FORM 10-KSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                  For the fiscal year ended: December 31, 1997

                                       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: 0-22273

                     BOULDER CAPITAL OPPORTUNITIES III, INC.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)

           Colorado                                              84-138388
-------------------------------                              -------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

                                 2434 Vine Place
                                Boulder, Colorado        80304
               --------------------------------------------------   
               (Address of principal executive offices)(Zip Code)

                    Issuer's telephone number: (303) 442-4206
                                               --------------
       Securities registered under Section 12(b) of the Exchange Act: None

         Securities registered under Section 12(g) of the Exchange Act:

                           Common Stock, No Par Value
                           --------------------------
                                 Title of Class

      Check  whether  the issuer (1) filed all  reports  required to be filed by
Section 13 or 15(d) of the Exchange  Act 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 at least the past 90 days.
Yes  X          No      .
   -----           -----

<PAGE>

      Check if there is no disclosure  of delinquent  filers in response to Item
405 of Regulation S-B in this form, and no disclosure will be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [ ]

      Issuer's revenues for its most recent fiscal year: $3,000

     Aggregate market value of voting stock held by  non-affiliates  as of April
13,  1998:  $-0-.  There is  currently  no trading  market for the  Registrant's
securities.

     Number of shares of Common Stock, no par value, outstanding as of April 13,
1998: 1,010,000.

                       DOCUMENTS INCORPORATED BY REFERENCE

      See Part IV, Item 13 - "Exhibits and Reports on Form 8-K" for a listing of
documents incorporated by reference into this annual report on Form 10-KSB.

Transitional Small Business Disclosure Format (Check one):  Yes    ; No  X
                                                               ----    -----
                                       -2-

<PAGE>

                                     PART I

Item 1.   Description of Business.
          -----------------------
 
General
-------

     The  Company  was  incorporated  under the laws of the State of Colorado on
November 27, 8, 1996,  and as of the date of this report on Form 10-KSB  remains
in the  development  stage.  To date the  Company's  only  activities  have been
organizational  ones,  directed at developing  its business plan and raising its
initial capital.  The Company has not commenced any commercial  operations.  The
Company has no full-time employees and owns no real estate.

     The  Company's  business plan is to seek,  investigate,  and, if warranted,
acquire  one or more  properties  or  businesses,  and to pursue  other  related
activities  intended to enhance shareholder value. The acquisition of a business
opportunity  may be made by purchase,  merger,  exchange of stock, or otherwise,
and may encompass  assets or a business  entity,  such as a  corporation,  joint
venture,  or  partnership.  The  Company  has very  limited  capital,  and it is
unlikely  that the Company will be able to take  advantage of more than one such
business  opportunity.  The Company intends to seek opportunities  demonstrating
the potential of long-term growth as opposed to short-term earnings.

     The Company is negotiating a proposed  Agreement and Plan of Reorganization
(the "Agreement") with Intervault Group, Inc., a California corporation ("IVG"),
pursuant to which the Company will acquire all of the  outstanding  common stock
of IVG in exchange for  3,000,000  shares of the Company's  common  stock.  Upon
consummation of the exchange pursuant to the proposed Agreement, IVG will become
a wholly-owned subsidiary of the Company. See Item 11(c). In connection with the
proposed  transaction,  it is anticipated  that the current  shareholders of the
Company will enter into  agreements  to sell their shares of common stock of the
Company to the  shareholders  of IVG. Upon closing of the proposed  transaction,
Robert  Soehngen,  the sole  officer and director of the Company will resign his
management position. Thus, following closing of the proposed stock sale, current
management will have no further  control over conduct of the Company's  business
or over selection of a business opportunity.  In the future,  depending upon the
nature of the  transaction,  the then  current  officers  and  directors  of the
Company may resign their  management  positions  with the Company in  connection
with the Company's acquisition of a business opportunity.

     The  Company's  search  will be  directed  toward  small  and  medium-sized
enterprises which have a desire to become public corporations and which are able
to satisfy,  or anticipate in the reasonably  near future being able to satisfy,
the minimum asset  requirements in order to qualify shares for trading on NASDAQ
(See  "Investigation  and  Selection  of Business  Opportunities").  The Company
anticipates that the business opportunities presented to it will (i) be recently
organized  with no operating  history,  or a history of losses  attributable  to
under-capitalization  or  other  factors;  (ii)  be  experiencing  financial  or
operating  difficulties;  (iii) be in need of funds to develop a new  product or
service or to expand into a new market; (iv) be relying upon an untested product
or marketing concept; or (v) have a combination of the characteristics mentioned
in (i) through (iv). The Company intends to concentrate its acquisition  efforts

                                      -3-
<PAGE>

on properties or businesses that it believes to be undervalued.  Given the above
factors,  investors  should  expect that any  acquisition  candidate  may have a
history of losses or low profitability.

     The  Company  does not  propose  to  restrict  its  search  for  investment
opportunities  to  any  particular  geographical  area  or  industry,  and  may,
therefore,  engage in  essentially  any  business,  to the extent of its limited
resources. This includes industries such as service, finance, natural resources,
manufacturing, high technology, product development, medical, communications and
others. The Company's  discretion in the selection of business  opportunities is
unrestricted,  subject  to the  availability  of  such  opportunities,  economic
conditions, and other factors.

Investigation and Selection of Business Opportunities
-----------------------------------------------------

     The analysis of business  opportunities  will be undertaken by or under the
supervision of the Company's  President and Director,  Robert P.  Soehngen.  The
Company  anticipates  that it will consider,  among other things,  the following
factors in the analysis of business opportunities:

     (1) Potential for growth and  profitability,  indicated by new  technology,
anticipated market expansion, or new products;

     (2) The Company's  perception of how any  particular  business  opportunity
will be received by the investment community and by the Company's stockholders;

     (3) Whether, following the business combination, the financial condition of
the business  opportunity would be, or would have a significant  prospect in the
foreseeable  future of  becoming  sufficient  to enable  the  securities  of the
Company  to  qualify  for  listing on an  exchange  or on a  national  automated
securities quotation system, such as NASDAQ;

     (4) Capital requirements and anticipated availability of required funds, to
be provided by the Company or from  operations,  through the sale of  additional
securities,  through  joint  ventures  or  similar  arrangements,  or from other
sources;

     (5) The extent to which the business opportunity can be advanced;

     (6) Competitive position as compared to other companies of similar size and
experience  within the  industry  segment as well as within  the  industry  as a
whole;

     (7) Strength and diversity of existing management,  or management prospects
that are scheduled for recruitment;

     (8) The cost of  participation  by the Company as compared to the perceived
tangible and intangible values and potential; and

     (9) The  accessibility of required  management  expertise,  personnel,  raw
materials, services, professional assistance, and other required items.


                                       -4-

<PAGE>

     No one of the factors  described above will be controlling in the selection
of a business  opportunity,  and management  will attempt to analyze all factors
appropriate to each  opportunity and make a determination  based upon reasonable
investigative  measures and available data.  Potential  investors must recognize
that,  because of the Company's  limited capital available for investigation and
management's  limited  experience  in  business  analysis,  the  Company may not
discover  or  adequately  evaluate  adverse  facts about the  opportunity  to be
acquired.

     Company  management  believes  that various  types of  potential  merger or
acquisition  candidates might find a business combination with the Company to be
attractive.  These include  acquisition  candidates  desiring to create a public
market for their shares in order to enhance liquidity for current  shareholders,
acquisition  candidates  which have long-term  plans for raising capital through
the public sale of securities and believe that the possible prior existence of a
public  market  for  their  securities  would  be  beneficial,  and  acquisition
candidates  which  plan  to  acquire   additional  assets  through  issuance  of
securities rather than for cash, and believe that the possibility of development
of a public market for their  securities  will be of assistance in that process.
Acquisition  candidates which have a need for an immediate cash infusion are not
likely  to find a  potential  business  combination  with the  Company  to be an
attractive alternative.

Form of Acquisition
-------------------

     It is impossible to predict the manner in which the Company may participate
in a business opportunity.  Specific business  opportunities will be reviewed as
well as the respective needs and desires of the Company and the promoters of the
opportunity  and,  upon the basis of that  review and the  relative  negotiating
strength of the Company and such promoters, the legal structure or method deemed
by management to be suitable will be selected.  Such structure may include,  but
is not limited to leases, purchase and sale agreements, licenses, joint ventures
and other contractual  arrangements.  The Company may act directly or indirectly
through an interest in a partnership, corporation or other form of organization.
Implementing   such   structure  may  require  the  merger,   consolidation   or
reorganization  of the  Company  with other  corporations  or forms of  business
organization,  and although it is likely, there is no assurance that the Company
would  be  the  surviving  entity.  In  addition,  the  present  management  and
stockholders  of the Company  most likely will not have control of a majority of
the voting shares of the Company following a reorganization transaction. As part
of such a  transaction,  the  Company's  existing  directors  may resign and new
directors may be appointed without any vote by stockholders.

     It is likely that the Company will acquire its  participation in a business
opportunity  through the  issuance of Common  Stock or other  securities  of the
Company.  Although the terms of any such  transaction  cannot be  predicted,  it
should be noted that in  certain  circumstances  the  criteria  for  determining
whether or not an acquisition is a so-called "tax free" reorganization under the
Internal Revenue Code, as amended, depends upon the issuance to the stockholders
of the acquired  company of a  controlling  interest  (i.e.  80% or more) of the
common stock of the combined entities immediately  following the reorganization.
If a transaction  were structured to take advantage of these  provisions  rather
than other "tax free"  provisions  provided under the Internal Revenue Code, the
Company's current  stockholders would retain in the aggregate 20% or less of the
total issued and outstanding shares. This could result in substantial additional
dilution in the equity of those who were  stockholders  of the Company  prior to

                                      -5-
<PAGE>

such  reorganization.  Any such issuance of additional shares might also be done
simultaneously  with a sale or transfer  of shares  representing  a  controlling
interest in the Company by the current officer, director and shareholders.  (See
"Description of Business - General").

Item 2.  Description of Property.
         -----------------------

     The Company does not currently  maintain an office or any other facilities.
It does  currently  maintain  a mailing  address  at 2434 Vine  Place,  Boulder,
Colorado, which is the home address of the Company's President. The Company pays
no rent for the use of this mailing  address.  The Company does not believe that
it will need to  maintain  an office  at any time in the  foreseeable  future in
order to carry  out its  plan of  operations  described  herein.  The  Company's
telephone number is (303) 442-4206.

Item 3.  Legal Proceedings.
         -----------------

      The Company is not a party to any pending legal  proceedings,  and no such
proceedings are known to be contemplated.

     No director, officer or affiliate of the Company, and no owner of record or
beneficial  owner  of more  than 5% of the  securities  of the  Company,  or any
associate of any such director, officer or security holder is a party adverse to
the Company or has a material  interest  adverse to the Company in  reference to
pending litigation.

Item 4.  Submission of Matters to a Vote of Security Holders.
         ---------------------------------------------------

     On November 19, 1997,  the Company's  shareholders,  acting  pursuant to an
unanimous  written consent in lieu of a special  meeting,  approved the offer of
Harden  Energy  Resources,  Inc. to exchange its interest in certain oil and gas
producing leases for 6,791,000  shares of the Company's  authorized but unissued
common  stock  pursuant to an option  exercisable  for 90 days.  The option term
expired in 1998 without the option being exercised.

                                       -6-

<PAGE>
                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters.
         --------------------------------------------------------

     There is currently no public trading  market for the Company's  securities.
The securities are held of record by a total of approximately 11 persons.

     No dividends have been declared or paid on the Company's securities, and it
is  not  anticipated  that  any  dividends  will  be  declared  or  paid  in the
foreseeable future.

Item 6.  Management's Discussion and Analysis or Plan of Operation.
         ---------------------------------------------------------

     The Company's  plan of operations for the next twelve months is to continue
to carry out its plan of business  discussed  above.  This  includes  seeking to
complete  a  merger  or  acquisition  transaction  with a small  or  medium-size
enterprise  which  desires  to  become  a public  corporation.  In  selecting  a
potential  merger or  acquisition  candidate,  the Company  will  consider  many
factors,  including, but not limited to, potential for growth and profitability,
quality and experience of management,  capital requirements,  and the ability of
the Company to qualify its shares for trading on NASDAQ or on an exchange.

     The  types of  business  enterprises  which  it is  believed  might  find a
business  combination  with the  Company to be  attractive  include  acquisition
candidates  desiring  to create a public  market  for  their  shares in order to
enhance liquidity for current  shareholders,  acquisition  candidates which have
long-term  plans for raising  capital  through the public sale of securities and
believe  that  the  possible  prior  existence  of a  public  market  for  their
securities would be beneficial,  foreign companies  desiring to obtain access to
U.S. customers and U.S. capital markets,  and acquisition  candidates which plan
to acquire  additional  assets  through  issuance of securities  rather than for
cash,  and believe that the  possibility  of  development of a public market for
their securities will be of assistance in that process.  Acquisition  candidates
which  have a need for an  immediate  cash  infusion  are not  likely  to find a
potential business combination with the Company to be an attractive alternative.

     The Company's  balance  sheet for the fiscal year ended  December 31, 1997,
reflects current assets of $640 and current liabilities in the amount of $1,619.
Accordingly,  the Company  will be required to raise  additional  funds,  or its
shareholders  will be  required  to  advance  funds in order to pay its  current
liabilities and to satisfy the Company's cash  requirements  for the next twelve
months.

Item 7.  Financial Statements.
         --------------------

     The following financial  statements are filed as a part of this Form 10-KSB
immediately following the signature page:


                                      -7-

<PAGE>

   Index to Financial Statements.......................................... F-1

   Report of Independent Certified Public Accountants..................... F-2

   Balance Sheets - December 31, 1996 and 1997............................ F-3

   Statement of  Operations  - For the Period  November  27, 1996
     (Inception)  to  December  31,  1996,  for  the  Year  Ended
     December  31,  1997,  and for the period  November  27, 1996
     (Inception) to December 31, 1997..................................... F-4

   Statement of Changes in Stockholders' Equity -
     For the Period from November 27, 1996 (Inception)
     through December 31, 1997............................................ F-5

   Statements of Cash Flows - For the Period  November  27,  1996
     (Inception)  to  December  31,  1996,  for  the  Year  Ended
     December  31,  1997,  and for the period  November  27, 1996
     (Inception) to December 31, 1997..................................... F-6

   Notes to Financial Statements - For the Year December 31, 1997......... F-7


Item 8.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure.
         ----------------------------------------------------------------

     On March 25, 1998, the Company  dismissed the auditing and accounting  firm
of  Stark  Tinter &  Associates,  LLC,,  Denver,  Colorado,  who  have  acted as
certifying accountants for the Company for the year ended December 31, 1996, and
engaged the auditing and  accounting  firm of  Schumacher  &  Associates,  Inc.,
Englewood, Colorado to act as certifying accountants for the year ended December
31, 1997.  The Company is not aware of any  disagreements  or reportable  events
with the prior accountants, and the decision to change accountants was not based
upon any question as to accounting treatment of any transaction or type of audit
opinion that might be issued.

                                       -8-

<PAGE>

                                    PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
         Compliance With Section 16(a) of the Exchange Act
         --------------------------------------------------------------

(a)  Identification of Directors and Executive Officers.
     --------------------------------------------------

     The  directors  of the Company  are  elected to hold office  until the next
annual meeting of shareholders and until their  respective  successors have been
elected  and  qualified.  Officers  of the  Company  are elected by the Board of
Directors and hold office until their successors are elected and qualified.

     The current sole officer and director of the Company is:

Name                         Age              Position
----                         ---              --------

Robert P. Soehngen           47               Director, President, Secretary and
                                              Treasurer

     The sole director intends to appoint additional directors when appropriate.

     The directors and officers will devote their time to the Company's  affairs
on an "as needed" basis, which, depending on the circumstances,  could amount to
as little as two hours per month,  or more than forty hours per month,  but more
than likely will fall within the range of five to ten hours per month.

     Robert P.  Soehngen,  President,  Secretary,  Treasurer and  Director.  Mr.
Soehngen has served as the sole  officer and  director of the Company  since its
inception.

     Mr. Soehngen is currently self-employed as a business consultant, providing
consulting  services  relating to mergers and acquisitions and is engaged in the
real  estate  business  as a licensed  broker  associate  with  Century  21. Mr.
Soehngen was engaged in the securities  business in various capacities from 1975
to 1995. From 1991 through 1994 he was Director of Corporate Finance for Spencer
Edwards, Inc., Nutmeg Securities,  Inc., and Brookstreet Securities Corporation,
and from  1994  through  1995  was an  Account  Executive  with  Toluca  Pacific
Securities.  From 1989 through  1995,  Mr.  Soehngen  was  President of National
Securities  Holding  Corporation  and in that capacity  maintained the books and
records of a publicly- held subsidiary  corporation  until it was merged with an
operating business in September 1995. Mr. Soehngen graduated from the University
of Colorado in 1972, with a B.S. in Finance.

(b)  Significant Employees.
     ---------------------

     The Company has no significant employees at the present time.


                                       -9-

<PAGE>



(c)  Family Relationships.
     --------------------

     Currently there are no family relationships among any of the Company's
officers and/or directors.

(d)  Involvement in Certain Legal Proceedings.
     ----------------------------------------

     During the past five years,  no director,  executive  officer,  promoter or
control person of the Company has:

     (1) Had any  bankruptcy  petition filed by or against any business of which
such person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that date;

     (2) Been  convicted in a criminal  proceeding  or been subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses);

     (3) Been  subject to any order,  judgement,  or  decree,  not  subsequently
reversed,  suspended  or  vacated,  of  any  court  of  competent  jurisdiction,
permanently or temporarily enjoining,  barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities; or

     (4) Been found by a court of competent  jurisdiction  (in a civil  action),
the Commission or the Commodity  Futures  Trading  Commission to have violated a
federal or state securities or commodities law, where the judgement has not been
reversed, suspended, or vacated.

(e)  Compliance with Section 16(a) of the Exchange Act.
     -------------------------------------------------

     Based solely on a review of Forms 3 and 4 and amendments  thereto furnished
to the  Company,  during the fiscal  year ended  December  31,  1997,  Robert P.
Soehngen, the Company's President and Director and beneficial owner of more than
ten percent of the Company's common stock,  failed to file a Form 3 and a Form 4
on a timely  basis.  In addition,  Harden Energy  Resources,  Inc., a beneficial
owner of more than ten percent of the Company's  common stock,  failed to file a
Form 3 on a timely basis.

Item 10.  Executive Compensation.
          ----------------------

     The Company's sole director  received  remuneration from the Company during
the fiscal year of $3,000.  Until the Company acquires additional  capital,  the
Company's sole officer and director will receive  compensation  from the Company
for  reimbursement  only of  out-of-pocket  expenses,  including  review  of any
prospective merger or acquisition candidate,  incurred on behalf of the Company.
See "Certain  Relationships and Related  Transactions." The Company has no stock

                                      -10-

<PAGE>

option,  retirement,  pension,  or  profit-sharing  programs  for the benefit of
directors, officers or other employees, but the Board of Directors may recommend
adoption of one or more such programs in the future.

Item 11.  Security Ownership of Certain Beneficial Owners and Management.
          --------------------------------------------------------------

(a)(b)    Security Ownership of Certain Beneficial Owners and Management.
          --------------------------------------------------------------

     The following table sets forth  information as of April 13, 1998, as to the
beneficial  ownership  of  shares of the  Company's  only  outstanding  class of
securities,  its Common  Stock,  by each  person who,  to the  knowledge  of the
Company at that date,  was a beneficial  owner of 5% or more of the  outstanding
shares of Common Stock,  by each person who is an officer and/or director of the
Company and by all officers and directors of the Company as a group.
<TABLE>
<CAPTION>
                                                      Amount and
                    Name and Address                   Nature of
 Title of             of Beneficial                   Beneficial          Percent of
  Class                   Owner                          Owner               Class
----------         -------------------                -----------         -----------
<S>                <C>                                <C>                     <C>
Common Stock       Robert P. Soehngen                 547,500 (1)             54.2%
                   2434 Vine Place
                   Boulder, CO 80304

Common Stock       Harden Energy Resources, Inc.       250,000 (1)            19.8%
                   12860 Nimitz
                   Houston, TX 77015

Common Stock       Officers and directors             547,500 (1)             54.2%
                   as a group (one person)
</TABLE>
----------------

(1)  Calculated  pursuant to Rule  13d-3(d) of the  Securities  Exchange  Act of
     1934.  Unless otherwise stated below,  each such person has sole voting and
     investment  power with  respect to all such  shares.  Under Rule  13d-3(d),
     shares not outstanding  which are subject to options,  warrants,  rights or
     conversion privileges exercisable within 60 days are deemed outstanding for
     the purpose of calculating the number and percentage  owned by such person,
     but  are  not  deemed  outstanding  for  the  purpose  of  calculating  the
     percentage owned by each other person listed.

(c)  Changes in Control.
     ------------------

     The Company is negotiating a proposed  Agreement and Plan of Reorganization
(the "Agreement") with Intervault Group, Inc., a California corporation ("IVG"),
pursuant to which the Company will acquire all of the  outstanding  common stock
of IVG in exchange for 3,000,000  shares of the Company's  common stock. IVG has
paid the Company $15,000 as a  nonrefundable  expense deposit in connection with

                                      -11-

<PAGE>

the  negotiations.  Upon  consummation of the exchange  pursuant to the proposed
Agreement, IVG will become a wholly-owned subsidiary of the Company.

Item 12.  Certain Relationships and Related Transactions.
          ----------------------------------------------

     (a)(b)  Transactions with Management and Others.
             ---------------------------------------

     In August,  1997, the existing  shareholders  of the Company agreed to sell
999,900 shares of their common stock of the Company,  representing approximately
99% of  the  issued  and  outstanding  shares,  for  $50,000  to  Harden  Energy
Resources, Inc. ("Harden").  Pursuant to the terms of the agreement, $25,000 was
paid upon signing the  agreement  in exchange for the sale of 250,000  shares of
the Company's common stock  proportionately  among all of the Company's existing
shareholders.  Harden had the option, for 90 days, to pay the additional $25,000
and merge its oil and gas properties into the Company for the remaining  749,900
shares. The option term expired in 1998 as to the 749,900 shares with the option
remaining  unexercised.  Of the  total  250,000  shares  sold to  Harden  by the
Company's  shareholders,  Robert P. Soehngen, the Company's President,  Director
and the beneficial owner of over 5% of the Company's  outstanding  common stock,
sold 112,500 shares to Harden for $7,500.

     In connection  with the  negotiations  in regard to the proposed  Agreement
between the  Company  and IVG as  described  in Item 12(c)  above,  IVG paid the
Company a total of $15,000 as a non-refundable  expense deposit.  Of the $15,000
paid to the Company by IVG, the Company paid Robert P. Soehngen,  its President,
sole  director  and  controlling  shareholder,  $5,000 in  payment  of  services
rendered  to the  Company,  and $9,000 to Steve  Signer,  a  shareholder  of the
Company, as a finder's fee.

     As  permitted  by Colorado  law, the  Company's  Articles of  Incorporation
provide that the Company  will  indemnify  its  directors  and officers  against
expenses and liabilities they incur to defend,  settle,  or satisfy any civil or
criminal  action  brought  against them on account of their being or having been
Company directors or officers unless,  in any such action,  they are adjudged to
have  acted   with  gross   negligence   or  willful   misconduct.   Insofar  as
indemnification  for liabilities arising under the Securities Act of 1933 may be
permitted to directors,  officers or persons controlling the Company pursuant to
the foregoing provisions,  the Company has been informed that, in the opinion of
the Securities and Exchange  Commission,  such indemnification is against public
policy as expressed in that Act and is, therefore, unenforceable.

     Pursuant to the Colorado Business  Corporation Act, the Company's  Articles
of  Incorporation  exclude  personal  liability  for its  directors for monetary
damages based upon any violation of their fiduciary duties as directors,  except
as to liability for any breach of the duty of loyalty,  acts or omissions not in
good faith or which involve  intentional  misconduct  or a knowing  violation of
law,  acts  in  violation  of  Section   7-108-403  of  the  Colorado   Business
Corporation,  or any  transaction  from which a director  receives  an  improper
personal  benefit.  This exclusion of liability does not limit any right which a
director may have to be indemnified and does not affect any director's liability
under federal or applicable state securities laws.


                                      -12-

<PAGE>

     The  Company's  sole  officer  devotes  only a  portion  of his time to the
affairs of the Company.  There will be occasions when the time  requirements  of
the Company's business conflict with the demands of the officer's other business
and investment  activities.  Such conflicts may require that the Company attempt
to employ additional personnel.  There is no assurance that the services of such
persons will be available or that they can be obtained  upon terms  favorable to
the Company.

          It is possible  that the Company may enter into an  agreement  with an
acquisition candidate requiring the sale of all or a portion of the Common Stock
held by the  Company's  current  stockholders  to the  acquisition  candidate or
principals thereof,  or to other individuals or business entities,  or requiring
some other form of payment to the Company's current  stockholders,  or requiring
the future employment of specified  officers and payment of salaries to them. It
is more likely than not that any sale of  securities  by the  Company's  current
stockholders  to an  acquisition  candidate  would  be at a price  substantially
higher than that  originally paid by such  stockholders.  Any payment to current
stockholders  in the context of an  acquisition  involving  the Company would be
determined  entirely by the largely  unforeseeable  terms of a future  agreement
with an unidentified business entity.

     (c) Parents of the Company.
         ----------------------

     The parent of the Company is Robert P. Soehngen. See Item II (a)(b) for the
percentage of securities owned by Mr. Soehngen.

     (d) Transactions with Promoters.
         ---------------------------

     See (a) (b) above.

Item 13.  Exhibits and Reports on Form 8-K.
          --------------------------------

     (a)  Exhibits  required  to be filed are  listed  below and,  except  where
incorporated by reference, immediately follow the Financial Statements.

   Number               Description
   ------               -----------

   3.(i)                Articles of Incorporation(1)

   3.(ii)               Bylaws(1)

   3.(iii)              Specimen Stock Certificate(1)

   3.(iv)               Articles of Amendment to the Articles of Incorporation

   27                   Financial Data Schedule

-----------------

                                      -13-

<PAGE>



(1)  Incorporated  by reference  from the like numbered  exhibits filed with the
     Registrant's  Registration  Statement on Form 10-SB,  SEC File No. 0-22273,
     effective August 21, 1997.

     (b) During  the last  quarter  of the  period  covered  by this  report the
Company filed no reports on Form 8-K.


                                      -14-

<PAGE>


                                   SIGNATURES

         In accordance  with Section 13 or 15(d) of the Securities  Exchange Act
of 1934,  the  Registrant  caused  this report to be signed on its behalf by the
undersigned, thereunto duly autho rized.

Date: April 14, 1998                   BOULDER CAPITAL OPPORTUNITIES
                                       III, INC.



                                       By  /s/ Robert P. Soehngen
                                         ---------------------------------------
                                         Robert P. Soehngen, President

                                      -15-

<PAGE>
                          INDEX TO FINANCIAL STATEMENTS

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


                              FINANCIAL STATEMENTS

                                      with

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Report of Independent Certified Public Accountants                         F-2

Financial Statements:

         Balance Sheets                                                    F-3

         Statements of Operations                                          F-4

         Statement of Changes in Stockholders'
          Equity                                                           F-5

         Statements of Cash Flows                                          F-6

         Notes to Financial Statements                                     F-7


                                       F-1

<PAGE>



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors
Boulder Capital Opportunities III, Inc.
Boulder, CO

We have audited the accompanying balance sheet of Boulder Capital  Opportunities
III, Inc. (a development-stage company) as of December 31, 1997, and the related
statements of operations, stockholders' equity and cash flows for the year ended
December 31, 1997.  These  financial  statements are the  responsibility  of the
company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements,  referred to above, present fairly, in
all material respects,  the financial position of Boulder Capital  Opportunities
III, Inc. (a development-stage company) as of December 31, 1997, and the results
of its operations,  changes in its  stockholders'  equity and its cash flows for
the  year  ended  December  31,  1997  in  conformity  with  generally  accepted
accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  described  in  Note 2 to the
financial statements,  the Company has suffered recurring losses from operations
and has a net working capital deficiency that raise substantial doubts about its
ability to continue as a going concern.  The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

                                            Schumacher & Associates, Inc.
                                            Certified Public Accountants
                                            12835 E. Arapahoe Road
                                            Tower II, Suite 110
                                            Englewood, CO 80112
March 10, 1998

                                       F-2

<PAGE>
<TABLE>
<CAPTION>
                     BOULDER CAPITAL OPPORTUNITIES III, INC.
                     ---------------------------------------

                          (A Development Stage Company)

                                 BALANCE SHEETS

                                                                                          December 31,
                                                                                 1996                     1997
                                                                             ------------             -----------

                                     ASSETS

<S>                                                                          <C>                      <C>  
Current Assets:
  Cash                                                                       $      3,753             $       640
                                                                             ------------             -----------
         Total Current Assets                                                       3,753                     640
                                                                             ------------             -----------

Organization costs, net of
 amortization                                                                       1,745                   1,390
                                                                             ------------             -----------


TOTAL ASSETS                                                                 $      5,498             $     2,030
                                                                             ============             ===========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Accounts payable                                                           $          -             $     1,619
                                                                             ------------             -----------
         Total Current Liabilities                                                      -                   1,619
                                                                             ------------             -----------

TOTAL LIABILITIES                                                                       -                   1,619
                                                                             ------------             -----------

Commitments and contingencies
 (Notes 2,3 and 5)                                                                      -                       -

Stockholders' Equity:
  Preferred stock, no par value
   10,000,000 shares authorized,
   none issued and outstanding                                                          -                       -
  Common stock, no par value
   100,000,000 shares authorized,
   1,010,000 issued and outstanding                                                10,025                  10,025
  Accumulated (Deficit)                                                            (4,527)                 (9,614)
                                                                             ------------              ----------

TOTAL STOCKHOLDERS' EQUITY                                                          5,498                     411
                                                                             ------------              ----------
TOTAL LIABILITIES AND
 STOCKHOLDERS' EQUITY                                                        $      5,498              $    2,030
                                                                             ============              ==========



                The accompanying notes are an integral part of the financial statements.
</TABLE>

                                                    F-3

<PAGE>
<TABLE>
<CAPTION>
                     BOULDER CAPITAL OPPORTUNITIES III, INC.
                     ---------------------------------------
                          (A Development Stage Company)

                            STATEMENTS OF OPERATIONS

                                                            For the period                          For the period
                                                             Nov 27, 1996          For the Year      Nov 27, 1996
                                                            (Inception) to            Ended         (Inception) to
                                                             December 31,          December 31,       December 31,
                                                                 1996                  1997               1997
                                                            --------------         ------------      -------------
<S>                                                          <C>                   <C>                <C>
Revenue                                                      $          -          $      3,000       $     3,000
                                                             ------------          ------------       -----------
Expenses:

        Amortization                                                   30                   355               385
        Professional fees                                           2,000                 3,000             5,000
        Legal and accounting                                        2,500                 4,539             7,039
        Other                                                           -                   208               208
                                                             ------------           -----------       -----------
                                                                    4,530                 8,102            12,632
                                                             ------------           -----------       -----------

Net Operating(Loss)                                                (4,530)               (5,102)           (9,632)
                                                             ------------           -----------       -----------

Other Income
        Interest income                                                 3                    15                18
                                                             ------------           -----------       -----------

Net (Loss)                                                   $     (4,527)          $    (5,087)      $    (9,614)
                                                             ============           ===========       ===========

Per Share                                                    $        nil           $      (.01)      $      (.01)
                                                             ============           ===========       ===========

Weighted Average Shares
 Outstanding                                                    1,010,000             1,010,000         1,010,000
                                                             ============           ===========       ===========


                    The accompanying notes are an integral part of the financial statements.
</TABLE>

                                                      F-4

<PAGE>
<TABLE>
<CAPTION>

                                               BOULDER CAPITAL OPPORTUNITIES III, INC.
                                               ---------------------------------------

                                                    (A Development Stage Company)

                                            STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

                                                For the Period from November 27, 1996
                                            (date of inception) through December 31, 1997




                                     Preferred      Stock         Common         Stock         Accumulated
                                     No./Shares     Amount      No./Shares       Amount         (Deficit)        Total
                                     ----------     ------      ----------       ------        ------------      -----
<S>                                     <C>        <C>           <C>            <C>             <C>           <C>
Balance at November 27, 1996                 -     $    -               -       $       -       $       -     $       -

Common stock issued for
services, at inception,
at $.0025 per share                          -          -         710,000           1,775               -         1,775

Common stock issued for
cash at $.0025 per share                     -          -         100,000             250               -           250

Common stock issued for
cash at $.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
Net loss-year ended
December 31, 1997                            -          -               -               -         (5,087)       (5,087)
                                       -------     ------       ---------        --------       --------       -------

Balance at December 31,
1997                                         -     $    -       1,010,000        $ 10,025       $ (9,614)      $    411
                                       =======     ======      ==========        ========       ========       ========



                             The accompanying notes are an integral part of the financial statements.
</TABLE>

                                                                F-5

<PAGE>
<TABLE>
<CAPTION>
                     BOULDER CAPITAL OPPORTUNITIES III, INC.
                     ---------------------------------------

                          (A Development Stage Company)

                            STATEMENTS OF CASH FLOWS

                                                           For the period                        For the period
                                                            Nov 27, 1996      For the year        Nov 27, 1996
                                                           (Inception) to        Ended           (Inception) to
                                                            December 31,      December 31,        December 31,
                                                                1996             1997                 1997
                                                           --------------     ------------       ---------------
<S>                                                         <C>                <C>                <C>
Operating Activities:
 Net (Loss)                                                 $   (4,527)        $   (5,087)        $    (9,614)
 Adjustment to reconcile net (loss)
  to net cash provided by operating
  activities:
   Amortization                                                     30                355                 385
   Increase in accounts payable
    And accrued expenses                                             -              1,619               1,619
                                                            ----------         ----------         -----------

 Net Cash (Used in) Operating
  Activities                                                    (4,497)            (3,113)             (7,610)
                                                            ----------         ----------         -----------

Cash Flows from Investing
 Activities                                                          -                  -                   -
                                                            ----------         ----------         -----------

Cash Flows from Financing Activities:

        Issuance of common stock                                 8,250                  -               8,250
                                                            ----------         ----------         -----------

Net Cash Provided by Financing
 Activities                                                      8,250                  -               8,250
                                                            ----------         ----------         -----------

Increase (decrease) in Cash                                      3,753             (3,113)                640

Cash, Beginning of Period                                            -              3,753                   -
                                                            ----------         ----------         -----------

Cash, End of Period                                         $    3,753         $      640         $       640
                                                            ==========         ==========         ===========

Interest Paid                                               $        -         $        -         $         -
                                                            ==========         ==========         ===========

Income Taxes Paid                                           $        -         $        -         $         -
                                                            ==========         ==========         ===========
</TABLE>

Note: On November 27, 1996,  professional services capitalized as organizational
costs valued at $1,775 were exchanged for 710,000 shares of common stock.

The accompanying notes are an integral part of the financial statements.

                                       F-6

<PAGE>

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

                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1997

(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
                  but it is  management's  plan to seek a business  combination.
                  The  Company  is in a  development-stage  and its intent is to
                  operate as a capital market access  corporation and to acquire
                  one or more existing businesses through merger or acquisition.
                  The Company has had no significant  business activity to date.
                  The Company has selected December 31 as its year end.

         (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.


                                       F-7

<PAGE>
                     BOULDER CAPITAL OPPORTUNITIES III, INC.
                     ---------------------------------------
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1997

(1)      Summary of Accounting Policies, Continued
         -----------------------------------------

         (d)      Income Taxes
                  ------------

                  As of December 31, 1997, the Company had net operating  losses
                  available  for  carryover  to  future  years of  approximately
                  $9,614,  expiring in 2012. Utilization of these carryovers may
                  be limited if there is a change in  ownership  of the Company.
                  As of December 31,  1997,  the Company has deferred tax assets
                  of approximately  $1,923 due to operating loss  carryforwards.
                  However,  because of the uncertainty of potential  realization
                  of  these  assets,   the  Company  ahs  provided  a  valuation
                  allowance for the entire $1,923. Thus, no tax assets have been
                  recorded in the financial statements as of December 31, 1997.

(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 and has a net working
         capital  deficiency.  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.


                                       F-8

<PAGE>
                     BOULDER CAPITAL OPPORTUNITIES III, INC.
                     ---------------------------------------

                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1997

(3)      Common Stock Issued
         -------------------

         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.

         On November 27, 1996,  the Company  issued 100,000 shares of its no par
         value  common  stock to its  President at $0.0025 per share for cash of
         $250.

         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.

(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.

(5)      Subsequent Event
         ----------------

         In August 1997, the existing shareholders of the Company agreed to sell
         999,900  shares  of  their  common  stock of the  Company  representing
         approximately  99% of the issued and  outstanding  shares for  $50,000.
         Under the terms of the  agreement,  $25,000  was paid upon  signing the
         agreement for 250,000 shares.  The buyers had the option for 90 days to
         pay the additional  $25,000 and merge their oil and gas properties into
         the Company for the remaining  749,900 shares.  The option term expired
         in 1998 without the option being exercised.


                                       F-9

<PAGE>
                     BOULDER CAPITAL OPPORTUNITIES III, INC.
                     ---------------------------------------

                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1997

(5)      Subsequent Event, Continued
         ---------------------------

         On March 5, 1998, the Company  entered into an agreement to acquire all
         the  outstanding  common stock of an entity in exchange  for  3,000,000
         shares of the  common  stock of the  Company.  The  Company  received a
         $5,000 non-refundable expense deposit and according to the terms of the
         agreement  will receive an additional  $10,000  non-refundable  expense
         deposit upon closing in escrow within 14 days of March 5, 1998. Various
         contingencies are precedent to the consummation of this exchange.

                                      F-10