U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the year ended December 31, 2003
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File No: 0-21847
BOULDER CAPITAL OPPORTUNITIES II, INC.
--------------------------------------
(Name of small business in its charter)
Colorado 84-1356898
--------------------------- -------------
(State or other jurisdiction (IRS Employer
of Incorporation) Identification No.)
P.O. Box 890261
Temecula, California 92589
-------------------------------------- --------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (909)693-2285
Securities to be registered under Section 12(b) of the Act: None
Securities to be registered under Section 12(g) of the Act:
Common Stock, no par value
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes [ ] No [X]
Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of 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. [X]
State issuer's revenue for its most recent fiscal year: $-0-
State the aggregate market value of the voting stock held by nonaffiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days: $ 0.
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 2,230,200 as of October 1, 2004.
References in this document to "us," "we," "our," or "the Company" refer to
Boulder Capital Opportunities II, Inc. its predecessors and its subsidiaries.
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
GENERAL
We were incorporated under the laws of the State of Colorado on August 8,
1996. As of the date of this report on Form 10-KSB, we are still in the
development stage. To date our only activities have been organizational ones,
directed at developing our business plan and raising our initial capital. While
we have no current operations, we are in the oil and gas business. We have no
full-time employees and own no real estate.
On December 17, 1997, control of us passed to Michael Delaney, who paid
cash consideration of $11,359 for a total of 627,965 common shares, which was a
total of approximately 61% of our shares. Mr. Delaney was also named our
President, Secretary, and sole Director at that time, and the former Officer and
Director resigned.
PROPOSED OPERATIONS
Our business plan is to develop oil and gas wells for our own account and
for potential clients. We have investigated certain possibilities but have
drilled no oil or gas wells. At the present time, there are no active
negotiations being carried on regarding the acquisition of properties and the
drilling of oil or gas wells. Within the next twelve months, we plan to limit
our activities to the Western United States. We may also look to option leases,
which we would hold for resale to third parties.
Potential leases may be received from individuals or companies by
assignment under an agreement to develop or sell such leases on behalf of such
persons. We plan in the future to act as a broker for lease situations involving
third parties. No leases or clients have been identified at this time. It is
also our intention to develop oil and gas lease projects in which we can act
either as the drilling operator for an investor group or as a broker of leases
for a lessor.
When acting for our own account, we will acquire interests in various lease
tracts located in areas where we plan to explore for oil or gas. At the present
time, none of the specific tracts have been identified by us. However, the
tracts are expected to fit into an overall profile.
The tracts will be entirely within a specific, defined geographical area,
will be exploratory or developmental, at our discretion, and will be subject to
landowners' and overriding royalty interests totaling in the range of 12.5% to
25%, so we and our partners can acquire between a 87.5% and 75% net revenue
interest and a 100% working interest in the drill site. The specific ownership
interests between us and our partners will be negotiated on an individual
project basis.
We will focus our attention on drilling primarily in the same specific
geographical area in which we plan to acquire interests. We plan to concentrate
our activities in the Western United States. We plan to utilize various
reporting services such as Petroleum Information and our contacts within the
petroleum industry to identify drilling locations, companies and ownership
activity. However, since the thrust of our initial efforts will be to acquire
leases with a minimum of capital outlay, we will also look at situations in any
other geographical area where such leases may be obtained. The ability to drill
in a specific lease area will be secondary to the ability to acquire a lease on
terms most favorable to us and at little or no capital outlay. At the present
time, we have been looking for leases which meet the above-mentioned criteria
but has not yet identified any lease situations which we believe would be
appropriate for acquisition. We cannot predict when such identification will
occur.
We expect to enter into turnkey drilling contracts with an unaffiliated
third party for the drilling of any wells. At some later time, we may act as the
driller of the wells, although there are no plans to do so at the present time.
The costs of drilling wells have not been determined at this time. In any case,
we will make every attempt to see that the well are drilled in such areas with
our best estimate of making the best return on investment for us and our
partners.
The turnkey drilling contract represents the cost of drilling and
completion. If, in our sole opinion, a well should not be completed because it
will not produce sufficient oil or gas to return a profit, then we would not
anticipate expending the completion funds for such well.
It is currently anticipated that any wells to be drilled by us will be
drilled within the geographical area or areas selected by us. However, once
selected, if subsequent engineering evaluation indicates a more favorable
location, we reserve the right to move the drill site or sites, as the case may
be, to such location or locations, as the case may be. Any substituted well
location or drill site would compare favorably with the general character of the
site previously selected regarding degree of risk, drilling depth and cost.
Furthermore, it is expected, though not necessarily required, that any such
substituted well location or drill site will be in the same general area as the
site specified herein.
In addition, we would reserve the right to unitize or pool all of the wells
in the selected geographical area into a common production pool or unit. In such
event, the owners of the wells, which may include non-partnership investors of
ours, will share in the revenue on a pro-rata basis.
We expect to participate in joint ventures with other entities in the
development of some prospects. We will have the sole discretion in determining
which prospects will be suitable for joint venture participation. In each such
joint venture project, any such partnership would receive its pro rata portion
of the 100% working interest and would be responsible for its pro rata share of
costs and expenses.
Also, we may seek, investigate, and, if warranted, acquire one or more oil
or gas properties. The acquisition of a business opportunity may be made by
purchase, merger, exchange of stock, or otherwise, and may encompass assets or a
business entity, such as a corporation, joint venture, or partnership. We have
very limited capital, and it is unlikely that we will be able to take advantage
of more than one such business opportunity. We intend to seek opportunities
demonstrating the potential of long-term growth as opposed to short-term
earnings.
At the present time we have not identified any oil or gas business
opportunity that we plan to pursue, nor have we reached any agreement or
definitive understanding with any person concerning any business matter. No
assurance can be given that we will be successful in finding or acquiring a
desirable business opportunity, or that any acquisition that occurs will be on
terms that are favorable to us or our stockholders.
MARKETS
Our initial marketing plan will be focused completely on developing oil and
gas lease projects in which we can act either as the drilling operator for an
investor group or as a broker of leases for a lessor. No efforts toward this
marketing plan have been made as of the date hereof.
RAW MATERIALS
The use of raw materials is not now material factor in our operations at
the present time.
CUSTOMERS AND COMPETITION
At the present time, we are expected to be experience intense competition
in the acquisition of oil and gas leases. There are a number of established
companies, many of which are larger and better capitalized than us and/or have
greater personnel resources and technical expertise. In view of our extremely
limited financial resources, we will be at a significant competitive
disadvantage compared to our competitors.
BACKLOG
At December 31, 2003, we had no backlogs.
EMPLOYEES
At as of the date hereof, we have one employee, our President, Mr. Delaney,
who presently does not receive any compensation. We do not plan to hire
employees in the future.
PROPRIETARY INFORMATION
We have no proprietary information.
GOVERNMENT REGULATION AND ENVIRONMENTAL COMPLIANCE
We expect to be subject to material governmental regulation and
environmental compliance and approvals customarily incident to the operation of
an oil and gas company. The extent of such regulation cannot be determined at
this time, since the properties to be explored have not yet been selected. It
will be our policy to fully comply with all governmental regulation.
RESEARCH AND DEVELOPMENT
We have never spent any amount in research and development activities.
ITEM 2. DESCRIPTION OF PROPERTY.
We do not currently maintain an office or any other facilities. We
currently maintain a mailing address at P.O. Box 890261 Temecula, California
92589, which is the address of our sole Officer and Director. We pay no rent for
the use of this mailing address. We have no plans to maintain an office at any
time in the foreseeable future in order to carry out our plan of operations
described herein. Our telephone number is (909)693-2285
ITEM 3. LEGAL PROCEEDINGS.
We are not a party to any pending legal proceedings, and no such
proceedings are known to be contemplated.
No director, officer or affiliate of ours, and no owner of record or
beneficial owner of more than 5% of the securities of ours, or any associate of
any such director, officer or security holder is a party adverse to us or has a
material interest adverse to us in reference to pending litigation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of our security holders during the
fourth quarter of the fiscal year which ended December 31, 2003.
Part II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
There is currently no public trading market for our securities. The
securities are held of record by a total of approximately 47 persons.
No dividends have been declared or paid on our securities, and it is not
anticipated that any dividends will be declared or paid in the foreseeable
future.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
PLAN OF OPERATIONS
We have generated no revenues from our operations in recent years and have
been a development stage company since our formation. Since we have not
generated revenues and have not been in a profitable position, we operate with
minimal overhead. Our primary activity will be to search for and to acquire oil
and gas leases for our own account, and for the foreseeable future to search for
and to acquire oil and gas leases for the account of our clients. No leases or
clients have been identified at this time. We intend to develop oil and gas
lease projects in which we can act either as the drilling operator for an
investor group or as a broker of leases for a lessor and for the account of its
clients. Leases may be received from individuals or companies by assignment
under an agreement to develop or sell such leases on behalf of such persons. We
also plan in the future to act as a broker for lease situations involving third
parties.
We will focus our attention on drilling primarily in the same specific
geographical area in which we plan to acquire interests. We plan to concentrate
our activities in the Western United States. We plan to utilize various
reporting services such as Petroleum Information and our contacts within the
petroleum industry to identify drilling locations, companies and ownership
activity. However, since the thrust of our initial efforts will be to acquire
leases with a minimum of capital outlay, we will also look at situations in any
other geographical area where such leases may be obtained. The ability to drill
in a specific lease area will be secondary to the ability to acquire a lease on
terms most favorable to us and at little or no capital outlay. At the present
time, we have been looking for leases which meet the above-mentioned criteria
but has not yet identified any lease situations which we believe would be
appropriate for acquisition. We cannot predict when such identification will
occur.
We expect to enter into turnkey drilling contracts with an unaffiliated
third party for the drilling of any wells. At some later time, we may act as the
driller of the wells, although there are no plans to do so at the present time.
The costs of drilling wells have not been determined at this time. In any case,
we will make every attempt to see that the well are drilled in such areas with
our best estimate of making the best return on investment for us and our
partners.
The turnkey drilling contract represents the cost of drilling and
completion. If, in our sole opinion, a well should not be completed because it
will not produce sufficient oil or gas to return a profit, then we would not
anticipate expending the completion funds for such well.
It is currently anticipated that any wells to be drilled by us will be
drilled within the geographical area or areas selected by us. However, once
selected, if subsequent engineering evaluation indicates a more favorable
location, we reserve the right to move the drill site or sites, as the case may
be, to such location or locations, as the case may be. Any substituted well
location or drill site would compare favorably with the general character of the
site previously selected regarding degree of risk, drilling depth and cost.
Furthermore, it is expected, though not necessarily required, that any such
substituted well location or drill site will be in the same general area as the
site specified herein.
In addition, we would reserve the right to unitize or pool all of the wells
in the selected geographical area into a common production pool or unit. In such
event, the owners of the wells, which may include non-partnership investors of
ours, will share in the revenue on a pro-rata basis.
We expect to participate in joint ventures with other entities in the
development of some prospects. We will have the sole discretion in determining
which prospects will be suitable for joint venture participation. In each such
joint venture project, any such partnership would receive its pro rata portion
of the 100% working interest and would be responsible for its pro rata share of
costs and expenses.
Also, we may seek, investigate, and, if warranted, acquire one or more oil
or gas properties. The acquisition of a business opportunity may be made by
purchase, merger, exchange of stock, or otherwise, and may encompass assets or a
business entity, such as a corporation, joint venture, or partnership. We have
very limited capital, and it is unlikely that we will be able to take advantage
of more than one such business opportunity. We intend to seek opportunities
demonstrating the potential of long-term growth as opposed to short-term
earnings.
At the present time we have not identified any oil or gas business
opportunity that we plan to pursue, nor have we reached any agreement or
definitive understanding with any person concerning any business matter. No
assurance can be given that we will be successful in finding or acquiring a
desirable business opportunity, or that any acquisition that occurs will be on
terms that are favorable to us or our stockholders.
Our plan of operations for the next twelve months is to continue to carry
out our plan of business discussed above. This includes seeking to complete a
merger or acquisition transaction for oil or gas properties.
LIQUIDITY AND CAPITAL RESOURCES
As of the end of the reporting period, we had no material cash or cash
equivalents. There was no significant change in working capital during this
fiscal year.
Our management feels we have inadequate working capital to pursue any
business opportunities other than seeking leases for acquisition and partnership
with third parties. We will have negligible capital requirements prior to the
consummation of any such acquisition. We so not intend to pay dividends in the
foreseeable future.
We will not be required to raise additional funds, nor will our
shareholders be required to advance funds in order to pay our current
liabilities and to satisfy our cash requirements for the next twelve months.
ITEM 7. FINANCIAL STATEMENTS.
Financial statements for the years ended December 31, 2003 and 2002 are
presented in a separate section of this report following Item 14.
ITEM 8. DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
There were no disagreements on accounting and financial disclosures with the
present accounting firm during the reporting period.
ITEM 8a. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this annual report on Form 10-KSB, we
evaluated the effectiveness of the design and operation of its disclosure
controls and procedures (as defined in the Securities Exchange Act of 1934 Rules
13a-15(e) and 15d-15(e)). That evaluation was performed under the supervision
and with the participation of its management, including its Chief Executive
Officer and its Chief Financial Officer. Based on that evaluation, our Chief
Financial Officer concluded that the Company's disclosure controls and
procedures are effective in timely alerting him to material information relating
to Entrust Financial Services required to be included in its periodic SEC
filings.
Changes in Internal Control over Financial Reporting
The Company has made no significant change in its internal control over
financial reporting during the most recent fiscal quarter covered by this annual
report on Form 10-KSB that has materially affected, or is reasonably likely to
materially affect, its internal control over financial reporting.
Part III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
The directors and executive officers currently serving the Company are as
follows:
Name Age Positions Held and Tenure
---- --- -------------------------
Michael J. Delaney 46 President, Secretary and Director
The director named above will serve until the next annual meeting of our
stockholders. Thereafter, directors will be elected for one-year terms at the
annual stockholders' meeting. Officers will hold their positions at the pleasure
of the board of directors, absent any employment agreement, of which none
currently exists or is contemplated. There is no arrangement or understanding
between any of our directors or officers or any other person pursuant to which
any director or officer was or is to be selected as a director or officer.
Our directors and officer will devote his time to our affairs on an "as
needed" basis, which, depending on the circumstances, could amount to as little
as two hours per month, or more than forty hours per month, but more than likely
will fall within the range of five to ten hours per month.
Biographical Information
Michael Delaney, President and Director. In January, 1998, he became our
President, Secretary, and sole Director. Since 1980, Mr. Delaney has also been
the owner and president of MD Sales, a sales representative and consulting firm
for various companies in product development, sales, and marketing. Mr. Delaney
has served as a Director of Maui Capital Corporation from 1988 to 1995 and of
Parkway Capital Corporation from 1988 to 1994.
Compliance With Section 16(a) of the Exchange Act.
Our sole director and officer received 1,000,000 shares as remuneration in
fiscal year 2000 but has not filed a Form 5 with respect to the transaction.
Otherwise, we have no report to give with respect to any matters involving
compliance with Section 16(a) of the Exchange Act.
ITEM 10. EXECUTIVE COMPENSATION.
Our sole director and officer received no remuneration from us during the
fiscal year. Otherwise, until we acquire additional capital, our sole officer
and director will receive compensation from us for reimbursement only of
out-of-pocket expenses. We have no stock option, retirement, pension, or
profit-sharing programs for the benefit of directors, officers or other
employees, but the Board of Directors may recommend adoption of one or more such
programs in the future.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of the end of our most recent fiscal
year, the number of shares of Common Stock owned of record and beneficially by
executive officers, directors and persons who hold 5.0% or more of the
outstanding our Common Stock. Also included are the shares held by all executive
officers and directors as a group.
Name and Number of Shares Percent of
Address Owned Beneficially Class Owned
------- ------------------ -----------
Michael J. Delaney 1,627,965 70.2%
P.O. Box 890261
Temecula, California 92589
All directors and
executive officers
(1 person) 1,627,965 70.2%
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Change of Control
On December 17, 1997, control passed to Michael Delaney, who paid cash
consideration of $11,359 for a total of 627,965 common shares, which was a total
of approximately 61% of the Registrant. Mr. Delaney was also named our
President, Secretary, and sole Director at that time, and the former Officer and
Director resigned.
Conflicts of Interest
None of our officers will devote more than a portion of his time to our
affairs. There will be occasions when the time requirements of our business
conflict with the demands of the officer's other business and investment
activities. Such conflicts may require that we attempt to employ additional
personnel. There is no assurance that the services of such persons will be
available or that they can be obtained upon terms favorable to us.
ITEM 13. EXHIBITS AND REPORTS ON FORM 10-KSB.
The Exhibits listed below are filed as part of this Annual Report.
Exhibit No. Document
3.1 * Articles of Incorporation
3.2 * Bylaws
4.1 * Specimen Certificate
31.1 Certification of CEO and CFO pursuant to Sec. 302
32.1 Certification of CEO and CFO pursuant to Sec. 906
* Previously filed.
We filed no reports Form 8-K during the last quarter of its fiscal year
ending December 31, 2003.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Our independent auditor, Michael Johnson & Co., LLC, Certified Public
Accountants, billed an aggregate of $5,000 for the years ended December 31, 2000
and 2003 for professional services rendered for the audit of our annual
financial statements and review of the financial statements included in our
quarterly reports.
We do not have an audit committee and as a result its entire board of
directors performs the duties of an audit committee. Our board of directors
evaluates the scope and cost of the engagement of an auditor before the auditor
renders audit and non-audit services.
BOULDER CAPITAL OPPORTUNITIES II, INC.
(An Exploration Stage Company)
FINANCIAL STATEMENTS
For Years Ended December 31, 2003 and 2002
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Boulder Capital Opportunities II, Inc.
Chandler, AZ
We have audited the accompanying balance sheet of Boulder Capital Opportunities
II, Inc., (An Exploration Stage Company) as of December 31, 2003 and 2002, and
the related statements of operations, stockholders' equity, and cash flows for
the years ended December 31, 2003 and 2002 and for the period August 6, 1996
(inception) to December 31, 2003. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements, based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States and in accordance with the standards of the PCAOB. 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.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Boulder Capital Opportunities
II, Inc., as of December 31, 2003 and 2002, and the results of their operations
and their cash flows for the years ended December 31, 2003 and 2002, and for the
period August 6, 1996 (inception) to December 31, 2003, in conformity with
accounting principles generally accepted in the United States.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements the Company is in the development stage, and will require
funds from profitable operations, from borrowing or from sale of equity
securities to execute its business plan. Management's plans in regard to these
matters are also discussed in Note 3. These factors raise substantial doubt
about its ability to continue as a going concern. The financial statements do
not include any adjustments that might result from this uncertainty.
Michael Johnson & Co., LLC
Denver, Colorado
September 14, 2004,
F-1
BOULDER CAPITAL OPPORTUNITIES II, INC.
(An Exploration Stage Company)
Balance Sheets
December 31,
2003 2002
--------- ---------
ASSETS;
Current Assets:
Cash $ -- $ --
--------- ---------
Total Current Assets -- --
--------- ---------
Other Assets:
Organizational Costs, net of amortization -- --
--------- ---------
Total Other Assets -- --
--------- ---------
TOTAL ASSETS $ -- $ --
========= =========
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable 12,209 3,509
--------- ---------
Total Current Liabilities 12,209 3,509
--------- ---------
Stockholders' Equity
Preferred stock, no par value, 10,000,000 shares
authorized, none issued or outstanding
Common stock, no par value, 100,000,000 shares
authorized, 2,230,200 issued and outstanding in 114,164 114,164
2003 and 2002
Deficit accumulated during the
exploration stage (126,373) (117,673)
--------- ---------
Total Stockholders' Equity (12,209) (3,509)
--------- ---------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ -- $ --
========= =========
The accompanying notes are an integral part of these financial statements.
F-2
BOULDER CAPITAL OPPORTUNITIES II, INC.
(An Exploration Stage Company)
Statements of Operations
Year Ended August 6, 1996
December 31, (Inception) to
--------------------------- December 31,
2003 2002 2003
------------ ------------ -----------
Revenue:
Rental Income $ -- $ -- $ 5,000
----------- ----------- -----------
Total Income -- -- 5,000
----------- ----------- -----------
Costs and Expenses:
Amortization -- -- 28,400
Professional Fees 8,500 -- 94,001
Other Expenses 200 -- 9,048
----------- ----------- -----------
Total Operating Expenses 8,700 -- 131,449
----------- ----------- -----------
Other Income and Expenses:
Interest Income -- -- 76
----------- ----------- -----------
Total Other Income & Expenses -- -- 76
----------- ----------- -----------
Net Loss $ (8,700) $ -- $ (126,373)
=========== =========== ===========
Per Share Information:
Weighted average number
of common shares outstanding 2,230,200 2,230,200 2,230,200
----------- ----------- -----------
Net Loss per common share $ (*) $ (*) $ (0.06)
=========== =========== ===========
The accompanying notes are an integral part of these financial statements.
F-3
BOULDER CAPITAL OPPORTUNITIES II, INC.
(An Exploration Stage Company)
Stockholders' Equity (Deficit)
December 31, 2003
COMMON STOCKS Deficit
------------------------ Accum. During Total
Exploration Stockholders'
# of Shares Amount Stage Equity
------------ --------- --------- ---------
Balance - August 8, 1996 -- -- -- --
Issuance of stock for compensation 710,000 28,400 -- 28,400
Issuance of stock for cash 100,000 4,000 -- 4,000
Issuance of stock for cash 200,000 8,000 -- 8,000
Net Loss for Period -- -- (6,448) (6,448)
------------ --------- --------- ---------
Balance - August 31, 1996 1,010,000 40,400 (6,448) 33,952
--------- --------- --------- ---------
Issuance of stock for compensation 20,200 20,200 -- 20,200
Net Loss for the Year -- -- (32,493) (32,493)
--------- --------- --------- ---------
Balance - August 31, 1997 1,030,200 60,600 (38,941) 21,659
--------- --------- --------- ---------
Additional paid-in capital -- 5,564 -- 5,564
Net Loss for the Year -- -- (12,792) (12,792)
--------- --------- --------- ---------
Balance - December 31, 1998 1,030,200 66,164 (51,733) 14,431
--------- --------- --------- ---------
Net Loss for the Year -- -- (17,940) (17,940)
--------- --------- --------- ---------
Balance - December 31, 1999 1,030,200 66,164 (69,673) (3,509)
--------- --------- --------- ---------
Issuance of stock for compensation 1,200,000 48,000 -- 48,000
Net Loss for the Year -- -- (48,000) (48,000)
--------- --------- --------- ---------
Balance - December 31, 2000 2,230,200 114,164 (117,673) (3,509)
--------- --------- --------- ---------
Net Loss for the Year -- -- -- --
--------- --------- --------- ---------
Balance - December 31, 2001 2,230,200 114,164 (117,673) (3,509)
--------- --------- --------- ---------
Net Loss for the Year -- -- -- --
--------- --------- --------- ---------
Balance - December 31, 2002 2,230,200 114,164 (117,673) (3,509)
--------- --------- --------- ---------
Net Loss for the Year -- -- (8,700) (8,700)
--------- --------- --------- ---------
Balance - December 31, 2003 2,230,200 $ 114,164 $(126,373) $ (12,209)
========= ========= ========= =========
The accompanying notes are an integral part of these financial statements.
F-4
BOULDER CAPITAL OPPORTUNITIES II, INC.
(An Exploration Stage Company)
Statements of Cash Flow
Indirect Method
Year Ended August 6, 1996
December 31, (Inception) to
---------------------- December 31,
2003 2002 2003
---------- ---------- ----------
Cash Flows from Operating Activities:
Net Loss $ (8,700) $ -- $ (126,373)
Stock issued for services -- -- 96,600
Adjustment to reconcile net loss to net
cash provided by operating activities
Amortization -- -- 28,400
Increase (Decrease) in Accounts Payable 8,700 -- 12,209
--------- --------- ----------
Net Cash Used In Operating Activities -- -- 10,836
--------- --------- ----------
Cash Flows from Investing Activities:
Acquisition of organizational services -- -- (28,400)
--------- --------- ----------
Net Cash used in Investing Activities -- -- (28,400)
--------- --------- ----------
Cash Flows from Financing Activities:
Issuance of stock -- -- 17,565
--------- --------- ----------
Net Cash Provided by Financing Activities -- -- 17,565
--------- --------- ----------
Net Increase in Cash & Cash Equivalents -- -- --
Beginning Cash & Cash Equivalents -- -- --
--------- --------- ----------
Ending Cash & Cash Equivalents $ -- $ -- $ --
========= ========= ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for Interest $ -- $ -- $ --
========= ========= ==========
Cash paid for Income Taxes $ -- $ -- $ --
========= ========= ==========
NON-CASH TRANSACTIONS
Stock issued for compensation $ -- $ -- $ 96,000
========= ========= ==========
The accompanying notes are an integral part of these financial statements.
F-5
BOULDER CAPITAL OPPORTUNITIES II, INC.
(An Exploration Stage Company)
Notes to Financial Statements
December 31, 2003
Note 1 - Organization and Summary of Significant Accounting Policies:
------------------------------------------------------------
Organization:
-------------
The Company was incorporated on August 6, 1996, in the state of Colorado. The
Company is in the exploration stages and was originally organized for the
purpose of operating as a capital market access corporation and to acquire one
or more existing businesses through merger or acquisition. The Company has
changed its focus and is now in the oil and gas business, with an emphasis on
acquisition of producing properties. The Company's fiscal year end is December
31.
Basis of Presentation - Exploration Stage Company:
--------------------------------------------------
The Company has not earned significant revenues from limited principal
operations. Accordingly, the Company's activities have been accounted for as
those of an "Exploration Stage Enterprise" as set forth in Financial Accounting
Standards Board Statement No. 7 ("SFAS 7"). Among the disclosures required by
SFAS 7 are that the Company's financial statements be identified as those of an
exploration stage company, and that the statements of operations, stockholders'
equity (deficit) and cash flows disclose activity since the date of the
Company's inception.
Basis of Accounting:
--------------------
The accompanying financial statements have been prepared on the accrual basis of
accounting in accordance with accounting principles generally accepted in the
United States.
Cash and Cash Equivalents:
--------------------------
The Company considers all highly liquid debt instruments, with an original
maturity of three months to be cash equivalents.
Use of estimates:
-----------------
The preparation of financial statements, in conformity with generally accepted
accounting principles, requires management to make estimates and assumptions
that affect certain reported amounts of assets and liabilities at the date of
the financial statements. Actual results could differ from those estimates.
Net Loss Per Share
------------------
Net loss per share is based on the weighted average number of common shares and
common shares equivalents outstanding during the period.
Other Comprehensive Income
--------------------------
The Company has no material components of other comprehensive income (loss), and
accordingly, net loss is equal to comprehensive loss in all periods.
F-6
BOULDER CAPITAL OPPORTUNITIES II, INC.
(An Exploration Stage Company)
Notes to Financial Statements
December 31, 2003
Note 2 - Federal Income Taxes:
---------------------
The Company has made no provision for income taxes because there have been no
operations to date causing income for financial statements or tax purposes.
The Financial Accounting Standards Board (FASB) has issued Statement of
Financial Accounting Standards Number 109 ("SFAS 9"). "Accounting for Income
Taxes", which requires a change from the deferred method to the asset and
liability method of accounting for income taxes. Under the asset and liability
method, deferred income taxes are recognized for the tax consequences of
"temporary differences" by applying enacted statutory tax rates applicable to
future years to differences between the financial statement carrying amounts and
the tax basis of existing assets and liabilities.
Deferred tax assets:
Net operating loss carryforwards $ 126,373
Valuation allowance (126,373)
----------
Net deferred tax assets $ 0
==========
At December 31, 2003, the Company had net operating loss carryforwards of
approximately $126,373 for federal income tax purposes. These carryforwards if
not utilized to offset taxable income will begin to expire in 2007.
Note 3 - Going Concern:
--------------
The financial statements of the Company have been presented on the basis that
they are a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company has an
accumulated deficit at December 31, 2003 of $126,373.
The future success of the Company is likely dependent on its ability to attain
additional capital, or to find an acquisition to add value to its present
shareholders and ultimately, upon its ability to attain future profitable
operations. There can be no assurance that the Company will be successful in
obtaining such financing, or that it will attain positive cash flow from
operations. Management believes that actions presently being taken to revise the
Company's operating and financial requirements provide the opportunity for the
Company to continue as a going concern.
Note 4 - Capital Stock Transactions:
---------------------------
The authorized common shares of stock of the Company, was established at
100,000,000 with no par value. The Company issued no shares of common stock
during the year ended December 31, 2003. The authorized preferred shares of
stock of the Company, was established at 10,000,000 with no par value. There
have been no shares of preferred stock issued.
F-7
BOULDER CAPITAL OPPORTUNITIES II, INC.
(An Exploration Stage Company)
Notes to Financial Statements
December 31, 2003
Note 5 - Segment Information:
--------------------
Boulder Capital Opportunities II, Inc. operates primarily in a single operating
segment, the capital marketing access business for the purpose of merger and
acquisitions in the gas and oil business.
Note 6 - Subsequent Event:
-----------------
On July 20, 2004 the Company signed a promissory note to Michael DeLaney for
$8,700 to pay some of the accounts payable of the Company's.
Note 7 - Financial Accounting Developments:
----------------------------------
Recently issued Accounting Pronouncements
-----------------------------------------
In January 2003, the FAS issued FASB Interpretation No. 146, "Consolidation of
Variable Interest Entities" and interpretation of ARB (Accounting Research
Bulletin) No. 51. The interpretation addresses consolidation and disclosure
issues associated with variable interest entities. In October 2003, the
effective date of FIN 146 for variable interest entities in existence prior to
February 1, 2003, was delayed to December 31, 2003. In December 2003, the FASB
issued a revised version of FIN 146, which effectively delayed implementation
until March 2004, with earlier adoption permitted. SFAS No. 146 did not
materially effect the financial statements.
In March 2003, the FAS issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities". SFAS 149 is effective for
contracts entered into or modified after June 30, 2003. The statement amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives) and for hedging activities under SFAS
133, "Accounting for Derivative Instruments and Hedging Activities". SFAS 149
did not materially effect the financial statements.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity". SFAS 150 is
effective for financial instruments entered into or modified after May 31, 2003,
and otherwise is effective at the beginning to the first interim period
beginning after June 15, 2003. This statement establishes new standards of how
an issuer classifies and measures certain financial instruments with
characteristics of both liabilities and equity. SFAS 150 requires that an issuer
classify a financial instrument that is within the scope of this statement as a
liability because the financial instrument embodies an obligation of the issuer.
This statement applies to certain forms of mandatorily redeemable financial
instruments including certain types of preferred stock, written put options and
forward contracts. SFAS 150 did not materially effect the financial statements.
F-8
Signatures
In accordance with the Exchange Act, this report has been signed below by
the following person on behalf of the registrant and in the capacities and on
the dates indicated.
BOULDER CAPITAL OPPORTUNITIES II, INC.
By: /s/ Michael J. Delaney
--------------------------------
Michael J. Delaney
Director, Principal Executive Officer,
Principal Financial Officer, Principal
Accounting Officer
Date: November 30, 2004