UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-QSB
--------------------------------------------------------------------------------
(Mark one)
X Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
------ Act of 1934
For the quarterly period ended March 31, 2004
Transition Report Under Section 13 or 15(d) of the Securities Exchange
------ Act of 1934
For the transition period from ______________ to _____________
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Commission File Number: 0-12536
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Boulder Acquisitions, Inc.
(Exact name of small business issuer as specified in its charter)
Nevada 90-0093373
(State of incorporation) (IRS Employer ID Number)
12890 Hilltop Road, Argyle, TX 76226
(Address of principal executive offices)
(972) 233-0300
(Issuer's telephone number)
211 West Wall Street, Midland, TX 79701-4556
(Former name, former address and former fiscal year,
if changed since last report)
--------------------------------------------------------------------------------
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
--- ---
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: April 29, 2004: 1,102,956
Transitional Small Business Disclosure Format (check one): YES NO X
--- ---
Boulder Acquisitions, Inc.
Form 10-QSB for the Quarter ended March 31, 2004
Table of Contents
Page
----
Part I - Financial Information
Item 1 Financial Statements 3
Item 2 Management's Discussion and Analysis or Plan of Operation 13
Item 3 Controls and Procedures 15
Part II - Other Information
Item 1 Legal Proceedings 15
Item 2 Changes in Securities 15
Item 3 Defaults Upon Senior Securities 16
Item 4 Submission of Matters to a Vote of Security Holders 16
Item 5 Other Information 16
Item 6 Exhibits and Reports on Form 8-K 17
Signatures 17
2
Part I
Item 1 - Financial Statements
Boulder Acquisitions, Inc.
Balance Sheets
March 31, 2004 and 2003
(Unaudited)
March 31, March 31,
2004 2003
----------- -----------
Assets
------
Assets
Cash on hand and in bank $ 302,096 $ 1,931
----------- -----------
Total Assets $ 302,096 $ 1,931
=========== ===========
Liabilities and Shareholders' Equity
------------------------------------
Liabilities
Accounts payable - trade $ -- $ --
----------- -----------
Total liabilities -- --
----------- -----------
Commitments and contingencies
Shareholders' Equity
Common stock - $0.001 par value
100,000,000 shares authorized
1,102,956 and 277,956 shares
issued and outstanding, respectively 1,103 278
Additional paid-in capital 3,292,803 2,963,628
Accumulated deficit (2,991,810) (2,961,975)
----------- -----------
Total shareholders' equity 302,096 1,931
----------- -----------
Total Liabilities and Shareholders' Equity $ 302,096 $ 1,931
=========== ===========
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.
3
Boulder Acquisitions, Inc.
Statements of Operations and Comprehensive Income
Three months ended March 31, 2004 and 2003
(Unaudited)
Three months Three months
ended ended
March 31, March 31,
2004 2003
------------ ------------
Revenues $ -- $ --
------------ ------------
Expenses
General and administrative expenses
Consulting fees paid to related party 30,000 --
------------ ------------
Loss from Operations (30,000) --
Other income
Interest income 164 4
------------ ------------
Income (Loss) before
provision for income taxes (29,836) 4
Provision for Income Taxes -- --
------------ ------------
Net Income (Loss) (29,836) 4
Other Comprehensive Income -- --
------------ ------------
Comprehensive Income (Loss) $ (29,836) $ 4
============ ============
Loss per weighted-average share
of common stock outstanding,
computed on Net Loss - basic and fully diluted $ (0.05) nil
============ ============
Weighted-average number of shares
of common stock outstanding 647,187 277,956
============ ============
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.
4
Boulder Acquisitions, Inc.
Statements of Cash Flows
Three months ended March 31, 2004 and 2003
(Unaudited)
Three months Three months
ended ended
March 31, March 31,
2004 2003
------------ ------------
Cash Flows from Operating Activities
Net Income (Loss) $ (29,836) $ 4
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation -- --
Consulting fees paid with common stock 30,000 --
------------ ------------
Net cash used in operating activities 164 4
------------ ------------
Cash Flows from Investing Activities -- --
------------ ------------
Cash Flows from Financing Activities
Proceeds from sale of common stock 300,000 --
------------ ------------
Net cash provided by financing activities 300,000 --
------------ ------------
Increase (Decrease) in Cash and Cash Equivalents 300,164 4
Cash and cash equivalents at beginning of period 1,932 1,927
------------ ------------
Cash and cash equivalents at end of period $ 302,096 $ 1,931
============ ============
Supplemental Disclosures of Interest and Income Taxes Paid
Interest paid during the period $ -- $ --
============ ============
Income taxes paid (refunded) $ -- $ --
============ ============
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.
5
Boulder Acquisitions, Inc.
Notes to Financial Statements
Note A - Organization and Description of Business
Boulder Acquisitions, Inc. (Company) was incorporated under the laws of the
State of Colorado in 1980 as Boulder Brewing Company. The Company was the
successor to a general partnership formed in 1979.
In September 2001, the Company changed its state of Incorporation from Colorado
to Nevada by means of a merger with and into Boulder Acquisitions, Inc., a
Nevada corporation formed on September 6, 2001 solely for the purpose of
effecting the reincorporation. The Articles of Incorporation and Bylaws of the
Nevada corporation are the Articles of Incorporation and Bylaws of the surviving
corporation. Such Articles of Incorporation eliminated the provision for the
Company to issue preferred stock and did not make any other changes the capital
structure of the Company.
From the initial inception of the original partnership through 1990, the Company
was in the business of operating a microbrewery (generally defined as a brewery
which produces less than 15,000 barrels per year) in Boulder, Colorado. During
1990, as a result of various debt defaults, the Company's assets were foreclosed
upon and the Company ceased all business operations.
The Company has effectively had no operations, assets or liabilities since its
fiscal year ended December 31, 1990.
Note B - Preparation of Financial Statements
The Company follows the accrual basis of accounting in accordance with
accounting principles generally accepted in the United States of America and has
a year-end of December 31.
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.
Management further acknowledges that it is solely responsible for adopting sound
accounting practices, establishing and maintaining a system of internal
accounting control and preventing and detecting fraud. The Company's system of
internal accounting control is designed to assure, among other items, that 1)
recorded transactions are valid; 2) valid transactions are recorded; and 3)
transactions are recorded in the proper period in a timely manner to produce
financial statements which present fairly the financial condition, results of
operations and cash flows of the Company for the respective periods being
presented
During interim periods, the Company follows the accounting policies set forth in
its annual audited financial statements filed with the U. S. Securities and
Exchange Commission on its Annual Report on Form 10-KSB for the year ended
December 31, 2003. The information presented within these interim financial
statements may not include all disclosures required by generally accepted
accounting principles and the users of financial information provided for
interim periods should refer to the annual financial information and footnotes
when reviewing the interim financial results presented herein.
6
Boulder Acquisitions, Inc.
Notes to Financial Statements - Continued
Note B - Preparation of Financial Statements - Continued
In the opinion of management, the accompanying interim financial statements,
prepared in accordance with the U. S. Securities and Exchange Commission's
instructions for Form 10-QSB, are unaudited and contain all material
adjustments, consisting only of normal recurring adjustments necessary to
present fairly the financial condition, results of operations and cash flows of
the Company for the respective interim periods presented. The current period
results of operations are not necessarily indicative of results which ultimately
will be reported for the full fiscal year ending December 31, 2004.
Note C - Going Concern Uncertainty
From the initial inception of the original partnership through 1990, the Company
was in the business of operating a microbrewery (generally defined as a brewery
which produces less than 15,000 barrels per year) in Boulder, Colorado. During
1990, as a result of various debt defaults, the Company's assets were foreclosed
upon and the Company ceased all business operations.
The Company has effectively had no operations, assets or liabilities since its
fiscal year ended December 31, 1990. Accordingly, the Company is dependent upon
management and/or significant shareholders to provide sufficient working capital
to preserve the integrity of the corporate entity at this time.
The Company's continued existence is dependent upon its ability to generate
sufficient cash flows from operations to support its daily operations as well as
provide sufficient resources to retire existing liabilities and obligations on a
timely basis.
The Company anticipates offering future sales of equity securities. However,
there is no assurance that the Company will be able to obtain additional funding
through the sales of additional equity securities or, that such funding, if
available, will be obtained on terms favorable to or affordable by the Company.
If no additional operating capital is received during the next twelve months,
the Company will be forced to rely on existing cash in the bank and upon
additional funds loaned by management and/or significant shareholders to
preserve the integrity of the corporate entity at this time. In the event, the
Company is unable to acquire advances from management and/or significant
shareholders, the Company's ongoing operations would be negatively impacted.
It is the intent of management and significant shareholders to provide
sufficient working capital necessary to support and preserve the integrity of
the corporate entity. However, no formal commitments or arrangements to advance
or loan funds to the Company or repay any such advances or loans exist. There is
no legal obligation for either management or significant shareholders to provide
additional future funding.
Note D - Related Party Transaction
On February 23, 2004, the Company agreed to pay Little and Company Investment
Securities, an entity owned by the Company's former controlling shareholder,
officer and director, $30,000 in consulting fees related to a February 23, 2004
change in control transaction. In the formalization of this obligation, the
Company issued a $30,000 non-interest bearing promissory note maturing on
February 23, 2005. Concurrent with the change in control, the Company and Little
and Company Investment Securities executed an "Exchange Agreement" whereby the
Company issued 150,000 shares of unregistered, restricted common stock in
satisfaction of the outstanding promissory note.
7
Boulder Acquisitions, Inc.
Notes to Financial Statements - Continued
Note E - Summary of Significant Accounting Policies
1. Cash and cash equivalents
-------------------------
For Statement of Cash Flows purposes, the Company considers all cash on
hand and in banks, including accounts in book overdraft positions,
certificates of deposit and other highly-liquid investments with maturities
of three months or less, when purchased, to be cash and cash equivalents.
2. Income Taxes
------------
The Company uses the asset and liability method of accounting for income
taxes. At March 31, 2004 and 2003, respectively, the deferred tax asset and
deferred tax liability accounts, as recorded when material to the financial
statements, are entirely the result of temporary differences. Temporary
differences represent differences in the recognition of assets and
liabilities for tax and financial reporting purposes, primarily accumulated
depreciation and amortization, allowance for doubtful accounts and vacation
accruals.
As of March 31, 2004 and 2003, the deferred tax asset related to the
Company's net operating loss carryforward is fully reserved. Due to the
provisions of Internal Revenue Code Section 338, the Company may have no
net operating loss carryforwards available to offset financial statement or
tax return taxable income in future periods as a result of a change in
control involving 50 percentage points or more of the issued and
outstanding securities of the Company.
3. Income (Loss) per share
-----------------------
Basic earnings (loss) per share is computed by dividing the net income
(loss) available to common shareholders by the weighted-average number of
common shares outstanding during the respective period presented in our
accompanying financial statements. Fully diluted earnings (loss) per share
is computed similar to basic income (loss) per share except that the
denominator is increased to include the number of common stock equivalents
(primarily outstanding options and warrants). Common stock equivalents
represent the dilutive effect of the assumed exercise of the outstanding
stock options and warrants, using the treasury stock method, at either the
beginning of the respective period presented or the date of issuance,
whichever is later, and only if the common stock equivalents are considered
dilutive based upon the Company's net income (loss) position at the
calculation date.
The following common stock equivalents were excluded from the calculation
of diluted loss per share since their effect would have been anti-dilutive:
March 31, March 31,
2004 2003
--------- ---------
February 2004 Warrants 200,000 --
========= =========
Note F - Fair Value of Financial Instruments
The carrying amount of cash, accounts receivable, accounts payable and notes
payable, as applicable, approximates fair value due to the short term nature of
these items and/or the current interest rates payable in relation to current
market conditions.
8
Boulder Acquisitions, Inc.
Notes to Financial Statements - Continued
Note F - Fair Value of Financial Instruments - Continued
Interest rate risk is the risk that the Company's earnings are subject to
fluctuations in interest rates on either investments or on debt and is fully
dependent upon the volatility of these rates. The Company does not use
derivative instruments to moderate its exposure to interest rate risk, if any.
Financial risk is the risk that the Company's earnings are subject to
fluctuations in interest rates or foreign exchange rates and are fully dependent
upon the volatility of these rates. The company does not use derivative
instruments to moderate its exposure to financial risk, if any.
Note G -Income Taxes
The components of income tax (benefit) expense for each of the three months
ended March 31, 2004 and 2003, respectively, are as follows:
Three months Three months
ended ended
March 31, March 31,
2004 2003
------------ ------------
Federal:
Current $ -- $ --
Deferred -- --
------------ ------------
-- --
------------ ------------
State:
Current -- --
Deferred -- --
------------ ------------
-- --
------------ ------------
Total $ -- $ --
============ ============
As of March 31, 2004, as a result of a February 2004 change in control, the
Company has a limited net operating loss carryforward to offset future taxable
income. Subject to current regulations, this carryforward will begin to expire
in 2021. The amount and availability of the net operating loss carryforwards may
be subject to limitations set forth by the Internal Revenue Code. Factors such
as the number of shares ultimately issued within a three year look-back period;
whether there is a deemed more than 50 percent change in control; the applicable
long-term tax exempt bond rate; continuity of historical business; and
subsequent income of the Company all enter into the annual computation of
allowable annual utilization of the carryforwards.
(Remainder of this page left blank intentionally)
9
Boulder Acquisitions, Inc.
Notes to Financial Statements - Continued
Note G - Income Taxes - Continued
The Company's income tax expense (benefit) for each of the three month periods
ended March 31, 2004 and 2003, respectively, differed from the statutory federal
rate of 34 percent as follows:
Three months Three months
ended ended
March 31, March 31,
2004 2003
------------ ------------
Statutory rate applied to
income (loss) before income taxes $ (10,000) $ 1
Increase (decrease) in income taxes resulting from:
State income taxes -- --
Other, including graduated tax brackets, reserve
for deferred tax asset and application of net
operating loss carryforward 10,000 (1)
------------ ------------
Income tax expense $ -- $ --
============ ============
Temporary differences, consisting primarily of statutory deferrals of expenses
for organizational costs and statutory differences in the depreciable lives for
property and equipment, between the financial statement carrying amounts and tax
bases of assets and liabilities give rise to deferred tax assets and liabilities
as of March 31, 2004 and 2003, respectively:
March 31, March 31,
2004 2003
--------- ---------
Deferred tax assets
Net operating loss carryforwards $ -- $ 6,200
Less valuation allowance -- (6,200)
--------- ---------
Net Deferred Tax Asset $ -- $ --
========= =========
During each of the three month periods ended March 31, 2004 and 2003, the
reserve for the deferred current tax asset increased (decreased) by
approximately $(6,200) and $-0-, respectively.
Note H - Common Stock Transactions
During the second quarter of 2003, the Company's Board of Directors unanimously
adopted a resolution seeking shareholder approval to grant the Board of
Directors authority to amend the Company's Articles of Incorporation (the
"Articles") to effect a reverse stock split of the then issued and outstanding
common stock. Holders of a majority of our common stock approved the Boards'
recommendation of amending the Articles to effect a one-for- 150 reverse stock
split by consent in lieu of Special Meeting on April 30, 2003.
The reverse stock split, effected on or about June 10, 2003, did not change the
number of authorized shares of common stock or the par value of the Company's
common stock. Except for any changes as a result of the treatment of fractional
shares, each shareholder holds the same percentage of common stock outstanding
immediately following the reverse stock split as such shareholder did
immediately prior to the reverse stock split.
10
Boulder Acquisitions, Inc.
Notes to Financial Statements - Continued
Note H - Common Stock Transactions - Continued
No scrip or fractional certificates were issued in connection with this reverse
stock split. Shareholders who otherwise would be entitled to receive fractional
shares because they hold a number of Old Shares not evenly divisible will have
the number of new shares to which they are entitled rounded down to the nearest
whole number. Holders of less than 150 Old Shares, regardless of the actual
number held, will be entitled, upon surrender of certificate(s) representing
such shares, to a cash payment of $0.05 in lieu thereof. The ownership of a
fractional interest will not give the holder thereof any voting, dividend or
other rights except to receive payment therefore as described herein. There have
been no requests for payment of the $0.05 cash payment received by management
through March 31, 2004 or subsequent thereto. The Company remains contingently
liable for approximately $50 in payments for Holders of less than 150 Old Shares
cancelled as a result of this action.
This action caused the issued and outstanding shares to decrease from 83,790,676
to approximately 558,600. The effect of this action is reflected in the
accompanying financial statements as of the first day of the first period
presented.
On February 23, 2004, the Company sold 1,500,000 shares of restricted common
stock at $.20 per share for gross proceeds of $300,000, pursuant to a
subscription agreement, to Halter Financial Group, Inc., an entity owned by
Timothy P. Halter, who became the Company's current Chief Executive Officer. The
Company relied upon Section 4(2) of The Securities Act of 1933, as amended, for
an exemption from registration of these shares and no underwriter was used in
this transaction. As a result of this transaction, Halter Financial Group, Inc.
became the Company's controlling shareholder, owning 1,500,000 shares of the
2,207,612 issued and outstanding shares of the Registrant's common stock, or
67.9%.
On February 23, 2004, the Company agreed to pay Little and Company Investment
Securities, an entity owned by Glenn A. Little, the Company's former controlling
shareholder, officer and director, $30,000 in consulting fees related to the
above discussed transaction and in consideration for maintaining the corporate
entity. To formalize this obligation, the Company issued a $30,000 non-interest
bearing promissory note maturing on February 23, 2005. Concurrent with the above
discussed change in control transaction, the Company and Little and Company
Investment Securities executed an "Exchange Agreement" whereby the Company
issued 150,000 shares of unregistered, restricted common stock in satisfaction
of the outstanding promissory note. The Company relied upon Section 4(2) of the
Securities Act of 1933, as amended, for an exemption from registration of these
shares and no underwriter was used in this transaction.
On March 19, 2004, the Company filed a Schedule 14C - Information Statement
Pursuant to Section 14(c) of the Securities Exchange Act of 1934 giving notice
that the Company received written consents in lieu of a meeting from
shareholders representing approximately 93% of our outstanding shares of common
stock approving an amendment and restatement of the Company's Articles of
Incorporation to effect, among other things, a one-for- two reverse split of the
Company's issued and outstanding common stock. There was no change in the par
value of the Company's common stock. This action was effective on April 27, 2004
and is reflected in the Company's accompanying financial statements as of the
first day of the first period presented.
No scrip or fractional certificates were issued in connection with this reverse
stock split. Shareholders who otherwise would be entitled to receive fractional
shares because they hold a number of Old Shares not evenly divisible will have
the number of new shares to which they are entitled rounded down to the nearest
whole number. Holders of less than 2 Old Shares, regardless of the actual number
held, will be entitled, upon surrender of certificate(s) representing such
shares, to a cash payment of $0.20 in lieu thereof. The ownership of a
fractional interest will not give the holder thereof any voting, dividend or
other rights except to receive payment therefore as described herein. The
Company has deposited with it's independent stock transfer agent approximately
$170 to provide the $0.20 payment to the Shareholders that do not receive any
New Shares as a result of this action.
11
Boulder Acquisitions, Inc.
Notes to Financial Statements - Continued
Note H - Common Stock Transactions - Continued
This action caused the issued and outstanding shares to decrease from 2,207,612
to 1,102,956. The effect of this action is reflected in the accompanying
financial statements as of the first day of the first period presented.
Note I - Stock Warrant
As a result of the February 23, 2004 change in control and in consideration for
agreeing to serve as an officer and director of the Company, Timothy P. Halter
was granted a stock warrant to purchase up to 100,000 post-April 27, 2004
reverse split shares of the Company's restricted, unregistered common stock at a
price of $0.40 per share, in reliance upon the exemption from registration set
forth in Section 4(2) of the Securities Act of 1933, as amended. This warrant is
exercisable at any time after its issuance and expires on February 23, 2007. Due
to the uncertainty related to the ultimate exercise for purchase of any shares
covered by this warrant, the Company did not assign any compensation expense
upon the issuance of this warrant.
The following table presents warrant activity through March 31, 2004:
Weighted
Average
Number of Exercise
Shares Price
--------- ---------
Balance at December 31, 2003 -- --
Issued 100,000 $ 0.40
-------
Balance at March 31, 2004 100,000
=======
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12
Part I - Item 2
Management's Discussion and Analysis of Financial Condition and Results of
Operations
(1) Caution Regarding Forward-Looking Information
Certain statements contained in this quarterly filing, including, without
limitation, statements containing the words "believes", "anticipates", "expects"
and words of similar import, constitute forward-looking statements. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
the Company, or industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements.
Such factors include, among others, the following: international, national and
local general economic and market conditions: demographic changes; the ability
of the Company to sustain, manage or forecast its growth; the ability of the
Company to successfully make and integrate acquisitions; raw material costs and
availability; new product development and introduction; existing government
regulations and changes in, or the failure to comply with, government
regulations; adverse publicity; competition; the loss of significant customers
or suppliers; fluctuations and difficulty in forecasting operating results;
changes in business strategy or development plans; business disruptions; the
ability to attract and retain qualified personnel; the ability to protect
technology; and other factors referenced in this and previous filings.
Given these uncertainties, readers of this Form 10-QSB and investors are
cautioned not to place undue reliance on such forward-looking statements. The
Company disclaims any obligation to update any such factors or to publicly
announce the result of any revisions to any of the forward-looking statements
contained herein to reflect future events or developments.
(2) Results of Operations, Liquidity and Capital Resources
Quarters Ended March 31, 2003 and 2002
The Company had no revenue for the respective three month periods ended March
31, 2004 and 2003, respectively.
General and administrative expenses for the quarters ended March 31, 2004 and
2003 were approximately $ 30,000 and $-0-, respectively. The $30,000 in expenses
were consulting fees paid to Little and Company Investment Securities, an entity
owned by Glenn A. Little, the Company's former controlling shareholder, officer
and director, for consulting fees related to a February 23, 2004 change in
control transaction and in consideration for maintaining the corporate entity.
The Company also received interest income of approximately $164 and $4 during
the first quarter of 2004 and 2003, respectively, as a result of invested
working capital funds.
Net income (loss) for the three months ended March 31, 2004 and 2003,
respectively, was approximately $(29,836) and $4. Earnings (loss) per share for
the respective quarters ended March 31, 2004 and 2003 was $(0.05) and $0.00 on
the weighted-average shares issued and outstanding.
The Company does not expect to generate any meaningful revenue or incur
operating expenses for purposes other than fulfilling the obligations of a
reporting company under The Securities Exchange Act of 1934 unless and until
such time that the Company's operating subsidiary begins meaningful operations.
At March 31, 2004 and 2003, respectively, the Company had working capital of
approximately $302,096 and $1,931.
It is the intent of management and significant shareholders to provide
sufficient working capital necessary to support and preserve the integrity of
the corporate entity. However, there is no legal obligation for either
management or significant shareholders to provide additional future funding.
Should this pledge fail to provide financing, the Company has not identified any
alternative sources. Consequently, there is substantial doubt about the
Company's ability to continue as a going concern.
13
The Company's need for capital may change dramatically as a result of any
business acquisition or combination transaction. There can be no assurance that
the Company will identify any such business, product, technology or company
suitable for acquisition in the future. Further, there can be no assurance that
the Company would be successful in consummating any acquisition on favorable
terms or that it will be able to profitably manage the business, product,
technology or company it acquires.
The Company's need for capital may change dramatically as a result of any
business acquisition or combination transaction. There can be no assurance that
the Company will identify any such business, product, technology or company
suitable for acquisition in the future. Further, there can be no assurance that
the Company would be successful in consummating any acquisition on favorable
terms or that it will be able to profitably manage the business, product,
technology or company it acquires.
Plan of Business
----------------
General
-------
The Company intends to locate and combine with an existing, privately-held
company which is profitable or, in management's view, has growth potential,
irrespective of the industry in which it is engaged. However, the Company does
not intend to combine with a private company which may be deemed to be an
investment company subject to the Investment Company Act of 1940. A combination
may be structured as a merger, consolidation, exchange of the Company's common
stock for stock or assets or any other form which will result in the combined
enterprise's becoming a publicly-held corporation.
Pending negotiation and consummation of a combination, the Company anticipates
that it will have, aside from carrying on its search for a combination partner,
no business activities, and, thus, will have no source of revenue. Should the
Company incur any significant liabilities prior to a combination with a private
company, it may not be able to satisfy such liabilities as are incurred.
If the Company's management pursues one or more combination opportunities beyond
the preliminary negotiations stage and those negotiations are subsequently
terminated, it is foreseeable that such efforts will exhaust the Company's
ability to continue to seek such combination opportunities before any successful
combination can be consummated. In that event, the Company's common stock will
become worthless and holders of the Company's common stock will receive a
nominal distribution, if any, upon the Company's liquidation and dissolution.
Combination Suitability Standards
---------------------------------
In its pursuit for a combination partner, the Company's management intends to
consider only combination candidates which are profitable or, in management's
view, have growth potential. The Company's management does not intend to pursue
any combination proposal beyond the preliminary negotiation stage with any
combination candidate which does not furnish the Company with audited financial
statements for at least its most recent fiscal year and unaudited financial
statements for interim periods subsequent to the date of such audited financial
statements, or is in a position to provide such financial statements in a timely
manner. The Company will, if necessary funds are available, engage attorneys
and/or accountants in its efforts to investigate a combination candidate and to
consummate a business combination. The Company may require payment of fees by
such combination candidate to fund the investigation of such candidate. In the
event such a combination candidate is engaged in a high technology business, the
Company may also obtain reports from independent organizations of recognized
standing covering the technology being developed and/or used by the candidate.
The Company's limited financial resources may make the acquisition of such
reports difficult or even impossible to obtain and, thus, there can be no
assurance that the Company will have sufficient funds to obtain such reports
when considering combination proposals or candidates. To the extent the Company
is unable to obtain the advice or reports from experts, the risks of any
combined enterprise's being unsuccessful will be enhanced. Furthermore, to the
knowledge of the Company's officers and directors, neither the candidate nor any
of its directors, executive officers, principal shareholders or general
partners:
14
(1) will have been convicted of securities fraud, mail fraud, tax fraud,
embezzlement, bribery, or a similar criminal offense involving
misappropriation or theft of funds, or be the subject of a pending
investigation or indictment involving any of those offenses;
(2) will have been subject to a temporary or permanent injunction or
restraining order arising from unlawful transactions in securities,
whether as issuer, underwriter, broker, dealer, or investment advisor,
may be the subject of any pending investigation or a defendant in a
pending lawsuit arising from or based upon allegations of unlawful
transactions in securities; or
(3) will have been a defendant in a civil action which resulted in a final
judgement against it or him awarding damages or rescission based upon
unlawful practices or sales of securities.
The Company's officers and directors will make these determinations by asking
pertinent questions of the management of prospective combination candidates.
Such persons will also ask pertinent questions of others who may be involved in
the combination proceedings. However, the officers and directors of the Company
will not generally take other steps to verify independently information obtained
in this manner which is favorable. Unless something comes to their attention
which puts them on notice of a possible disqualification which is being
concealed from them, such persons will rely on information received from the
management of the prospective combination candidate and from others who may be
involved in the combination proceedings.
Item 3 - Controls and Procedures
As required by Rule 13a-15 under the Exchange Act, within the 90 days prior to
the filing date of this report, the Company carried out an evaluation of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures. This evaluation was carried out under the supervision and with
the participation of the Company's management, including the Company's
President, Chief Executive and Chief Financial Officer. Based upon that
evaluation, the Company's President, Chief Executive and Chief Financial Officer
concluded that the Company's disclosure controls and procedures are effective.
There have been no significant changes in the Company's internal controls or in
other factors, which could significantly affect internal controls subsequent to
the date the Company carried out its evaluation.
Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed in Company reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Securities and Exchange
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed in Company reports filed under the Exchange Act is
accumulated and communicated to management, including the Company's Chief
Executive and Chief Financial Officer as appropriate, to allow timely decisions
regarding required disclosure.
Part II - Other Information
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
On February 23, 2004, the Company sold 1,500,000 shares of restricted
common stock at $.20 per share for gross proceeds of $300,000, pursuant to
a subscription agreement, to Halter Financial Group, Inc., an entity owned
by Timothy P. Halter, who became the Company's current Chief Executive
15
Officer. The Company relied upon Section 4(2) of The Securities Act of
1933, as amended, for an exemption from registration of these shares and no
underwriter was used in this transaction. As a result of this transaction,
Halter Financial Group, Inc. became the Company's controlling shareholder,
owning 1,500,000 shares of the 2,207,612 issued and outstanding shares of
the Registrant's common stock, or 67.9%.
On February 23, 2004, the Company agreed to pay Little and Company Investment
Securities, an entity owned by Glenn A. Little, the Company's former controlling
shareholder, officer and director, $30,000 in consulting fees related to the
above discussed transaction and in consideration for maintaining the corporate
entity. To formalize this obligation, the Company issued a $30,000 non-interest
bearing promissory note maturing on February 23, 2005. Concurrent with the above
discussed change in control transaction, the Company and Little and Company
Investment Securities executed an "Exchange Agreement" whereby the Company
issued 150,000 shares of unregistered, restricted common stock in satisfaction
of the outstanding promissory note. The Company relied upon Section 4(2) of the
Securities Act of 1933, as amended, for an exemption from registration of these
shares and no underwriter was used in this transaction.
On March 19, 2004, the Company filed a Schedule 14C - Information Statement
Pursuant to Section 14(c) of the Securities Exchange Act of 1934 giving notice
that the Company received written consents in lieu of a meeting from
shareholders representing approximately 93% of our outstanding shares of common
stock approving an amendment and restatement of the Company's Articles of
Incorporation to effect, among other things, a one-for- two reverse split of the
Company's issued and outstanding common stock. There was no change in the par
value of the Company's common stock. This action was effective on April 27, 2004
and is reflected in the Company's accompanying financial statements as of the
first day of the first period presented.
No scrip or fractional certificates were issued in connection with this reverse
stock split. Shareholders who otherwise would be entitled to receive fractional
shares because they hold a number of Old Shares not evenly divisible will have
the number of new shares to which they are entitled rounded down to the nearest
whole number. Holders of less than 2 Old Shares, regardless of the actual number
held, will be entitled, upon surrender of certificate(s) representing such
shares, to a cash payment of $0.20 in lieu thereof. The ownership of a
fractional interest will not give the holder thereof any voting, dividend or
other rights except to receive payment therefore as described herein. The
Company has deposited with it's independent stock transfer agent approximately
$170 to provide the $0.20 payment to the Shareholders that do not receive any
New Shares as a result of this action.
This action caused the issued and outstanding shares to decrease from 2,207,612
to 1,102,956. The effect of this action is reflected in the accompanying
financial statements as of the first day of the first period presented.
As a result of the February 23, 2004 change in control and in consideration for
agreeing to serve as an officer and director of the Company, Timothy P. Halter
was granted a stock warrant to purchase up to 100,000 post-April 27, 2004
reverse split shares of the Company's restricted, unregistered common stock at a
price of $0.40 per share, in reliance upon the exemption from registration set
forth in Section 4(2) of the Securities Act of 1933, as amended. This warrant is
exercisable at any time after its issuance and expires on February 23, 2007. Due
to the uncertainty related to the ultimate exercise for purchase of any shares
covered by this warrant, the Company did not assign any compensation expense
upon the issuance of this warrant.
Item 3 - Defaults on Senior Securities
None
Item 4 - Submission of Matters to a Vote of Security Holders
The Company has held no regularly scheduled, called or special meetings of
shareholders during the reporting period.
Item 5 - Other Information
None
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Item 6 - Exhibits and Reports on Form 8-K
Exhibits
--------
3.1 Amended and Restated Bylaws of Boulder Acquisitions, Inc
31.1 Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002
32.1 Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
Reports on Form 8-K
-------------------
February 23, 2004
Disclosure of sale of 1,500,000 shares of common stock to Halter
Financial Group, Inc., issuance of warrant to purchase up to 200,000
shares of common stock to Timothy P. Halter and announcement of a
change in control and in executive officers and directors.
--------------------------------------------------------------------------------
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Boulder Acquisitions, Inc.
Dated: April 29, 2004 /s/ Timothy P. Halter
-------------- ------------------------------------
Timothy P. Halter
President, Chief Executive Officer
Chief Financial Officer and Director
17