 2,326 $ (15) $ (1,749) CASH, BEGINNING OF YEAR 749 764 2,513 --------------- ------------- ------------ CASH, END OF YEAR $ 3,075 $ 749 $ 764 =============== ============= ============ SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Interest paid $ - $ - $ 472 Income taxes paid $ - $ - $ - SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES Common stock issued in conversion of debts and interest $ 819,696 $ 233,383 $ 509,912 Common stock issued for services $ 115,040 $ 21,736 $ - Common stock issued for subscriptions receivable $ 22,500 $ - $ - Common stock issued for prepaid services $ 56,000 $ - $ -
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements December 31, 2003 and 2002 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), 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. During the years ended December 31, 2003, 2002, and 2001, DotCom had no significant operations. 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 (Note 13). 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 (Note 13). 23 BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements December 31, 2003 and 2002 NOTE 1 - COMPANY BACKGROUND (Continued) 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 (Note 13). 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. Broadleaf's remaining subsidiaries, BAM, BFS, and Brand, were all incorporated in 2001. These subsidiaries have had no operations to date, but were formed with the intent to help forward the Company's business strategy. 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. NOTE 2 - GOING CONCERN As reported in the consolidated financial statements, the Company has an accumulated deficit of $15,859,775 and $16,276,919 as of December 31, 2003 and 2002, respectively. The Company also has certain debts that are in default at December 31, 2003. The Company's stockholders' deficit at December 31, 2003 and 2002 was $2,040,548 and $3,453,252, respectively, and its current liabilities exceeded its current assets by $2,249,191 and $3,912,144, 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. 23 BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements December 31, 2003 and 2002 NOTE 2 - GOING CONCERN (Continued) 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 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements follows: a. Accounting Method Broadleaf Capital Partners, Inc. (the Company) is a closed-end management investment company organized as a Nevada corporation. The Company has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended (the 1940 Act). Although business development companies 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. 23 BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements December 31, 2003 and 2002 NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) b. 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 c. Basic and Diluted Income (Loss) Per Share 2003 2002 2001 Income (loss) (numerator) $ 417,144 $ (652,990) $(3,655,086) Shares (denominator) 41,450,802 17,657,498 1,313,955 Per share amount $ 0.01 $ (0.04) $ (2.78) The computations of basic loss per share of common stock are based on the weighted average number of common shares outstanding during the period of the consolidated financial statements. Common stock equivalents, consisting of convertible debt and preferred shares, have not been included in the calculation as their effect is antidilutive for the periods presented. d. Recent Accounting Pronouncements During the year ended December 31, 2003, the Company adopted the following accounting pronouncements which had no impact on the consolidated financial statements or results of operations: SFAS No. 143, Accounting for Asset Retirement Obligations; SFAS No.145, Recision of FASB Statements 4, 44, and 64, amendment of Statement 13, and Technical Corrections; SFAS No. 146, Accounting for Exit or Disposal Activities; SFAS No. 147, Acquisitions of certain Financial Institutions; and SFAS No. 148, Accounting for Stock Based Compensation. SFAS No.149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities; SFAS No.150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity 23 BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements December 31, 2003 and 2002 NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) e. 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), 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. f. 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. g. Provision for Taxes Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Net deferred tax assets consist of the following components as of December 31, 2003 and 2002: December 31, 2003 2002 2001 Deferred tax assets: NOL Carryover $ 6,191,100 $ 6,316,700 $4,610,850 Related Party 129,330 - - Deferred tax liabilities: Related Party - (331,100) - Valuation allowance (6,320,430) (5,985,600) (4,610,850) Net deferred tax asset $ - $ - $ - 23 BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements December 31, 2003 and 2002 NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) g. Provision for Taxes (Continued) The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the years ended December 31, 2003, 2002, and 2001 due to the following: December 31, 2003 2002 2001 Book income (loss) $ 192,190 $ 225,625 1,334,853 Stock for services/options expense 3,705 (8,480) - Other - 18,295 (395,774) Judgments - (18,190) (747,282) Meals & Entertainment 4,900 - - Beneficial Conversion 2,440 - - Unrealized Gain/Loss 27,900 - - Related Parties - 8,650 (129,107) Valuation allowance (231,075) (225,900) (62,690) $ - $ - $ - At December 31, 2003, the Company had net operating loss carryforwards of approximately $15,874,000 that may be offset against future taxable income from the year 2003 through 2023. No tax benefit has been reported in the December 31, 2002 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years. h. Advertising The Company follows the policy of charging the costs of advertising to expense as incurred. i. Revenue Recognition The Company receives shares in certain companies for providing capital and investment services. The Company records management consulting income based on the fair value of the shares received. 23 BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements December 31, 2003 and 2002 NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) j. Investment Valuation 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 investee 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. k. Reclassifications Certain reclassifications have been made to prior year balances to conform with the current year presentation. l. Restricted Securities All investments in securities are restricted shares, and have been valued by the Board of Directors. In determining investment values, the Board considers many pertinent factors, including the results of operations of each company. 23 BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements December 31, 2003 and 2002 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. 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. After twenty-four months the individual has the option to sell her interest back to the Company for $200,000. As of December 31, 2003, the Company has not yet formed the subsidiary entity, but has been making cash payments to the individual totaling 21% of the Company's monthly distribution from the Canyon Shadows investment. 23 BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements December 31, 2003 and 2002 NOTE 5 - FIXED ASSETS Fixed assets consist of the following: For the Year Ended December 31, 2003 2002 2001 Furniture and fixtures $ 3,559 $ 3,559 $ 5,823 Computers and software 32,669 32,669 126,865 Other equipment 20,000 20,000 22,815 ------ ------ ------- 56,228 56,228 155,503 Accumulated depreciation (46,190) (36,236) (57,119) -------- -------- -------- Net fixed assets $ 10,038 $ 20,022 $ 98,384 ======== ======== ======== Depreciation expense for the years ended December 31, 2003, 2002, and 2001 was $9,984, $34,560, and $40,182 respectively. NOTE 6 - OTHER INVESTMENTS During the year ended December 31, 2003, the Company paid $25,000 for 100,000 shares of Nutek Oil, Inc. ("Nutek"). Nutek is a start-up oil and gas exploration entity. The Company has elected to value its investment in Nutek at cost. During the 2003 fiscal year the Company received 125,000 shares of Microsignal, Inc. from an unrelated entity that had defaulted on its loan to the Company. These Microsignal shares were transferred into the Company's wholly-owned subsidiary Silverleaf Venture Fund, Ltd. ("Silverleaf"). Silverleaf sold the shares at market value, and has subsequently purchased various stocks and short-term investments. The Company has elected to value its investment in Silverleaf at the aggregate market value of Silverleaf's investment account, which, at December 31, 2003, totaled $71,391. During 2003 the Company reached a Settlement Agreement with International Sports & Media Group, Inc. ("ISME") whereby the Company forgave all of ISME's debts payable to the Company in exchange for a cash payment of $125,000, 100,000 shares of ISME's common stock, and warrants to purchase an additional 100,000 shares of ISME's common stock at $1.00 per share. At the date this Settlement Agreement was executed, the market value of ISME's common stock was $0.10 per share. The Company has elected to value the investment in ISME at its market value on this date, making a total value of $10,000 at December 31, 2003. BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements December 31, 2003 and 2002 NOTE 7 - NOTES PAYABLE Notes payable consist of the following at December 31, 2003, 2002, and 2001: December 31, 2003 2002 2001 Note payable at 5%, secured by an assignment of partnership cash, interest payable quarterly, principal due January 1, 2007, convertible to common stock. $ 500,000 $ 500,000 $ 500,000 Note payable at variable rate (18.0% at December 31, 2000) collateralized by deed of trust on real property. Lump sum payment was due May 21, 1999, currently in default. 86,854 86,854 86,854 Note payable at 10%, secured by deed of trust, due March 31, 1996, currently in default. 65,000 65,000 65,000 Funds borrowed from a related entity - 28,000 - Debentures at 10%, unsecured, convertible into common shares at the option of the holder, all debentures are currently in default. 359,583 661,090 700,312 Convertible note payable, accrues interest at aRate of 6.0% per annum, two-year term. 25,000 - - Others 10,000 10,000 10,000 ----------- ----------- ----------- Total Notes Payable 1,046,437 1,350,944 1,362,166 Less: Current Portion (521,437) (850,944) (862,166) ----------- ----------- ----------- Long-Term Notes Payable $ 525,000 $ 500,000 $ 500,000 =========== =========== =========== BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements December 31, 2003 and 2002 NOTE 7 - NOTES PAYABLE (Continued) The aggregate principal maturities of notes payable are as follows: Year Ended December 31, Amount 2003 $ 521,437 2004 - 2005 525,000 2006 and thereafter - ------------ Total $ 1,046,437 ============ At December 31, 2003, the Company was in default on its two notes payable. The note holders have not taken any legal action against the Company as permitted by the agreements. Accrued interest on these notes totaled $23,950 as of December 31, 2003. NOTE 8- 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. NOTE 9 - COMMITMENTS AND CONTINGENCIES a. General Partner Obligations The Company serves as general partner in several real estate development partnerships. The Company may be held liable for certain liabilities, although because the amounts are minimal and the entities are limited liability companies, management does not feel that the potential liabilities will have a material impact on the Company. b. Housing Grant In April 1995, the Company acquired a 120-unit apartment complex using a $975,000 loan that was converted to a grant from the City of Riverside, California. The loan is non-recourse and is secured by a second trust deed on the property. If the Company meets certain requirements pertaining to the complex, which have been stipulated by the city, the loan will be forgiven in its entirety. As of December 31, 2003, management has complied with all of the requirements and believes that the repayment of $905,000 (the grant portion) of the $975,000 is highly remote. a.Stock Escrow and Security Agreement In October 2003, the Company entered into a Stock Escrow and Security Agreement with Angus Holdings, LLC ("Angus") whereby the Company borrowed $25,000 under the terms of a convertible promissory note. As an additional provision of the BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements December 31, 2003 and 2002 NOTE 9 - COMMITMENTS AND CONTINGENCIES (Continued) c. Stock Escrow and Security Agreement (Continued) agreement, the Company deposited 3,000,000 shares of its common stock into escrow, to be released to Angus should the Company default on the terms of its convertible note agreement. d. Litigation At December 31, 2003, the Company was party to certain legal proceedings, resulting in judgments payable totaling $2,083,300. The following is a summary of those payables: During the year, Bank of Hemet received a legal judgment against the Company totaling $932,006. In 2000, however, the Company had negotiated a settlement in this case for $100,000, and booked this amount as a contingent liability at December 31, 2000. In 2001, the Company defaulted on this settlement. As a result, during 2001, the Company recorded the full amount of the judgment, less payments made by the Company to Bank of Hemet. On November 20, 2002, the Company negotiated another settlement on this amount totaling $280,000, payable from proceeds from the Canyon Shadows investment. During 2002, the contingency was recorded at this amount plus interest imputed at an annual rate of 8%. At December 31, 2002, this liability is recorded at $269,535. In 2003, this liability was transferred to an unrelated entity by the name of Jeager and Kodner, LP. ("JK"). The Company negotiated a new settlement with JK whereby JK became entitled to the Company's cash receipts from its Canyon Shadows investment (less 21% - see Note 4), until JK is paid in full. As of December 31, 2003, the Bank of Hemet/JK liability totaled $168,794. In 2000, a non-related individual filed suit against the Company. Later that year, management negotiated a settlement with this individual totaling $250,000, and the amount was recorded as a contingent liability at December 31, 2000. In 2001 the Company defaulted on the settlement agreement. As a result, during 2001, the Company recorded the full amount of the alleged damages, less payments made by the Company to the individual. On May 21, 2002, the Company negotiated another settlement with this individual totaling $125,000 payable in cash payments and a convertible debenture. Subsequent to May 2002, the Company defaulted on this settlement agreement. As a result, in the current year, the Company recorded the full amount of the alleged damages, less payments made by the Company to the individual, plus interest imputed at an annual rate of 8%. At December 31, 2002, this liability was recorded at $1,238,785. During the year ended December 31, 2003, this amount was settled in full for 20,000,000 shares of the Company's common stock. In 2001, 1st Miracle Group, Inc. received a legal judgment against the Company totaling $100,000. Management was able to negotiate a settlement on this amount, totaling $20,000. At December 31, 2003, the liability is recorded at the settled amount, plus accrued interest imputed at 8% annually totaling $23,328. BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements December 31, 2003 and 2002 NOTE 9 - COMMITMENTS AND CONTINGENCIES (Continued) In 2001, AMG Consulting brought legal action against the Company, seeking damages of $21,012. During 2003, this amount was settled in full for $6,000 in cash. In 2002, a former employee received a legal judgment against the Company totaling $20,110. At December 31, 2003, this liability is recorded at the settled amount plus accrued interest imputed at 8% annually for a total liability of $23,021. NOTE 10 -PREFERRED STOCK The Company's preferred stock has the right to quarterly dividends to be paid at the annual rate of 6%. The quarterly dividend is to be paid to all shareholders of record, as of the last day of each quarter until such time as the Company causes such shares to be converted to common shares and "registered" (free trading) with the S.E.C. and the appropriate State regulatory agency. Each preferred share is convertible into one share of the common stock of the Company, such conversion to occur automatically and registered concurrently with any public offering of the common shares of the Company. NOTE 11 -SEGMENT INFORMATION At December 31, 2000, the Company operated in three separate and distinct business arenas: website development, business management consulting, and professional soccer franchise management. The Company discontinued its soccer operations in the 2000 fiscal year, and its other segments have been inactive through December 31, 2003. NOTE 12 -INVESTMENTS AND INVESTMENT VALUATION 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 in order to invest in real estate and eligible portfolio companies. This resulted in the Company becoming a specialized type of investment company. As required by ASR 118, the investment committee of the company is required to assign a fair value to all investments. To comply with Section 2(a)(41) of the Investment Company Act and Rule 2a-4 under the Investment Company Act, it is incumbent upon the board of directors to satisfy themselves that all appropriate factors relevant to the value of securities for which market quotations are not readily available have been considered and to determine the method of arriving at the fair value of each such security. To the extent considered necessary, the board may appoint persons to assist them in the determination of such value, and to make the actual calculations pursuant to the board's direction. The board must also, consistent with this responsibility, continuously review the appropriateness of the method used in valuing each issue of security in the company's portfolio. The directors must recognize their responsibilities in this matter and whenever technical assistance is requested from individuals who are not directors, the findings of such BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements December 31, 2003 and 2002 NOTE 12 -INVESTMENTS AND INVESTMENT VALUATION (Continued) intervals must be carefully reviewed by the directors in order to satisfy themselves that the resulting valuations are fair. No single standard for determining "fair value... in good faith" can be laid down, since fair value depends upon the circumstances of each individual case. As a general principle, the current "fair value" of an issue of securities being valued by the board of directors would appear to be the amount which the owner might reasonably expect to receive for them upon their current sale. Methods which are in accord with this principle may, for example, be based on a multiple of earnings, or a discount from market of a similar freely traded security, or yield to maturity with respect to debt issues, or combination of these and other methods. Some of the general factors which the directors should consider in determining a valuation method for an individual issue of securities include: 1) the fundamental analytical data relating to the investment, 2) the nature and duration of restrictions on disposition of the securities, and 3) an evaluation of the forces which influence the market in which these securities are purchased and sold. Among the more specific factors which are to be considered are: type of security, financial statements, cost at date of purchase, size of holding, discount from market value of unrestricted securities of the same class at time of purchase, special reports prepared by analysis, information as to any transactions or offers with respect to the security, existence of merger proposals or tender offers affecting the securities, price and extent of public trading in similar securities of the issuer or comparable companies, and other relevant matters. The investment valuation method adopted in 1982 provides for the Company's Board of Directors to be responsible for the valuation of the Company's investments (and all other assets). In the development of the Company's valuation methods, factors that affect the value of investees' securities, such as escrow provisions, trading volume and significant business changes are taken into account. These investments are carried at fair value using the following four basic methods of evaluation: a. Cost - The cost method is based on the original cost to the Company, adjusted for amortization of original issue discounts and accrued interest for certain capitalized expenditures of the corporation. Such method is to be applied in the early stages of an investee's development until significant positive or adverse events subsequent to the date of the original investment require a change to another method. b. Private market - The private market method uses actual or proposed third party transactions in the investee's securities as a basis for valuation, utilizing actual firm offers as well as historical transactions, provided that any offer used is seriously considered and well documented by the investee. c. Public market - The public market method is the preferred method of valuation when there is an established public market for the investee's securities. In determining whether the public market method is sufficiently established for valuation purposes, the corporation is directed to examine the trading volume, the number of shareholders and the number of market makers in the investee's securities, along with the trend in trading volume as compared to the Company's proportionate share of the investee's securities. If the security is restricted, the value is discounted at an appropriate rate. 23 BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements December 31, 2003 and 2002 NOTE 12 -INVESTMENTS AND INVESTMENT VALUATION (Continued) d. Appraisal - The appraisal method is used to value an investment position after analysis of the best available outside information where there is no established public or private market method which have restrictions as to their resale as denoted in the schedule of investments are also considered to be restricted securities. All portfolio securities valued by the cost, private market and appraisal methods are considered to be restricted as to their disposition. In addition, certain securities valued by the public market method which have restrictions as to their resale as denoted in the schedule of investments are also considered to be restricted securities. NOTE 13 - DISCONTINUED OPERATIONS Effective December 31, 2000, the Company discontinued the operations of the Bay Area, Orange and Riverside soccer subsidiaries. The following is a summary of the loss from discontinued operations resulting from the dissolution of these subsidiaries. The Company has established a reserve for discontinued operations of $311,813 and $295,892 at December 31, 2003 and 2002, respectively, which consists of net liabilities in excess of recoverable assets. No tax benefit has been attributed to the discontinued operations. December 31, 2003 2002 2001 REVENUES $ - $ - $ 648 ---------- ---------- ----------- OPERATING EXPENSES General and administrative - 2,840 21,388 Depreciation and amortization 216 9,640 9,640 ---------- ---------- ----------- Total Operating Expenses 216 12,480 31,028 ---------- ---------- ----------- LOSS FROM OPERATIONS (216) (12,480) (30,380) ---------- ---------- ----------- OTHER INCOME (EXPENSE) Loss on disposal of assets - (3,441) - Interest income - - 72 Interest expense (41,608) - (34) ---------- ---------- ----------- Total Other Income (Expense) (41,608) (3,441) 38 ---------- ---------- ----------- LOSS FROM DISCONTINUED OPERATIONS $ (41,824) $ (15,921) $ (30,342) ========== ========== ============ BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements December 31, 2003 and 2002 NOTE 14 - STOCK OPTIONS AND WARRANTS During the year ended December 31, 2001, the Company granted two of its officers options to acquire an aggregate of 12,500 shares of the Company's common stock at a strike price equal to the trading price on the date of issuance. A summary of the status of options and warrants at December 31, 2003, 2002, and 2001 is as follows: 2003 2002 Weighted Weighted Shares Shares Exercise Exercise Shares Price Shares Price Outstanding, beginning of year 3,012,500 $ 0.94 3,012,500 $ 0.94 Granted - - - - Canceled - - - - Exercised - - - - ---------- ------ ---------- -------- Outstanding, end of year 3,012,500 $ 0.94 3,012,500 $ 0.94 ========== ===== ========== ========= Exercisable, end of year 3,012,500 $ 0.94 - $ - ========== ===== ========== ========= Weighted average fair value of options and warrants granted during the year $ 0.50 $ 0.50 ========== ========= 2001 Weighted Shares Exercise Shares Price Outstanding, beginning of year - $ - Granted 12,500 2.00 Canceled - - Exercised - - ---------- --------- Outstanding, end of year 12,500 ` $ 2.00 ========= ========== Exercisable, end of year - $ - ========= ========== Weighted average fair value of options and warrants granted during the year $ 2.00 ==========
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements December 31, 2003 and 2002 NOTE 15 - FINANCIAL HIGHLIGHTS The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated. Common Stock Year ended December 31, 2003 2002 2001 2000 Net asset value, beginning of period $ (0.20) $ (2.78) $ (2.59) $ 13.93 ----------- ---------- ----------- ---------- Income from investment operations: Net investment loss (0.01) (0.04) (2.48) (11.93) Net losses securities (realized and unrealized) (0.00) (0.00) (0.30) (2.04) ----------- ---------- ----------- ---------- Total from investment operations (0.01) (0.04) (2.78) (13.97) ----------- ---------- ----------- ---------- Other Increase (decrease) 0.16 2.62 2.59 (2.55) Less distributions from net investment income - - - - ----------- ---------- ----------- ---------- Net asset value, end of period $ (0.05) $ (0.20) $ (2.78) $ (2.59) =========== ========== =========== ========== Calculated using post-split weighted-average shares outstanding. NOTE 16 -SUBSEQUENT EVENTS Subsequent to December 31, 2003, the Company issued 5,000,000 shares of its previously unissued common stock to an unrelated individual, pursuant to a stock subscription payable agreement. In addition, the Company issued 2,692,308 shares of common stock to an unrelated individual upon conversion of a convertible debenture. In March 2004 the Company entered into a Settlement Agreement with Eric Rasmussen, whereby the Company issued 4,666,667 shares of common stock and agreed to pay an additional $25,000 in cash to Mr. Rasmussen in lieu of outstanding debts totaling $98,734. Further, the Company reached an Agreement with a former employee whereby it issued 500,000 shares of common stock and agreed to pay $2,500 per month in exchange for the full forgiveness of $18,098 in accrued wages payable to the individual. ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES In its two most recent fiscal years or any later interim period, the Company has had no disagreements with its certifying accountants on accounting and financial disclosures. ITEM 8A. CONTROLS AND PROCEDURES Within 90 days prior to the date of filing of this report, we carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer (who also effectively serves as the Chief Financial Officer), of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer concluded that our disclosure controls and procedures are effective for gathering, analyzing and disclosing the information we are required to disclose in the reports we file under the Securities Exchange Act of 1934, within the time periods specified in the SEC's rules and forms. There have been no significant changes in our internal controls or in other factors that could significantly affect internal controls subsequent to the date of this evaluation. PART III ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The following persons constitute all of the Company's Executive Officers and Directors: NAME AGE POSITION Robert A. Braner 64 President, CEO, Chairman of the Board of Director Melissa R. Blue 25 Chief Financial Officer, Corporate Secretary Donna Steward 62 Director Charles Snipes 82 Director Jason Sunstein 32 Director Christopher Houghton 48 Director Nigel Gordon-Stewart 43 Director The Company's Bylaws currently authorize up to 13 directors. Each director is elected for one year at the annual meeting of stockholders and serves until the next annual meeting or until a successor is duly elected and qualified. Executive officers serve at the discretion of our board of directors. There are no family relationships among any of the directors and executive officers. Robert A. Braner Mr. Braner has over thirty years experience in providing executive leadership to progressively minded growth companies and internationally known organizations. Mr Braner combines a diverse financial management, and creative leadership with solid international experience in the cross-cultural business process. He assumed the position of President and Chief Operating Officer of Automobili Lamborghini USA, Inc. in 1993 after assisting an Indonesian consortium in the purchase and funding of Automobili Lamborghini S.p.A. from Chrysler Corporation. Mr. Braner also served as a senior executive member of the international committee for long-term strategic planning, corporate funding, new product development and global positioning at Automobili Lamborghini S.p.A. Sant' Agata, Italy and Jakarta, Indonesia. Before joining Automobili Lamborghini, he also served as President and member of the board at Vector Aeromotive Corporation (NASDAQ). Melissa R. Blue In April 2003, Melissa R. Blue became Chief Financial Officer and Corporate Secretary of Broadleaf Capital Partners, Inc. She has previously worked for certified public accounting firms in Nevada and South Carolina. Melissa graduated with her Bachelor of Science in Accounting from Winthrop University. She is currently in the process of getting her Masters of Business Administration from the University of Phoenix. She also is a principle in an accounting firm in Las Vegas, Nevada. Donna M. Steward Donna M. Steward has over 37 years of experience in the banking industry in credit management and managing operations both domestic and international. Having worked in various management positions within that industry. She has maintained a long working relationship with her clients with that "extra attention" to achieve success. Ms. Steward has her own Mortgage Company since1995, consulting and negotiating with banks. Ms. Steward is a licensed real estate broker and insurance broker in the State of California. Ms Steward is very active in the local community and serves on several boards. Currently she is on the board of Storage Suites America (SSUA-OTC) as well as a number of privately held companies. Charles Snipes Born in Arizona, raised in Southern California, product of the local school system. Graduated from UCLA in Business and Accounting. Spent 5 years in the Navy during World War II. Involved in various business firms as employee, manager, and owner for 25 years. From 1973 to 1993, when he sold the business, President of an internal oil service company, with offices in 20 states and 16 foreign countries. Since 1993, he has been involved in various aspects of the self-storage business, as well as serving on several Boards in a consulting capacity. Jason Sunstein Jason Sunstein is currently working as Viper Networks, Inc.'s Vice President of Finance, Secretary and a Director since 2000. He is a seasoned business executive who previously held the position of Senior Vice President and Secretary of a publicly traded international real estate development, sales and management company where he was responsible for all aspects of corporate and real estate finance. During his 12 year tenure, Mr. Sunstein was instrumental in taking the company from roughly $1,000,000 in real estate assets to over $100,000,000. Mr. Sunstein attended San Diego State University where he majored in Finance. His previously experience was in the public securities market as a licensed securities broker. Christopher Houghton Christopher Houghton is a Project Director for IMPAC, a privately-held productivity improvement company. Mr. Houghton previously worked in executive management with News Limited, a newspaper publisher in Sydney, Australia. Nigel Gordon-Stewart Nigel is a creative marketing and sales professional with extensive brand handling and development experience specialising in niche marketing of high value products and creative services. He has held director level positions in powerful brand-name companies (e.g. McLaren International Limited, Automobili Lamborghini SpA, MG Sport & Racing Limited and the entertainment/artist management company, CAN International Limited) and is known for his strategic business conceptual thinking complimented by a strong appreciation of the market and the consumer. Nigel is currently managing director of Carry On Films Limited, a UK based film company (see www.carryonlondonfilm.com). CODE OF ETHICS. Effective January 1, 2004, the Board of Directors adopted a Code of Ethics for Senior Financial Officers. The Code of Ethics was adopted pursuant to the requirements of the Sarbanes-Oxley Act of 2002 and the rules and regulations of the Securities and Exchange Commission thereunder. A copy of the Code of Ethics will be made available upon request at no charge. Requests should be directed in writing to the Company at 5440 W. Sahara Avenue, Suite 202, Las Vegas, Nevada 89146. SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE The Company's President and Chief Executive Office, Robert A. Braner, failed to file a report on Form 4 covering the issuance to him by the Company of 9,435,680 shares of common stock on/or about September 24, 2003. The Company's Director, Donna Steward, failed to file a report on Form 5 covering the issuance to her by the Company for the year ended December 31, 2003. The Company's Director, Charles Snipes, failed to file a report on Form 5 covering the issuance to her by the Company for the year ended December 31, 2003. The Company's Director, Jason Sunstein, failed to file a report on Form 5 covering the issuance to her by the Company for the year ended December 31, 2003. The Company's Director, Christopher Houghton, failed to file a report on Form 5 covering the issuance to her by the Company for the year ended December 31, 2003. The Company's Director, Nigel Gordon-Stewart, failed to file a report on Form 5 covering the issuance to her by the Company for the year ended December 31, 2003. ITEM 10. EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE NAME AND PRINCIPAL POSITIONYEAR ANNUAL LONG TERM COMPENSATION COMPENSATION Robert A. Braner 2003 $ 250,000 9,435,680 shares of common stock (1) President/CEO Melissa R. Blue 2003 18,000 1,000,000 shares of common stock (2) CFO/Corporate Secretary (1) On or about September 24, 2003, the Company issued these shares to Mr. Braner in lieu of compensation accrued and unpaid as of June 30, 2003. (2) On or about September 10, 2003, the Company issued these shares to Miss Blue as a part of her compensation. ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS & MANAGEMENT AND RELATED STOCKHOLDER MATTERS. The following table sets forth, as of March 30, 2004, the number and percentage of outstanding shares of common stock which, according to the information supplied to us, were beneficially owned by (i) each current director, (ii) each current executive officer, (iii) all current directors and executive officers as a group, and (iv) each person who, to our knowledge, is the beneficial owner of more than 5% of our outstanding common stock. Except as otherwise indicated, the persons named in the table below have sole voting and dispositive power with respect to all shares beneficially owned, subject to community property laws (where applicable). TITLE OF CLASS NAME AND ADDRESS OF AMOUNT OF PERCENT OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS Common Stock Robert A. Braner 10,303,680 9.00% 5440 W. Sahara Ave. Ste. 202 Las Vegas, NV 89146 Common Stock Melissa R. Blue 1,000,000 * 5440 W. Sahara Ave. Ste 202 Las Vegas, NV 89146 Common Stock Donna Steward 550,000 * 5440 W. Sahara Ave. Ste 202 Las Vegas, NV 89146 Common Stock Charles Snipes 50,000 * 5440 W. Sahara Ave. Ste 202 Las Vegas, NV 89146 Common Stock Jason Sunstein 50,000 * 5440 W. Sahara Ave. Ste 202 Las Vegas, NV 89142 Common Stock Christopher Houghton 50,000 * 5440 W. Sahara Ave. Ste 202 Las Vegas, NV 89142 Common Stock Nigel Gordon-Stewart 50,000 * 5440 W. Sahara Ave. Ste 202 Las Vegas, NV 89142 Common Stock (all officers and 12,053,680 11.00% directors as a group-7 persons) * Less than one percent ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS There were no reportable transactions during the period covered by this report. ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K (a) Exhibits Exhibits required to be attached by Item 601 of Regulation S-B are listed in the Index to Exhibits and are incorporated herein by this reference. (b) Reports on Form 8-K. The following reports on Form 8-K were filed during the period covered by this Form 10-KSB: May 21, 2003 Item 5. Other Events and Required FD Disclosure September 25, 2003Item 5. Other Events and Required FD Disclosure November 19, 2003 Item 5. Other Events and Required FD Disclosure; Item 6. Resignations of Registrant's Directors ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES HJ and Associates, LLC was engaged as the independent certified public accountants to audit the consolidated financial statements of the Company and its subsidiaries for the 2003 fiscal year. The aggregate fees billed to Broadleaf Capital Partners, Inc. by HJ and Associates, LLC. for fiscal years 2003 and 2002 are $38,425 and $44,142 respectively. PART F/S INDEX TO FINANCIAL STATEMENTS Auditor's Report............................................................ F-2 Balance Sheets as of December 31, 2003 and 2002............................. F-3 Statement of Operations for the years ended December 31, 2003, 2002 and 2001.................................................................... F-4 Statement of Changes in Stockholder's Equity for the years ended December 31, 2003 and 2002............................................................... F-5 Statement of Cash Flows for the years ended December 31, 2003, 2002 and 2001 F-6 Notes to Financial Statements............................................... F-7 INDEX TO EXHIBITS EXHIBIT NO. DESCRIPTION ARTICLES OF INCORPORATION AND BY-LAWS 3(i) * Articles of Incorporation as amended 3(vi) * Bylaws CERTIFICATIONS 31.1 Rule 15d-14(a) certifications 31.2 Rule 15d-14(a) certifications 32.1 Section 1350 certifications 32.2 Section 1350 certifications * Incorporated herein by reference from filings previously made by the Company SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, hereunto duly authorized, this 14 day of April, 2004. Broadleaf Capital Partners, Inc. /s/ Robert A. Braner ---------------------------- President, CEO and Director In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Robert A. Braner President; CEO, Director; April 14, 2004 - --------------------- Robert A. Braner /s/ Melissa R. Blue CFO; Secretary April 14, 2004 - -------------------- Melissa R. Blue /s/Donna Steward Director April 14, 2004 - ----------------- Donna Steward /s/ Charles Snipes Director April 14, 2004 - ------------------- Charles Snipes /s/ Jason Sunstein Director April 14, 2004 - ------------------- Jason Sunstein /s/ Christopher Houghton Director April 14, 2004 - ------------------------- Christopher Houghton /s/ Nigel-Gordon-Stewart Director April 14, 2004 - ------------------------- Nigel Gordon-Stewart