SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

                                   FORM 10QSB


                  Quarterly Report under Section 13 or 15(d) of
                       the Securities Exchange Act of 1934


For Quarter Ended                                      Commission File Number
June 30, 1998                                          0-22273


                     BOULDER CAPITAL OPPORTUNITIES III, INC.
             (Exact name of registrant as specified in its charter)


            COLORADO                                      84-1383888
            (State of incorporation)                      (I.R.S. Employer
                                                          Identification No.)

                 15662 COMMERCE LANE, HUNTINGTON BEACH, CA 92649
                  (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (714) 895-0944


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 the  filing
requirements for at least the past 90 days.

                          Yes  X                     No   ___

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

                  1,600 Preferred Class A shares as of June 30, 1998
                  6,010,000 Common shares as of June 30, 1998


<PAGE>
<TABLE>
<CAPTION>



                                         BOULDER CAPITAL OPPORTUNITIES III, INC.
                                              (A DEVELOPMENT STAGE COMPANY)
                                UNAUDITED BALANCE SHEET FOR THE SIX MONTHS ENDED JUNE 30,

<S>                                                                        <C>                      <C>   
ASSETS                                                                           1997                       1998
                                                                           -----------------------  -----------------

CURRENT ASSETS
Cash                                                                              $(3,272)                 $1,456,728
Accounts Receivable                                                                  6,100                    269,784
Inventories                                                                      1,861,934                  1,885,985
Related Party Receivable                                                         5,600,000                     56,519
                                                                           ----------------           ----------------
TOTAL CURRENT ASSETS                                                             7,464,762                  3,669,015

PROPERTY, PLANT & EQUIPMENT
Property, Plant & Equipment                                                      3,959,692                  3,391,913
Less Accumulated Depreciation                                                    (590,795)                  (774,910)
                                                                           ----------------           ----------------
NET PROPERTY, PLANT & EQUIPMENT                                                  3,368,897                  2,617,003

OTHER ASSETS
Deposits                                                                             1,302                      1,200
Investment in Joint Venture                                                                                   941,732
Research & Development Capital
                                                                           ----------------           ----------------
TOTAL OTHER ASSETS                                                                   1,302                    942,932

                                                                           ----------------           ----------------
TOTAL ASSETS                                                                   $10,834,961                 $7,228,950
                                                                           ================           ================

LIABILITIES AND STOCKHOLDER'S EQUITY

CURRENT LIABILITIES
Accounts Payable                                                                   $31,443                    $60,813
Accrued Interest                                                                    12,228                     55,667
Other Payables                                                                      59,511                     79,877
                                                                           ----------------           ----------------
TOTAL CURRENT LIABILITIES                                                          103,181                    196,357

LONG TERM LIABILITIES
Long Term Debt                                                                     765,691
Related Party Note                                                                 630,000                    600,000
                                                                           ----------------           ----------------
                                                                                 1,395,691                    600,000

STOCKHOLDER'S EQUITY
Preferred stock, no par value
10,000,000 shares authorized,
1,600 issued and outstanding                                                             -                  1,500,000
Common stock, par value $0.0001
100,000,000 shares authorized,
6,010,000 issued and outstanding                                                 9,635,767                      6,010
Paid in Capital                                                                                             5,802,261
Retained Earnings (Deficit)                                                      (299,678)                  (875,678)
                                                                           ----------------           ----------------
TOTAL STOCKHOLDER'S EQUITY                                                       9,336,089                  6,432,593

                                                                           ----------------           ----------------
TOTAL LIABILITIES AND STOCKHOLDER'S                                            $10,834,961                 $7,228,950
EQUITY
                                                                           ================           ================



</TABLE>


<PAGE>
<TABLE>
<CAPTION>



                                              BOULDER CAPITAL OPPORTUNITIES III, INC.
                                                    (A DEVELOPMENT STAGE COMPANY)
                                                 UNAUDITED STATEMENT OF OPERATIONS
                                                 FOR THE SIX MONTHS ENDED JUNE 30,



<S>                                                                  <C>                              <C> 
                                                                           1997                             1998
                                                                     ----------------                 -----------------
REVENUES
Operating Revenues                                                            $47,411                         $222,194
                                                                     -----------------                -----------------
TOTAL REVENUES                                                                 47,411                          222,194

COST OF GOODS SOLD
Cost of Sales                                                                  22,194                           64,464
                                                                     -----------------                -----------------
TOTAL COST OF GOODS SOLD                                                       22,194                           64,464

OPERATING COSTS
Advertising & Marketing                                                         8,024                           23,548
Legal & Professional                                                           16,983                           32,644
Research & Development                                                                                         196,780
General & Administrative                                                       46,845                          336,355
                                                                     -----------------                -----------------
TOTAL OPERATING COSTS                                                          71,852                          589,327

OTHER INCOME (EXPENSE)
Interest Income                                                                    37                            7,811
Other Income                                                                       25                            4,500
Interest Expense                                                                (323)                         (34,000)
                                                                     -----------------                -----------------
TOTAL OTHER INCOME (EXPENSE)                                                    (261)                         (21,689)

NET INCOME (LOSS)                                                           $(46,897)                       $(453,287)
                                                                     =================                =================

Net Loss per Share                                                             (0.01)                           (0.08)
Weighted Average Common Shares                                              6,010,000                        6,010,000


</TABLE>


<PAGE>
<TABLE>
<CAPTION>




                                            BOULDER CAPITAL OPPORTUNITIES III, INC.
                                                 (A DEVELOPMENT STAGE COMPANY)
                                               UNAUDITED STATEMENT OF CASH FLOWS
                                               FOR THE SIX MONTHS ENDED JUNE 30,



<S>                                                                        <C>                           <C> 
                                                                                1997                       1998
                                                                           ---------------               -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss                                                                        $(46,897)                 $(453,287)

Adjustments to reconcile net loss to
cash used in operating activities:
Depreciation
(Increase) Decrease in current assets                                         (5,758,866)                  (212,017)
Increase (Decrease) in current liabilities                                      (241,885)                   (42,939)
(Increase) Decrease in other assets                                                                        (100,212)
                                                                           ---------------           ----------------

NET CASH PROVIDED (USED) BY                                                   (6,047,648)                  (808,455)
OPERATING ACTIVITIES

CASH FLOWS FROM INVESTING ACTIVITIES
(Purchase) Sale of property and equipment                                       (139,110)                     68,231
Increase (Decrease) in notes payable                                              845,000                          -
Capital received                                                                5,337,824                  1,533,012
                                                                           ---------------           ----------------
NET CASH FLOWS FROM INVESTING                                                   6,043,714                  1,601,243
ACTIVITIES

NET INCREASE (DECREASE) IN CASH                                                   (3,934)                    792,788

CASH AT BEGINNING OF PERIOD                                                           662                    663,940

CASH AT END OF PERIOD                                                            $(3,272)                 $1,456,728
                                                                           ===============           ================

</TABLE>


<PAGE>
<TABLE>
<CAPTION>




                                                  BOULDER CAPITAL OPPORTUNITIES III, INC.
                                                       (A DEVELOPMENT STAGE COMPANY)
                                                    UNAUDITED STATEMENT OF CHANGES IN
                                               STOCKHOLDER'S EQUITY FOR THE PERIOD FROM
                                            NOVEMBER 27, 1996 (INCEPTION) THROUGH JUNE 30, 1998


<S>                           <C>             <C>              <C>                <C>                <C>                <C>


                               Preferred         Stock             Common            Stock $           Accumulated          Total
                               No./shares        Amount          No./shares           Amount             Deficit
                              -------------   ------------     --------------     --------------     ---------------    ------------

Balance at November 27, 1996        -                -                  -                  -                   -                -

Common stock issued for
services, at inception,
at $0.0025 per share                -                -            710,000              1,775                   -            1,775

Common stock issued for
cash at $0.0025 per share           -                -            100,000                250                   -              250

Common stock issued for
cash at $0.04 per share             -                -            200,000              8,000                   -            8,000

Net loss for the period
ended December 31, 1996             -                -                  -                  -             (4,527)          (4,527)
                             -------------     ------------     --------------     --------------     ---------------    -----------

Balance at December 31, 1996        -                -          1,010,000             10,025             (4,527)            5,498

Common stock issued for
acquisition of Sonic Jet
Performance LLC                     -                -          5,000,000          5,765,234                            5,765,234

Net loss - year ended
December 31, 1997                   -                -                  -                  -           (417,864)        (417,864)
                             -------------     ------------     --------------     --------------     ---------------   ------------

Balance at December 31, 1997        -                -          6,010,000          5,775,259           (422,391)        5,352,868


Additional Capital
Contributed                         -                -                  -             33,012                   -           33,012

Issuance of Preferred Stock     1,600        1,500,000                  -                                      -        1,500,000


Net loss - period ended
June 30, 1998                       -                -                  -                  -           (453,287)        (453,287)
                             -------------   ------------     --------------     --------------     ---------------   ------------

Balance at June 30, 1998        1,600        1,500,000          6,010,000          5,808,271           (875,678)        6,432,593

                             =============   ============     ==============     ==============     ===============   ============


</TABLE>



<PAGE>
<TABLE>
<CAPTION>




                                            BOULDER CAPITAL OPPORTUNITIES III, INC.
                                                 (A DEVELOPMENT STAGE COMPANY)
                                               UNAUDITED STATEMENT OF OPERATIONS
                                              FOR THE THREE MONTHS ENDED JUNE 30,



<S>                                                                        <C>                       <C>           

                                                                                 1997                     1998
                                                                            -------------            ---------------
REVENUES
Operating Revenues                                                                $22,264                  $152,628
                                                                            --------------           ---------------
TOTAL REVENUES                                                                     22,264                   152,628

COST OF GOODS SOLD
Cost of Sales                                                                       8,402                    38,696
                                                                            --------------           ---------------
TOTAL COST OF GOODS SOLD                                                            8,402                    38,696

OPERATING COSTS
Advertising & Marketing                                                             3,340                       690
Legal & Professional                                                                6,991                    25,479
Research & Development                                                                                      135,775
General & Administrative                                                           23,344                   243,560
                                                                            --------------           ---------------
TOTAL OPERATING COSTS                                                              33,675                   405,504

OTHER INCOME (EXPENSE)
Interest Income                                                                        25                     2,913
Other Income                                                                                                  4,500
Interest Expense                                                                    (323)                  (28,000)
                                                                            --------------           ---------------
TOTAL OTHER INCOME (EXPENSE)                                                        (298)                  (20,587)

NET INCOME (LOSS)                                                               $(20,111)                $(312,159)
                                                                            ==============           ===============

Net Loss per Share                                                                 (0.00)                    (0.05)
Weighted Average Common Shares                                                  6,010,000                 6,010,000


</TABLE>


<PAGE>
<TABLE>
<CAPTION>




                                               BOULDER CAPITAL OPPORTUNITIES III, INC.
                                                    (A DEVELOPMENT STAGE COMPANY)
                                                  UNAUDITED STATEMENT OF CASH FLOWS
                                                 FOR THE THREE MONTHS ENDED JUNE 30,


<S>                                                                             <C>                      <C> 
                                                                                    1997                       1998
                                                                                -------------            ----------------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net Loss                                                                            $(20,112)                 $(312,160)

Adjustments to reconcile net loss to
cash used in operating activities:
Depreciation
(Increase) Decrease in current assets                                             (5,739,439)                  (127,828)
Increase (Decrease) in current                                                      (244,634)                     39,886
liabilities
(Increase) Decrease in other assets                                                                             (75,433)
                                                                               ---------------           ----------------

NET CASH PROVIDED (USED) BY                                                       (6,004,185)                  (475,535)
OPERATING ACTIVITIES

CASH FLOWS FROM INVESTING
ACTIVITIES
(Purchase) Sale of property and                                                     (144,829)                     78,176
equipment
Increase (Decrease) in notes payable                                                  845,000                          -
Capital received                                                                    5,300,000                  1,500,000
                                                                               ---------------           ----------------
NET CASH FLOWS FROM                                                                 6,000,171                  1,578,176
INVESTING ACTIVITIES

NET INCREASE (DECREASE) IN                                                            (4,014)                  1,102,641
CASH

CASH AT BEGINNING OF PERIOD                                                               742                    354,086

CASH AT END OF PERIOD                                                                $(3,272)                 $1,456,727
                                                                               ===============           ================



</TABLE>




<PAGE>



                     BOULDER CAPITAL OPPORTUNITIES III, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                        FOR THE SIX MONTHS ENDED JUNE 30,

                                   (UNAUDITED)

(1)      SUMMARY OF ACCOUNTING POLICIES

         This  summary of  significant  accounting  policies of Boulder  Capital
Opportunities  III, Inc.  (Company) is presented to assist in understanding  the
Company's  financial   statements.   The  financial  statements  and  notes  are
representations  of the  Company's  management  who  is  responsible  for  their
integrity  and  objectivity.  These  accounting  policies  conform to  generally
accepted  accounting  principles  and  have  been  consistently  applied  in the
preparation of the financial statements.

         (a)      DESCRIPTION OF BUSINESS

                  The Company was  organized on November 27, 1996,  in the State
                  of Colorado for the purpose of engaging in any lawful business
                  with a plan to seek a business combination.

                  PURCHASE OF BUSINESS ASSETS

                  In June 1998, Boulder Capital  Opportunities III, Inc. ("BCO")
                  entered  into  a  Share  Exchange  Agreement  with  Sonic  Jet
                  Performance,  LLC  ("SJPLLC") to acquire all of the assets and
                  business  of  SJPLLC  (and   assume  the   liabilities).   The
                  acquisition was consummated and effective as of June 30, 1998.
                  The transaction was treated as a "purchase  transaction".  All
                  assets were  accounted for under their  predecessor  basis.  A
                  total of 5 million shares of common stock of BCO was issued to
                  SJPLLC.

                  DESCRIPTION OF BUSINESS

                  Sonic Jet  Performance,  LLC (the  "Predecessor  Company") was
                  organized  in  California  with the filing of the  Articles of
                  Organization  on May 8,  1997 as a Limited  Liability  Company
                  ("LLC").  The primary  purpose of the Company is the operating
                  of a business producing and marketing personal watercraft, jet
                  boats,  trailers,  and  accessories.  The principal  executive
                  office is located in Huntington Beach, California.

                  On August 9, 1997,  the  Predecessor  Company  entered  into a
                  joint venture agreement with China Guangxi Nanning Shipyard of
                  Nanning,  Guangxi, China to form the Nanning Sonic Jet Limited
                  Liability  Company,  a contractual  limited  liability company
                  organized under the law of the People's Republic of China.


<PAGE>



                  The Joint Venture was formed to design, manufacture and  sell
                  a  series  of  watercraft  jet products  to  be  sold
                  internationally  and  in  China.  The Company's   investment
                  is  to  include  tooling,  molds  and production line and cash
                  equivalent to $ 1,500,000  USD. The Company is responsible for
                  providing technical personnel and training. The Company  shall
                  receive 70% of the profits and shall share 70% of the risks
                  and losses under the venture.

         (b)      USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL
                  STATEMENTS

                  The  preparation  of financial  statements in conformity  with
                  generally accepted  accounting  principles 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 revenue and  expenses  during the
                  reporting  period.  Actual  results  could  differ  from those
                  estimates.

         (c)      ORGANIZATION COSTS

                  Costs  incurred to  organize  the  Company  include  costs for
                  professional  fees and are being  amortized on a straight-line
                  basis over a sixty month period.


         (d)      ACCOUNTING METHOD

                  The Company's  financial  statements have been prepared on the
                  accrual  basis  of  accounting,  which is in  accordance  with
                  generally accepted accounting principles.

         (e)      INVENTORIES

                  Inventories  consist of parts for the  manufacture of personal
                  watercraft  and work in  progress  with a  limited  amount  of
                  finished products. Inventories are stated at the lower of cost
                  or market.  Inventories  were also  obtained in the  agreement
                  discussed  at note 1,  whereby  the Company  received  certain
                  assets and assumed certain liabilities in exchange for Company
                  interests.

         (f)      INVESTMENT IN JOINT VENTURE

                  The  investment  in Joint Venture in China is accounted for by
                  the equity method. Such investment is stated at cost minus the
                  Company's   proportionate   share  of  losses.  The  Company's
                  proportionate   share  of  losses   from  the  joint   venture
                  aggregating  $ 52,702 is  included  in other  revenues  in the
                  accompanying statement of operations.



<PAGE>



         (g)      PROPERTY, PLANT AND EQUIPMENT

                  Property,  plant and  equipment  are  stated at cost or at the
                  value per the Operating  Agreement  discussed at note 1. These
                  assets  are  depreciated  on a  straight-line  basis  over the
                  following estimated useful lives.

                   Furniture, fixtures and equipment              5 to 7 years
                   Tooling and molds                             15 to 20 years
<TABLE>
<CAPTION>

         (h)      BASIS IN ASSETS

                  The assets and  liabilities  purchased  in the Purchase are as
                  follows:
<S>                                                         <C>                               <C> 

Current Assets

  Cash                                                           $663,940

  Accounts Receivable                                            172,639

  Inventories                                                    1,789,866

  Related Party Receivable                                       37,766
                                                               ------------------------------

                     Total Current Assets                                                     $2,664,211

Property, Plan & Equipment

  Property Plant & Equipment                                                                  2,685,233

Other Assets

  Investment in joint venture                                    $840,130

  Organization costs, net                                        1,390

  Deposits                                                       1,200
                                                               ------------------------------

                      Total Other Assets                                                      842,720

TOTAL ASSETS                                                                                  $6,192,164
                                                                                            ==============================

                                                       LIABILITIES

Current Liabilities

  Accounts Payable                                               $120,555

  Accrued Interest Payable                                       27,667

  Other Payables                                                 91,074
                                                               ------------------------------

                   Total Current Liabilities                                                  $232,296

Long Term Liabilities

  Related Party Payable                                                                       600,000
                                                                                            ------------------------------

                       TOTAL LIABILITIES                                                      $839,296


</TABLE>



<PAGE>



These assets and  liabilities  were  purchased  and given a value to the Company
based on the book  value  per the  SJPLLC  audited  financial  statements  as of
December 31, 1997.


         (i)      PROPERTY, PLANT AND EQUIPMENT

         A summary of property, plant and equipment follows:

          Machinery and equipment                                 $  119,185
          Tooling                                                     66,389
          Office furniture, equipment and fixtures                     4,889
          Tooling, molds and jigs for personal watercraft            843,350
          Tooling, molds and jigs for exotic automobiles           1,710,000
          Leasehold improvements                                       4,249
          Vehicles                                                    32,403

                                                                 $ 2,780,465
             Less accumulated depreciation                         (  95,232)
                                                               --------------
                                                                 $ 2,685,233
                                                               ==============

                  The  tooling,  molds and jigs for exotic  automobiles  are not
                  being  utilized in current  production  activity.  The Company
                  anticipates   that  production   utilizing  these  items  will
                  commence in mid to late 1999.  The  majority  of the  tooling,
                  molds and jigs for personal  watercraft also are not currently
                  being utilized. The Company anticipates production activity in
                  the watercraft area to expand in late 1998.


(2)      BASIS OF PRESENTATION - GOING CONCERN

         The accompanying  financial statements have been prepared in conformity
         with  generally  accepted  accounting  principles,  which  contemplates
         continuation  of the Company as a going concern.  However,  the Company
         has sustained  operating  losses since  inception.  These matters raise
         substantial  doubt about the  Company's  ability to continue as a going
         concern.  Management  is  attempting  to locate a business  combination
         candidate.

         In view of these  matters,  continuing  as a going concern is dependent
         upon the Company's  ability to meet its financing  requirements,  raise
         additional  capital,  and  the  success  of its  future  operations  or
         completion of a successful  business  combination.  Management believes
         that actions  planned and presently being taken to revise the Company's
         operating and financial  requirements  provide the  opportunity for the
         Company to continue as a going concern.



<PAGE>



(3)      COMMON STOCK ISSUED

         (a)      On November 27, 1996, the Company issued 710,000 shares of its
                  no par value common  stock to  affiliates  for  organizational
                  services valued at their fair market value of $1,775.

         (b)      On November 27, 1996, the Company issued 100,000 shares of its
                  no par value common stock to its President at $.0025 per share
                  for cash of $250.

         (c)      On November 29, 1996, the Company issued 100,000 shares of its
                  no par value common stock to various  investors for $4,000. On
                  December 2, 1996, the Company issued another 100,000 shares of
                  its no par value common stock to
                  various investors for $4,000.

         (d)      On June 21, 1998, the Company issued 1,600  Preferred  Class A
                  Convertible shares for $1,500,000 to JNC Strategic Fund, Ltd.

         (e)      On June 21, 1998, the Company issued  5,000,000 shares for the
                  purchase of assets and  liabilities of Sonic Jet  Performance,
                  LLC (see note 1(a).

(4)      RELATED PARTY TRANSACTIONS

         During the year ended  December  31,  1996,  the Company paid $2,000 in
         consulting  fees and $2,500 in  attorney's  fees to  officers  whom are
         shareholders  of the Company.  During the year ended December 31, 1997,
         the Company  paid $3,000 in  consulting  fees and $1,920 in  attorney's
         fees to officers whom are shareholders of the Company.

         At December 31, 1997,  the Company owed $1,619 in attorney's  fees to a
         shareholder of the Company.

         SJPLLC  previously  entered into  transactions  with an SJPLLC  member,
         Mohammed Al Rashid.  The  transactions  have  resulted in both  related
         party payables.

         A summary of related party debt to Mohammed Al Rashid follows:

          Note  payable,  bearing  simple  interest  at 10%  per  annum;  annual
           payments  are to commence  July 18, 2001 in an amount equal to 60% of
           available  distributable  cash for the nearest  preceding  accounting
           period;  all  unpaid  principal  is due  July 18,  2003;  the note is
           secured by Company assets
                                                           $    600,000
                                                                =======

         The Company  acquired  certain assets and business,  subject to certain
         debt from SJPLLC (see note 1 (a) SJPLLC for 5 million  shares of common
         stock.


<PAGE>




(5)      INCOME TAXES

         For income tax  reporting  purposes,  the Company  utilizes the accrual
         basis of  accounting  on a calendar  year end. The Company has filed an
         extension for 1997 tax reporting.  The Company is an Limited  Liability
         Company and elects to be taxed as a partnership.


(6)      COMMITMENTS AND CONTINGENCIES

         LEASES

         The Company  leases its location  under an operating  lease  agreement.
         Future minimum lease payments are as follows:

                           Year Ending
                           DECEMBER 31,

                              1998                                 54,540
                              1999                                 54,540
                                                                   -------
                                                                $ 109,080
                                                                   =======

         Rental expense was  approximately  $ 32,000 for the year ended December
         31, 1997.


         EMPLOYMENT AGREEMENTS

         As part of the Letter  Agreement  of July 18, 1997 the Company  entered
         into  an  employment  agreement  with  a  member  of the  Company.  The
         agreement  is for  eighteen  months.  During  this period the salary is
         accrued  and is to be paid upon  unanimous  agreement  of the  members.
         Thereafter,  the  salary  is to be paid  bi-monthly.  The  salary  will
         increase to $ 120,000 per annum once the sales and  financial  forecast
         is met.


         ROYALTY AGREEMENT

         Per the Letter  Agreement  of July 18,  1997,  the  Company is to pay a
         royalty for various  patents.  The royalty is 2% of total Company sales
         calculated  quarterly  commencing after eighteen  calendar months.  The
         minimum royalty is to be $4,166 per month for months  nineteen  through
         thirty and $8,333 per month  thereafter.  If total Company sales exceed
         $1,000,000 during any twelve month period, the higher minimum or the 2%
         will be paid for that twelve month period and thereafter.







<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS


PURCHASE OF BUSINESS ASSETS

     In June 1998, Boulder Capital  Opportunities III, Inc. ("BCO") entered into
a Share Exchange Agreement with Sonic Jet Performance, LLC ("SJPLLC") to acquire
all of the assets and  business  of SJPLLC  (and  assume the  liabilities).  The
acquisition  was  consummated and effective as of June 30, 1998. The transaction
was treated as a "purchase  transaction".  All assets were  accounted  for under
their predecessor  basis. A total of 5 million shares of common stock of BCO was
issued to SJPLLC.


DESCRIPTION OF BUSINESS

     The primary purpose of the Company is the operating of a business producing
and marketing personal watercraft,  jet boats,  trailers,  and accessories.  The
principal executive office is located in Huntington Beach, California.


MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

RESULTS OF OPERATIONS FOR THREE MONTH PERIOD ENDED JUNE 30, 1998

         The Company had expenses for the three month period in 1998 of $405,504
as compared to $33,675 in expenses in the 1997 period.  There were  revenues for
the period in 1998 of $152,628 compared to $22,264 in 1997. The Company recorded
a net loss on operations of ($312,159)  for the period in 1998 and a net loss of
$20,111 in the 1997 period.  The Company  operating  losses may  continue  until
greater sales can be achieved.

RESULTS OF OPERATIONS FOR SIX MONTH PERIOD ENDED JUNE 30, 1998

         The Company had  revenues of $222,194  for period  ended June 30, 1998,
compared to $47,411 in the same period in 1997. Cost of goods sold in the period
in 1998 was  $64,464  compared to $22,194 in 1997.  The  Company  had  operating
expenses  for the six month period in 1998 of $589,327 as compared to $71,852 in
expenses in the 1997 period.  The Company  recorded a net loss on  operations of
($453,287)  for the  period  in 1998  and a net  loss of  ($46,897)  in the 1997
period.  The Company  operating  losses may continue  until greater sales can be
achieved.   While  the  Company  is  seeking   additional  capital  sources  for
investment;  there is no assurance  that  sources can be found,  and there is no
assurance  that its  watercraft  manufacturing  and  marketing  efforts  will be
productive.


LIQUIDITY AND CAPITAL RESOURCES

         The Company had  $1,456,728  in cash  capital at the end of the period.
The Company may be forced to either  borrow or make private  placements of stock
in order to fund future expansion of operations and sales efforts.  No assurance
exists as to the ability to achieve  loans or make  private placements of stock.
The Company had accounts receivable of $269,784 and inventory of $1,885,985 at 
the period end.


         As of June 30, 1998, the Company had current assets of $3,669,015 which
$1,456,728  was cash  and  total  assets  of  $7,228,950.  The  Company's  total
liabilities at June 30, 1998 were $796,357. Shareholder equity as of the quarter
ending June 30, 1998, was $6,432,593.





<PAGE>


                                            PART II - OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS

                  None

ITEM 2.           CHANGES IN SECURITIES

                  None

ITEM 3.           DEFAULT UPON SENIOR SECURITIES

                  None

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                  None

ITEM 5.           OTHER INFORMATION

                  None

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

                  Form 8-K was filed on June 25, 1998.


                     BOULDER CAPITAL OPPORTUNITIES III, INC.
                          (A Development Stage Company)


                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                         BOULDER CAPITAL OPPORTUNITIES III, INC.

Date:  September 28, 1998

                                         by: /s/Alex Mardikian
                                         -----------------------------------
                                         Alex Mardikian, Vice-President