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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly periods ended March 31, June 30, and September 30, 2005

OR
 [  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number 814-00175

BROADLEAF CAPITAL PARTNERS, INC.
(Exact name of Registrant as specified in its charter)
 
 
Nevada
88-0490034
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification Number)
   
3887 Pacific Street
 
Las Vegas, Nevada
89121
(Address of principal executive offices)
(Zip Code)
 
(702) 650-3000
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
 
 
Yes
   
No
   X
 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

 
 
Yes
X
 
No
   
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
 
    Large accelerated filer  o
Accelerated filer  o
 
    Non-accelerated filer    x
Smaller reporting company  o
 
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 
 
Yes
   
No
X
 
 
As of August 29, 2011 the registrant had 144,419,925 shares of common stock outstanding.
 
 
 
-1-

 

 
Broadleaf Capital Partners, Inc.
INDEX TO FORM 10-Q
PART I.
FINANCIAL INFORMATION
Page
     
Item 1.
Consolidated Financial Statements:
 
     
 
Consolidated Balance Sheets at March 31, 2005 (unaudited), June 30, 2005 (unaudited),
 
 
September 30, 2005 (unaudited) and December 31, 2004 (audited)
4
     
 
Consolidated Schedule of Investments at March 31, 2005 (unaudited), June 30, 2005 (unaudited),
 
 
      September 30, 2005 (unaudited) and December 31, 2004 (audited)
5
     
 
Consolidated Statements of Operations for the  Six Months Ended June 30, 2005 (unaudited)
 
 
and 2004 (unaudited), and the Nine Months ended September 30, 2005 (unaudited) and 2004 (unaudited)
6
     
 
Consolidated Statements of Operations for the Three Months Ended  March 31, 2005
 
 
(unaudited) and 2004 (unaudited), for the Three Months Ended June 30, 2005 (unaudited) and 2004 (unaudited), for the Three Months Ended September 30, 2005 (unaudited) and 2004 (unaudited)
7
     
 
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2005
 
 
 (unaudited) and 2004 (unaudited), for the Six Months Ended June 30, 2005 (unaudited) and 2004 (unaudited), and the Nine Months Ended September 30, 2005 (unaudited) and 2004 (unaudited)
8
     
 
Notes to Consolidated Financial Statements
10
     
Item 2.
Management's Discussion and Analysis of Financial Condition
 
 
and Results of Operations
24
     
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
29
     
Item 4.
Controls and Procedures
29
     
PART II.
OTHER INFORMATION
 
     
Item 1.
Legal Proceedings
30
     
Item 1A.
Risk Factors
31
     
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
33
     
Item 6.
Exhibits
34
     
SIGNATURES
36

 
 
-2-

 

                                 
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
 
Consolidated Balance Sheets
 
                                    ASSETS
                             
           
09/30/05
   
06/30/05
   
03/31/05
   
12/31/04
 
           
Unaudited
   
Unaudited
   
Unaudited
   
Audited
 
CURRENT ASSETS
                               
                                 
   Cash
        $ 0     $ 11,919     $ 4,847     $ 3,957  
                                         
Total Current Assets
      0       11,919       4,847       3,957  
                                         
FIXED ASSETS, NET (Note2, 5)
      0       0       0       0  
                                         
OTHER ASSETS - Investments in limited partnerships -
      781,655       781,655       781,655       781,655  
(Note 2,4,8,9)
                                       
TOTAL ASSETS
    $ 781,655     $ 793,574     $ 786,502     $ 785,612  
                                         
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                               
                                         
CURRENT LIABILITIES
                                       
Accounts payable
    $ 407,736     $ 392,006     $ 421,718     $ 421,118  
Accrued interest
      40,908       34,444       27,980       21,516  
 Judgments payable
          215,145       215,145       215,145       215,145  
Notes payable - current portion (Note 7)
      1,561,258       1,561,258       1,561,258       1,507,887  
                                         
Total Current Liabilities
      2,225,047       2,202,853       2,226,101       2,165,666  
                                         
LONG-TERM DEBT - Notes payable - long term (Note 7)
    0       0       0       0  
                                         
   Total Liabilities
          2,225,047       2,202,853       2,226,101       2,165,666  
                                         
COMMITMENTS AND CONTINGENCIES (Note 8)
                                 
                                         
STOCKHOLDERS' EQUITY (DEFICIT)
                                     
Common Stock authorized at $0.001 par value;
                                 
shares issued and outstanding
09/30/05
    140,473,605                                  
shares issued and outstanding
06/30/05
    140,473,605                                  
shares issued and outstanding
03/31/05
    136,584,717                                  
shares issued and outstanding
12/31/04
    116,461,640                                  
Total Common Shares issued and outstanding, respectively
    140,210       140,210       136,321       116,462  
Additional paid-in capital
      13,875,015       13,875,015       13,848,168       13,831,232  
Stock Subscriptions
      (10,304 )     (10,304 )     (10,304 )     17,500  
Accumulated deficit
      (15,448,313 )     (15,414,200 )     (15,413,784 )     (15,345,248 )
                                           
Total Stockholders' Equity (Deficit)
      (1,443,392 )     (1,409,279 )     (1,439,599 )     (1,380,054 )
                                           
     TOTAL LIABILITIES,  AND
                                       
STOCKHOLDERS' EQUITY (DEFICIT)
    $ 781,655     $ 793,574     $ 786,502     $ 785,612  
                                           
" The accompanying notes are an integral part of these consolidated financial statements."
 


 
-3-

 
                                         
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
 
Consolidated Schedule of Investments
 
                                         
                                         
Other Assets (Note 4,9)
   
Number
                                 
     
Shares Owned
   
Original
                           
Company
Business
 
or %
   
Cost
     
09/30/05
   
06/30/05
   
03/31/05
   
12/31/04
 
                   
Unaudited
   
Unaudited
   
Unaudited
   
Audited
 
                                         
Canyon Shadows
Real Estate
    1 %   $ 1,131,961  
(a)
  $ 781,655     $ 781,655     $ 781,655     $ 781,655  
                                                     
                                                     
TOTAL INVESTMENTS
                      $ 781,655     $ 781,655     $ 781,655     $ 781,655  
                                                     
                     Schedule of Investments - Descriptions
                                                 
                                                     
a) The Company's Investment Committee has valued this investment at cost,
                                   
less cash distributions to the Company from Canyon Shadows.
                                           
                                                     


 
 
-4-

 

                         
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
 
Consolidated Statements of Operations
 
   
For the Nine Months Ended
   
For the Six Months Ended
 
   
09/30/05
   
09/30/04
   
06/30/05
   
06/30/04
 
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
 
                         
REVENUES
  $ 134,711     $ 0     $ 134,078     $ 0  
                                 
EXPENSES
                               
                                 
   General and administrative
    218,384       306,756       190,102       249,340  
   Depreciation (Note 5)
    0       0       0       124  
                                 
     Total Expenses
    218,384       306,756       190,102       249,464  
                                 
NET INVESTMENT INCOME(LOSS)
    (83,673 )     (306,756 )     (56,024 )     (249,464 )
                                 
OTHER INCOME (EXPENSE)
                               
                                 
   Gain on forgiveness of debt
    0       137,248       0       137,248  
   Interest expense
    (19,392 )     (135,597 )     (12,928 )     (84,443 )
   Gain(Loss) on disposal of assets
    0       (9,412 )     0       (9,412 )
   Loss on write off of investments (Note 2)
    0       (3,770 )     0       (3,770 )
                                 
   Total Other Income (Expense)
    (19,392 )     (11,531 )     (12,928 )     39,623  
                                 
INCOME (LOSS) FROM CONTINUING
                               
 OPERARION BEFORE INCOME TAXES
    (103,065 )     (318,287 )     (68,952 )     (209,841 )
                                 
Income taxes (Note 2)
    0       0       0       0  
                                 
NET INCOME (LOSS) FROM
    (103,065 )     (318,287 )     (68,952 )     (209,841 )
 CONTINUING OPERATIONS
                               
                                 
Income(Loss) from Discontinued Operations
    0       (341 )     0       (341 )
                                 
NET INCOME (LOSS)
  $ (103,065 )   $ (318,628 )   $ (68,952 )   $ (210,182 )
                                 
BASIC INCOME (LOSS) PER SHARE
                               
Continuing Operations
    (0.00 )     (0.00 )     (0.00 )     (0.00 )
Discontinued Operations
    0.00       (0.00 )     0.00       (0.00 )
                                 
   Basic Income (Loss) Per Share (Note 2)
    (0.001 )     (0.003 )     (0.001 )     (0.002 )
                                 
WEIGHTED AVERAGE NUMBER OF
                               
 SHARES OUTSTANDING
    138,845,115       94,294,737       135,030,871       90,258,291  
                                 
"The accompanying notes are an integral part of these consolidated financial statements."
 

 
-5-

 



                                     
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
 
Consolidated Statements of Operations
 
         
For the Three Months Ended,
       
   
09/30/05
   
09/30/04
   
06/30/05
   
06/30/04
   
03/31/05
   
03/31/04
 
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
 
                                     
REVENUES
  $ 633     $ 0     $ 87,110     $ 0     $ 46,968     $ 0  
                                                 
EXPENSES
                                               
                                                 
   General and administrative
    28,282       57,292       81,062       116,076       109,040       133,264  
   Depreciation (Note 5)
    0       0       0       0       0       124  
                                                 
     Total Expenses
    28,282       57,292       81,062       116,076       109,040       133,388  
                                                 
NET INVESTMENT INCOME(LOSS)
    (27,649 )     (57,292 )     6,048       (116,076 )     (62,072 )     (133,388 )
                                                 
OTHER INCOME (EXPENSE)
                                               
                                                 
   Gain on forgiveness of debt
    0       0       0       0       0       137,248  
   Interest expense
    (6,464 )     (51,154 )     (6,464 )     (46,693 )     (6,464 )     (37,750 )
   Gain(Loss) on disposal of assets
    0       0       0       (602 )     0       (8,810 )
   Loss on write off of investments (Note 2)
    0       0       0       (3,770 )     0       0  
                                                 
   Total Other Income (Expense)
    (6,464 )     (51,154 )     (6,464 )     (51,065 )     (6,464 )     90,688  
                                                 
INCOME (LOSS) FROM CONTINUING
                                               
 OPERARION BEFORE INCOME TAXES
    (34,113 )     (108,446 )     (416 )     (167,141 )     (68,536 )     (42,700 )
                                                 
Income taxes (Note 2)
    0       0       0       0       0       0  
                                                 
NET INCOME (LOSS) FROM
    (34,113 )     (108,446 )     (416 )     (167,141 )     (68,536 )     (42,700 )
 CONTINUING OPERATIONS
                                               
                                                 
Income(Loss) from Discontinued Operations
    0       0       0       0       0       (341 )
                                                 
NET INCOME (LOSS)
  $ (34,113 )   $ (108,446 )   $ (416 )   $ (167,141 )   $ (68,536 )   $ (43,041 )
                                                 
BASIC INCOME (LOSS) PER SHARE
                                               
Continuing Operations
    (0.00 )     (0.00 )     (0.00 )     (0.00 )     (0.00 )     (0.00 )
Discontinued Operations
    0.00       0.00       0.00       0.00       0.00       (0.00 )
                                                 
   Basic Income (Loss) Per Share (Note 2)
    (0.000 )     (0.001 )     (0.000 )     (0.002 )     (0.001 )     (0.001 )
                                                 
WEIGHTED AVERAGE NUMBER OF
                                               
 SHARES OUTSTANDING
    140,473,605       103,319,159       140,473,605       98,317,703       129,588,136       84,305,306  
                                                 
"The accompanying notes are an integral part of these consolidated financial statements."
 



 
-6-

 

                                     
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
 
Consolidated Statements of Cash Flows
 
                                     
         
For the Nine, Six, and Three Months Ended,
       
   
09/30/05
   
09/30/04
   
06/30/05
   
06/30/04
   
03/31/05
   
03/31/04
 
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
 
CASH FLOWS FROM OPERATING ACTIVITIES
                               
                                     
Net income (loss) from continuing operations
  $ (103,065 )   $ (318,287 )   $ (68,952 )   $ (209,841 )   $ (68,536 )   $ (42,700 )
Adjustments to reconcile net loss to net cash
                                               
used by operating activities:
                                               
Depreciation
    0       214       0       3,250       0       3,126  
(Gain)Loss on disposal of assets
    0       (9,412 )     0       (9,412 )     0       (8,810 )
Common stock issued for services
    0       0       0       0       0       0  
Loss on Discontinued Operations
    0       (341 )     0       (341 )     0       (341 )
                                                 
(Increase) decrease in other assets
    0       53,000       0       53,000       0       0  
(Increase) decrease in accounts receivable
    0       (6,148 )     0       (6,148 )     0       0  
Increase (decrease) in accounts payable
    (13,982 )     (68,160 )     (29,712 )     (116,876 )     0       (60,739 )
Increase (decrease) in Acrued Expenses
    19,392       104,163       12,928       53,009       6,464       (11,715 )
Increase (decrease) in Judgements Payable
    0       0       0       0       0       0  
                                                 
 Net Cash Used in Operating Activities
    (97,655 )     (244,971 )     (85,736 )     (233,359 )     (62,072 )     (121,179 )
                                                 
CASH FLOWS FROM INVESTING ACTIVITIES
                                         
                                                 
Funds received from common stock
                                               
investments and note conversions to stock
    68,131       72,245       68,131       72,245       37,395       33,690  
Receipts of investment disbursements
    0       0       0       0       0       0  
                                                 
 Net Cash Provided (Used) in Investing Activities
    68,131       72,245       68,131       72,245       37,395       33,690  
                                                 
CASH FLOWS FROM FINANCING ACTIVITIES
                                         
                                                 
Repayment of notes payable
    (9,500 )     (5,000 )     (9,500 )     (5,000 )     0       (5,000 )
Net Proceeds from borrowings
    62,871       178,188       62,871       164,014       53,371       104,942  
Proceeds from subscriptions payable
    (27,804 )     0       (27,804 )     0       (27,804 )     0  
Receipt of subscription receivable
    0       0       0       0       0       0  
                                                 
 Net Cash Provided by Financing Activities
  $ 25,567     $ 173,188     $ 25,567     $ 159,014     $ 25,567     $ 99,942  
                                                 
NET INCREASE(DECREASE) IN CASH
  $ (3,957 )   $ 462     $ 7,962     $ (2,100 )   $ 890     $ 12,453  
                                                 
CASH, BEGINNING OF PERIOD
    3,957       111       3,957       3,075       3,957       3,075  
                                                 
CASH, END OF PERIOD
  $ 0     $ 573     $ 11,919     $ 975     $ 4,847     $ 15,528  
                                                 
"The accompanying notes are an integral part of these consolidated financial statements."
 




                                     
BROADLEAF CAPITAL PARTNERS, INC. AND SUBSIDIARIES
 
Consolidated Statements of Cash Flows (Continued)
 
For the Nine, Six, and Three Months Ended,
 
                                     
   
09/30/05
   
09/30/04
   
06/30/05
   
06/30/04
   
03/31/05
   
03/31/04
 
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
 
                                     
SUPPLEMENTAL DISCLOSURE OF CASH
                                   
 FLOW INFORMATION
                                   
                                     
 Interest paid
  $ 0     $ 0     $ 0     $ 0     $ 0     $ 0  
 Income taxes paid
  $ 0     $ 0     $ 0     $ 0     $ 0     $ 0  
                                                 
SUPPLEMENTAL DISCLOSURE OF
                                               
 NON-CASH ACTIVITIES
                                               
                                                 
 Common stock issued in conversion
                                               
 of debts and interest
  $ 32,179     $ 148,690     $ 32,179     $ 148,690     $ 32,179     $ 0  
 Common stock issued for services
  $ 0     $ 0     $ 0     $ 0     $ 0     $ 0  
 Common Stock Issued on debt conversions
                                               
 Common stock issued for subscriptions
  $ 0     $ 0     $ 0     $ 0     $ 0     $ 0  
 Common stock issued for settlements
  $ 0     $ 0     $ 0     $ 0     $ 0     $ 0  
                                                 
                                                 
"The accompanying notes are an integral part of these consolidated financial statements."
 
                                                 
                                                 




 
-7-

 



 
NOTE 1 -COMPANY BACKGROUND

The  consolidated  financial  statements  include  those  of  Broadleaf Capital Partners, Inc., a Nevada company, (Broadleaf), and its  wholly owned   subsidiaries,   Peacock  Real  Estate  Development  Corporation (PREDC), Peacock International  Corporation (PIC), DotCom Ventures, LLC (DotCom), Peacock Sports, Inc. (PSI), Broadleaf Asset Management (BAM), Broadleaf Financial Services (BFS), Silverleaf Venture Fund, LLC (SVF) and Brand Asset Management (Brand). The consolidated financial statements  also  include its majority-owned subsidiaries, Bay Area Soccer Development Corporation (Bay Area) (70%), Orange County Soccer Development Corporation (Orange)  (70%), Riverside County   Soccer   Development   Corporation   (Riverside)  (53%),   and iNetPartners, Inc. (iNet) (51%). Collectively,  they  are  referred  to herein as "the Company".

PREDC,  a  wholly-owned  subsidiary,  was originally formed on July 29, 1993. On October 22, 1999, the name was  changed from Peacock Financial Corporation   (California)   to   Peacock   Real   Estate   Development Corporation. PREDC has had no significant operations since inception.

PIC, a wholly-owned subsidiary, was formed on December  8, 1997. It has had  no  operations  to  date,  but  was formed to invest and trade  in securities on an international basis.

DotCom was organized on July 23, 1999. Peacock acquired its initial 50% ownership with an initial investment of  $112,203.  On January 5, 2000, the Company acquired the remaining 50% ownership by granting options to acquire a total of 500,000 restricted common shares of  the  Company at $0.10 per share. DotCom was organized for the purposes of conducting an internet production company and to consult start-up and emerging growth companies  with  their  internet  strategies.  DotCom  had  no  operations since 2003.

PSI was incorporated  in January 2000 to hold and manage investments in professional sports. During  the  years  ended December 31, 2003, 2002, and 2001, PSI had no significant operations.

In  January 2000, the Company acquired an 85%  ownership  interest  for $50,000  cash in Orange County Soccer Development Corporation (Orange). The  investment  was  recorded  as  a  purchase.   Orange  discontinued operations effective December 31, 2000.

In February  2000,  the  Company acquired an 85% ownership interest for $100,000 cash in Bay Area  Soccer  Development  Corporation (Bay Area). The investment was recorded as a purchase. Effective December 31, 2000, Bay Area discontinued its operations.

In  February  2000,  the Company acquired a 53% ownership  interest  in Riverside County Soccer Development Corporation (Riverside) for $6,000. The investment was recorded as a purchase. Effective December 31, 2000, Riverside discontinued its operations.

Broadleaf holds a 51%  interest  in  iNet as of December 31, 2001. iNet was organized under the laws of the State of California on December 15, 1999 with the intent to develop Internet  e-commerce  applications  for both  the new and used automotive markets. Effective December 31, 2000, iNet had no significant operations.

On May 23, 2002 Storage Suites America was formed as a wholly owned subsidiary to take advantage of the growing self storage trend. During 2002 it was decided Broadleaf could not provide the capital and management support needed by Storage Suites America to implement their business plan. During March 2003 the Storage Suites America entity was sold by Broadleaf.

Silverleaf Venture Fund, LLC was formed on July 29, 2003 as a wholly owned subsidiary. The company had a limited history and briefly acquired shares in small micro cap companies during 2003 and 2004. However, due the lack of liquidity and markets available willing to buy these investments, they were written down to zero market value based on management recommendations and has had no significant operations since 2004.

Broadleaf’s remaining subsidiaries,  BAM,  BFS,  and  Brand, were all incorporated  in  2001.  These subsidiaries have had no operations  to date, and management is currently evaluating its alternatives for these companies.


 
-8-

 
 
 
NOTE 1 - COMPANY BACKGROUND (Continued)

On  September  15,  1998,  the  Company  filed with the Securities  and Exchange  Commission  to become a Business Development  Corporation  as defined under the Investment  Act  of 1940. Simultaneously, the Company registered an offering circular with  the  SEC for 13,000,000 shares of common stock under Regulation E of the Investment  Act to raise capital and  to  make  investments  in  real  estate and in eligible  portfolio companies. The Company participates in  the  formation  of, and invests in, emerging or early-stage companies in various fields of  business by arranging   for  and  contributing  capital  and  providing  management assistance. During 2004 the Company had failed to comply with Business Development Company requirements while trying to maintain business operations and the Business Development License has been rescinded by the SEC.
 
From December 2000 through 2006 the Company did not have a permanent President but was run by interim President Robert A. Braner who was also Chairman of the Board during the same time. The Company has since hired a permanent President and restored its normal management structure.

The Company currently continues operations of its active holdings, all in the parent Company structure and not its subsidiaries which are currently inactive and being held for future ventures. Also, the Company is actively looking for opportunities to utilize its tax assets.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation.
 
Broadleaf  Capital  Partners,   Inc.  (the  Company)  is  a  closed-end management investment company organized  as  a  Nevada corporation.  Although  these types of company’s should prepare their financial statements  in conformity with accounting principles generally accepted in the United  States of America, and are subject to audit as are other investment companies,  the statement presentation of some companies may need  to  be tailored to present  the  information  in  a  manner  most meaningful  to  their  particular  group  of investors. Since debt is a significant item, the Company concluded that  a  balance sheet would be more  appropriate  than  a statement of net assets. Also,  the  Company believes Article 5 of Regulation S-X applies.

FASB Codification:
 
In June 2009, the FASB issued ASC 105, Generally Accepted Accounting Principles, (“Codification”) effective for interim and annual reporting periods ending after September 15, 2009. This statement establishes the Codification as the source of authoritative accounting principles used in the preparation of financial statements in conformity with generally accepted accounting principles. The Codification does not replace or affect guidance issued by the SEC or its staff. As a result of the Codification, the references to authoritative accounting pronouncements included herein in this Annual Report now refer to the Codification topic section rather than a specific accounting rule as was past practice.

Principles of Consolidation: 

The  consolidated  financial  statements  include  those  of  Broadleaf Capital  Partners,  Inc.,  a  Nevada corporation, and its  wholly-owned subsidiaries, Peacock Real Estate  Development Corporation (California) (PREDC),  Peacock  International Corporation  (Bahamas)  (PIC),  DotCom Ventures, LLC (DotCom),  Peacock  Sports,  Inc.  (PSI), Silverleaf Venture Fund. LLC (SVF), Broadleaf Asset Management (BAM), Broadleaf Financial Services (BFS),  and  Brand Asset Management  (Brand). They also include the majority owned subsidiaries, Bay Area Soccer Development Corporation (Bay Area) (80%), Orange County Soccer Development  Corporation (Orange) (85%), Riverside County Soccer Development Corporation  (Riverside)  (53%),  and  iNet  Partners, Inc. (iNet)  (51%).  All  significant intercompany accounts and transactions have been eliminated.


 
-9-

 
 
 
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Use of Estimates:

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Risk and Uncertainties:

Our future results of operations and financial condition will be impacted by the following factors, among others: our lack of capital resources, dependence on third-party management to operate the companies in which we invest and dependence on the successful development and marketing of any new products in new and existing markets. Generally, we are unable to predict the future status of these areas of risk and uncertainty. However, negative trends or conditions in these areas could have an adverse affect on our business.

Cash and Cash Equivalents:

For financial statement presentation purposes, short-term, highly liquid investments with original maturities of three months or less are considered to be cash equivalents. The Company maintains its cash accounts at all times at levels that do not exceed the insurable FDIC limit, but management believes that there is little risk of loss.

Fair Value of Financial Instruments:

In September 2006, the Financial Accounting Standards Board (FASB) introduced a framework for
measuring fair value and expanded required disclosure about fair value measurements of assets and liabilities.  The Company adopted the standard for those financial assets and liabilities as of the beginning of the 2008 fiscal year and the impact of adoption was not significant. FASB Accounting Standards Codification (ASC) 820 “ Fair Value Measurements and Disclosures ” (ASC 820) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
 
Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for  identical, unrestricted assets or liabilities.
Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability; either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g. interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3—Inputs that are both significant to the fair value measurement and unobservable.

The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.  These financial instruments include investments in available-for-sale securities and accounts payable and accrued expenses.    The Company has also applied ASC 820 for all non-financial assets and liabilities measured at fair value on a non-recurring basis. The adoption of ASC 820 for non-financial assets and liabilities did not have a significant impact on the Company’s financial statements.

 

 
-10-

 
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Investments:

The Company's loans, net of participations  and  any unearned discount, are considered investments under the 1940 Act and  are recorded at fair value. Since no ready market exists for these loans,  the fair value is determined in good faith by the Board of Directors. In  determining the fair value, the Company and Board of Directors consider factors such as the financial condition of the borrower, the adequacy of the collateral and individual credit risks.

Investments   in   equity   securities  are  recorded  at  fair  value, represented  as  cost,  plus  or   minus   unrealized  appreciation  or depreciation,  respectively. The carrying values  of  investments  that have no readily-determinable  market values are determined by the Board of Directors, based upon its analysis of the assets and revenues of the underlying invested companies.

Because  of  the  inherent uncertainty  of  valuations,  the  Board  of Directors' estimates  of  the  values  of  the  investments  may differ significantly  from  the  values that would have been used had a  ready market  for  the investments  existed  and  the  differences  could  be material.

Comprehensive Income:

ASC Topic 220 (SFAS No. 130) establishes standards for reporting comprehensive income and its components. Comprehensive income is defined as the change in equity during a period from transactions and other events from non-owner sources.  Per the consolidated financial statements, the Company has purchased available-for-sale securities that are subject to this reporting.

Other-Than-Temporary Impairment:

All of our non-marketable and other investments are subject to a periodic impairment review. Investments are considered to be impaired when a decline in fair value is judged to be other-than-temporary. The indicators that we use to identify those events and circumstances include:
  
 
· the investee’s revenue and earnings trends relative to predefined milestones and overall business prospects;
 
· When events or changes in circumstances indicate that long-lived assets other than goodwill may be impaired, an evaluation is performed to determine if a write-down to fair value is required. When an asset is classified as held for sale, the asset's book value is evaluated and adjusted to the lower of its carrying amount or fair value less cost to sell. In addition, depreciation and amortization ceases while it is classified as held for sale.
 
· the general market conditions in the investee’s industry or geographic area, including regulatory or economic changes;
 
· factors related to the investee’s ability to remain in business, such as the investee’s liquidity, debt ratios, and the rate at which the investee is using its cash; and
 
· the investee’s receipt of additional funding at a lower valuation. If an investee obtains additional funding at a valuation lower than our carrying amount or a new round of equity funding is required for the investee to remain in business, and the new round of equity does not appear imminent, it is presumed that the investment is other than temporarily impaired, unless specific facts and circumstances indicate otherwise.

Recently Issued Accounting Pronouncements:

In May 2009, the FASB issued SFAS No. 165, Subsequent Events (“SFAS 165” or ASC 855).  SFAS 165 (ASC 855) establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued.  SFAS 165 (ASC 855) sets forth (1) The period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (2) The circumstances
 
under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and (3) The disclosures that an entity should make about events or transactions that
 


 
-11-

 
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

occurred after the balance sheet date.  SFAS 165 (ASC 855) was effective for interim or annual financial periods ending after June 15, 2009.
 
In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162 (“SFAS 168” or ASC 105-10).  The FASB Accounting Standards Codification (“Codification”) will be the single source of authoritative

Non-governmental U.S. generally accepted accounting principles.  Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants.  SFAS 168 (ASC 105-10) was effective for interim and annual periods ending after September 15, 2009.  All existing accounting standards are superseded as described in SFAS 168.  All other accounting literature not included in the Codification is non-authoritative. Existing GAAP was not intended to be changed as a result of the Codification, and accordingly the change did not impact our financial statements. The ASC does change the way the guidance is organized and presented.

In October 2009, the FASB issued Accounting Standard Update (“ASU”) No. 2009-13, Multiple-Deliverable Revenue Arrangements (“ASU 2009-13. This standard updates FASB ASC 605, Revenue Recognition (“ASC 605”). The amendments to ASC 605 requires entities to allocate revenue in an arrangement using estimated selling prices of the delivered goods and services based on a selling price hierarchy. These amendments to ASC 605 should be applied on a prospective basis for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, with early adoption permitted. The Company adopted these amendments on January 1, 2010.  Management does not believe that the adoption of this standard will have any impact on the Company’s financial statements. 
 
In January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and Disclosures (“ASU 2010-06”).  This standard updates FASB ASC 820, Fair Value Measurements (“ASC 820”). ASU 2010-06 requires additional disclosures about fair value measurements including transfers in and out of Levels 1 and 2 and separate disclosures about purchases, sales, issuances, and settlements relating to Level 3 measurements. It also clarifies existing fair value disclosures about the level of desegregations and about inputs and valuation techniques used to measure fair value. The standard is effective for interim and annual reporting periods beginning after December 15, 2009 except for the disclosures about purchases, sales, issuances and settlements which is effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years.  The Company adopted ASU 2010-06 on January 1, 2010, which had no material impact on the financial statements. Other recent accounting pronouncements issued by the FASB (including its EITF), the AICPA, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

Revenue and Cost Recognition:

The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. The Company also receives shares in certain  companies for providing capital and  investment  services.  Therefore when this type of income is recognized, the Company records  it as management  consulting income based on the fair value of the shares received.

Fixed Assets:

Fixed assets are recorded  at cost. Major additions and improvement are capitalized. The cost and related accumulated depreciation of equipment retired or sold are removed  from  the  accounts  and  any  differences between  the  undepreciated  amount and the proceeds from the sale  are recorded as gain or loss on sale  of  assets.  Depreciation is computed using the straight-line method over the estimated useful life of the assets as follows:

Description     Estimated Useful Life

        Furniture and fixtures          5 to 7 years
        Computers and software          5 years
        Automobiles                            5 years

 
-12-

 
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Most of the fixed assets of the company have been retired during the 2005 fiscal year and, the related costs and accumulated depreciation have been removed from the accounts and any gain or loss was recognized during that period.
 
Reclassifications:

Certain reclassifications have been made to prior year balances to conform to the current year presentation.

Net Income (Loss) Per Share:

In addition to Net Asset Values the Company reports basic and diluted earnings per share (EPS) according to the provisions of ASC Topic 260, which requires the presentation of basic EPS and, for companies with complex capital structures, diluted EPS. Basic EPS excludes dilution and is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income (loss) available to common stockholders, adjusted by other changes in income or loss that would result from the assumed conversion of those potential common shares, by the weighted number of common shares and common share equivalents (unless their effect is antidilutive) outstanding. Common stock equivalents are not included in the computation of diluted earnings per share when the Company reports a loss because to do so would be antidilutive. Thus, these equivalents are not included in the calculation of diluted loss per share, resulting in basic and diluted loss per share being equal. The following is a reconciliation of the computation for basic and diluted EPS for the quarters ended September 30, 2005 through March 31, 2005:

 
                   
   
09/30/05
   
06/30/05
   
03/31/05
 
                   
Net Income (Loss)
  $ (103,065 )   $ (68,952 )   $ (68,536 )
                         
Weighted-average common shares outstanding  basic:
                       
                         
Weighted-average common stock
    136,845,115       135,030,871       129,588,136  
Equivalents
                       
  Stock options
    -       -       -  
  Warrants
    -       -       -  
  Convertible Notes
    -       -       -  
Weighted-average common shares
                       
outstanding- diluted
    136,845,115       135,030,871       129,588,136  
                         


 

 
-13-

 
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Taxes:

The Company, a C-corporation, accounts for income taxes under ASC Topic 740 (SFAS No. 109)  Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
 
The Company adopted the provisions of FASB ASC 740-10 “ Uncertainty in Income Taxes ” (ASC 740-10), on January 1, 2007. The Company has not recognized a liability as a result of the implementation of ASC 740-10. A reconciliation of the beginning and ending amount of unrecognized tax benefits has not been provided since there is no unrecognized benefit since the date of adoption. The Company has not recognized interest expense or penalties as a result of the implementation of ASC 740-10.  If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.

Currently the Company has projected $14,404,425 as of December 31, 2010 in Net Loss Operating Loss carryforwards available. The benefits of the potential tax savings will be recognized in the financial statements upon the acquisition or development of revenue source to apply against these losses. The company recognizes that the Internal Revenue Service has the final determination of the NOL available going forward and that amount may be significantly different from that recorded to date.

 
The  net operating loss carry forwards for federal income tax purposes will expire between 2010 and 2019.  Generally, these can be carried forward and applied against future taxable income at the tax rate applicable at that time. We are currently using a 35% effective tax rate for our projected available net operating loss carryforward. However, as a result of potential stock offerings and stock issuance in connection with potential acquisitions, as well as the possibility of the Company not realizing it’s business plan objectives and having future taxable income to offset, the Company’s use of these NOLs may be limited under the provisions of Section 382 of the Internal Revenue Code of 1986, as amended.  The Company is in the process of evaluating the implications of Section 382 on its ability to utilize some or all of its NOLs.

Components of Net Operating Loss and Valuation allowance are as follows:
                   
Net deferred tax assets consist of the following components as of
 
 
             
   
09/30/05
   
06/30/05
   
03/31/05
 
                   
    Deferred tax assets:
                 
       Beginning  NOL Carryover
    14,792,921       14,792,921       14,792,921  
                         
Adjusted Taxable Income
    (103,065 )     (68,952 )     (68,536 )
                         
    Valuation allowance
    0       0       0  
                         
       Ending  NOL Carryover
    14,689,856       14,723,969       14,724,385  
                         
    Tax Benefit Carryforward
    5,141,450       5,153,389       5,153,535  
                         
    Valuation allowance
    (5,141,450 )     (5,153,389 )     (5,153,535 )
                         
    Net deferred tax asset
    0       0       0  
                         
Net Allowance
    5,141,450       5,153,389       5,153,535  
                         



 
-14-

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In accordance with FASB ASC 740 “Income Taxes”, valuation allowances are provided against deferred tax assets, if based on the weight of available evidence, some or all of the deferred tax assets may or will not be realized. The Company has evaluated its ability to realize some or all of the deferred tax assets on its balance sheet and has established a valuation allowance in the amount of $5,537,691 at December 31, 2004 and estimated changes to the valuation allowance by the projected profit of loss for each period included in these financial statements in the table above. The allowance is calculated for each period as equal to the full potential tax benefits of the any NOL tax carryforwards.

NOTE 3 - GOING CONCERN

As reported in  the  consolidated financial statements, the Company has an accumulated deficits  of  $15,448,313  as of September 31, 2010, $15,414,200 as of June 30, 2005, and $15,413,784 as of March 31, 2005. The Company also has certain debts that  have been  in default during these periods although the creditors have not pursued collection proceedings. The Company's stockholders' deficit at September  30,  2005  was $1,443,392, at June 30, 2005 was $1,409,279, at March 31, 2005 was $1,439,599 and its current liabilities  exceeded  its current assets by $2,225,047 on September 30, 2005 and by $2,190,934 on June 30, 2005 and by $2,221,254,000 on March 31, 2005. These trends have been consistent right up through the most current 10K filed for the year ended December 31, 2010, respectively.

These  factors  create  uncertainty  about  the  Company's  ability  to continue as a going concern. The ability of the Company to continue  as a  going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable  to  obtain  adequate  capital  it  could  be  forced  to  cease operations.

In  order to continue as a going concern, develop and generate revenues and achieve  a  profitable  level of operations, the Company will need, among other things, additional capital resources. Management's plans to obtain such resources for the  Company  include  (1) raising additional capital through sales of common stock, (2) converting  promissory notes into  common  stock  and (3) entering into acquisition agreements  with profitable  entities  with   significant   operations.   In   addition, management  is  continually  seeking  to streamline its operations  and expand  the business through a variety of  industries,  including  real estate and financial management. However, management cannot provide any assurances  that the Company will be successful in accomplishing any of its plans.

The ability of  the Company to continue as a going concern is dependent upon its ability  to successfully accomplish the plans described in the preceding paragraph  and  eventually  secure other sources of financing and   attain  profitable  operations.  The accompanying   consolidated financial  statements  do  not  include  any  adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 - INVESTMENTS IN LIMITED PARTNERSHIPS

During 1995,  the  Company received a $975,000 loan that converted to a grant from the City of Riverside to acquire and rehabilitate a 120-unit apartment complex (see  Note  9).  During April  1996, the Company was awarded  $2,400,000 in Federal tax credits relating  to  this  project. During December  1996,  the Company sold the completed project to a tax credit partnership named  Canyon Shadows, L.P., retaining a 1% interest as general partner, and receiving  a  $905,000  capital  account in the partnership.  During  1999,  a  $70,000  note  held by the Company  was transferred to Canyon Shadows, L.P., which was recorded  as  a  capital distribution  to  the  Company  (see  Note  9).  Additional  costs were incurred  by  the Company on behalf of the partnership resulting  in  a total investment  in Canyon Shadows, L.P. of $1,131,961 at December 31, 2000. The Company's  Board  of  Directors  determined that the value of this investment approximated the current interest  in  the partnership. The  valuation  was  based  upon  projected  future  occupancy  of  the apartment  unit.  In 2002, Canyon Shadows distributed $101,422  to  the Company, leaving a  balance  of  $937,424 at December 31, 2002.  During the  year  ended  December  31, 2003,  Canyon  Shadows  distributed  an additional  $134,176 to the Company,  while  the  Company  invested  an additional $12,734 into the Investment.

 
 
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NOTE 4 - INVESTMENTS IN LIMITED PARTNERSHIPS (Continued)

On May 26, 2003  the Company entered into a Memorandum of Understanding with an individual  whereby the Company is to organize a subsidiary and sell a 21% interest in  the  subsidiary to the individual for $200,000. Immediately thereafter, the Company would transfer the control of the Canyon Shadows LP to the new subsidiary.  Thereafter, the individual is to  be  entitled  to  21%  of the quarterly distributions  from  Canyon  Shadows LP or $5,000 whichever  is  greater.   As of December 31, 2004, the individual had their investment reclassified as a note payable secured against the property with the same income provisions.  The Company has been accruing payments to the individual totaling 21% of the Company's monthly distribution from the Canyon Shadows investment.

NOTE 5 - FIXED ASSETS

                   
Fixed assets consist of the following:
                 
                   
For the Periods Ended,
 
09/30/05
   
06/30/05
   
03/31/05
 
                   
     Furniture and fixtures
  $ 0     $ 0     $ 0  
     Computers and software
    3,500       3,500       3,500  
     Other equipment
    400       400       400  
                         
      3,900       3,900       3,900  
                         
     Accumulated depreciation
    3,900       3,900       3,900  
     Current depreciation expense
    0       0       0  
                         
      3,900       3,900       3,900  
                         
     Net fixed assets
  $ 0     $ 0     $ 0  
                         
                         
Most Fixed Assets were retired during the reduction of operations in 2005
 
                         

NOTE 6 - RELATED PARTY TRANSACTIONS

The Company is a partner in several limited partnerships (Note 4). The Company occasionally pays for operating expenses of the partnerships and is reimbursed as funds become available to the partnerships.  The Company received a $30,000 loan from director Donna Steward in 2004 as stated in note 7.  Additionally, the Company uses 500 square feet of office space from its Interim President rent free. There are no commitments attached to this space.
 

 
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NOTE 7 – NOTES PAYABLE

                         
Notes payable consist of the following for the periods ended;
 
09/30/05
   
06/30/05
   
03/31/05
   
12/31/04
 
                         
    Note payable at 5%, secured
                       
      by an assignment of
                       
      partnership cash, interest
                       
      payable quarterly, principal due