SEC Filing Summary: Broadleaf Capital Partners, Inc. (10-Q)
Business Context and Reporting Period
This Form 10-Q covers the quarterly periods ended March 31, June 30, and September 30, 2007. The registrant is Broadleaf Capital Partners, Inc., a Nevada corporation and closed-end management investment company. The filing was signed on September 16, 2011, indicating a significant delay in reporting. The Company operates primarily through its parent entity, holding a 1% interest in the Canyon Shadows real estate partnership as its sole active investment. Most subsidiaries are inactive. The Company previously held a Business Development Company (BDC) license, which was rescinded by the SEC in 2004 due to non-compliance.
Key Financial Metrics (As of September 30, 2007)
- Revenue: $5,700 for the nine months ended September 30, 2007 (derived from investment distributions).
- Net Loss: $(21,861) for the nine months ended September 30, 2007.
- Cash and Cash Equivalents: $0 (down from $4,445 as of June 30, 2007).
- Total Assets: $141,598 (consisting entirely of the investment in Canyon Shadows).
- Total Liabilities: $1,527,235.
- Stockholders' Deficit: $(1,385,637).
- Debt: Notes payable total $1,047,954, all classified as current. Accrued interest is $92,618.
- Liquidity: Current liabilities exceed current assets by $1,385,637. The Company has no cash on hand.
Material Changes vs. Prior Period
- Operating Loss: The net loss for the nine months ended September 30, 2007, increased to $(21,861) from $(20,229) in the same period in 2006. This increase is attributed to higher General and Administrative (G&A) expenses ($8,169 vs. $6,534), specifically due to record storage rental costs.
- Cash Position: Cash balances deteriorated significantly, dropping from $4,445 in June 2007 to $0 in September 2007.
- Debt Status: The Company remains in default on two notes payable. While creditors have not pursued legal action, accrued interest continues to accumulate.
- Revenue Stability: Revenue remained flat at approximately $1,900 per quarter, consistent with prior periods, as it is solely derived from the Canyon Shadows investment.
Outlook, Risks, and Contingencies
- Going Concern: The filing explicitly states that the Company's recurring losses, negative cash flows, and stockholders' deficit raise substantial doubt about its ability to continue as a going concern. Continued operations depend on obtaining additional capital or restructuring debt.
- Management Plans: Management intends to raise capital through common stock sales, convert promissory notes to stock, or enter into acquisition agreements with profitable entities. No assurances are provided regarding success.
- Internal Controls: Management concluded that disclosure controls and internal controls over financial reporting were ineffective as of September 30, 2007. Material weaknesses exist due to limited personnel, lack of segregation of duties, and absence of an audit committee.
- Legal Proceedings: There are no open legal proceedings, but the Company has outstanding liabilities from past judgments totaling $78,882 recorded as "Judgments payable."
- Investment Valuation: The sole investment (Canyon Shadows) is valued at cost less distributions. The Board determines fair value in good faith as no ready market exists.
Investor Verification Checklist
- Verify Filing Timeliness: Confirm why a 2007 10-Q was signed in 2011 and check for subsequent filings to ensure the company is current with SEC reporting.
- Assess Debt Default Status: Investigate the current status of the $1.05M in notes payable and whether creditors have initiated collection actions since the filing date.
- Confirm Going Concern Status: Determine if the company has secured the additional financing required to avoid ceasing operations, as indicated in the "Going Concern" note.
- Review Internal Controls: Verify if the material weaknesses in internal controls (lack of audit committee, segregation of duties) have been remediated.
- Validate Investment Value: Confirm the current valuation and distribution status of the Canyon Shadows partnership, which represents 100% of the company's assets.