NEVADA
|
87-0460247
|
(IRS
Employer
|
|
incorporation
or organization)
|
Identification
No.)
|
Page
No.
|
||||||
Part
I
|
Financial
Information
|
3
|
||||
Item
1:
|
Condensed
Consolidated Financial Statements (Unaudited)
|
|||||
Balance
Sheets as of June 30, 2010 and September 30, 2009
|
3 | |||||
Statements
of Operations – For the Three Months Ended June 30, 2010 and
2009
|
4 | |||||
Statements
of Operations – For the Nine Months Ended June 30, 2010 and 2009 and from
inception (January 20, 2009) through June 30, 2010
|
5 | |||||
Statements
of Cash Flows – For the Nine Months Ended June 30, 2010 and 2009 and from
inception (January 20, 2009) through June 30, 2010
|
6 | |||||
Notes
to Financial Statements
|
7 | |||||
Item
2:
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
17 | ||||
Item
3:
|
Quantitative
and Qualitative Disclosure about Market Risk
|
22 | ||||
Item
4:
|
Controls
and Procedures
|
22 | ||||
Part
II
|
Other
Information
|
25 | ||||
Other
Information
|
25 | |||||
Item
6:
|
Exhibits
|
25 |
PART
1: FINANCIAL INFORMATION
|
ITEM
1: FINANCIAL STATEMENTS
|
DOUBLE
EAGLE HOLDINGS, LTD. AND SUBSIDIARY
|
||||
(Development
Stage Companies)
|
||||
Condensed
Consolidated Balance Sheets
|
||||
June
30, 2010 and September 30, 2009
|
June
30,
|
September
30,
|
|||||||
2010
|
2009
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 302 | $ | 582 | ||||
Total
current assets
|
302 | 582 | ||||||
Other
assets:
|
||||||||
Available-for-sale
investments - affiliates
|
82,869 | 179,495 | ||||||
Notes
and accrued interest receivable - affiliate
|
26,020 | 57,819 | ||||||
Total
other assets
|
108,889 | 237,314 | ||||||
Total
assets
|
$ | 109,191 | $ | 237,896 | ||||
LIABILITIES
AND STOCKHOLDERS' (DEFICIT)
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
73,625 | 75,094 | ||||||
Accounts
payable - related parties
|
22,661 | 97,854 | ||||||
Convertible
notes payable - related parties
|
230,802 | 100,000 | ||||||
Accrued
expenses - related parties
|
12,597 | 2,844 | ||||||
Advances
from related parties
|
- | 31,660 | ||||||
Total
current liabilities
|
339,685 | 307,452 | ||||||
Commitments
and contingencies
|
||||||||
STOCKHOLDERS'
(DEFICIT)
|
||||||||
Preferred
stock, $0.001 par value; authorized 12,500 shares; no shares
issued
|
||||||||
and
outstanting; $100 per share liquidation preference
|
- | - | ||||||
Common
stock, $.001 par value; authorized 100,000,000 shares;
50,925,820
|
||||||||
shares
issued and outstanding at June 30, 2010 and September 30,
2009
|
50,926 | 50,926 | ||||||
Additional
paid-in capital
|
9,946,022 | 9,946,022 | ||||||
Non-controlling
interest
|
(126,340 | ) | - | |||||
Accumulated
other comprehensive income (loss)
|
(91,060 | ) | 31,085 | |||||
Accumulated
deficit:
|
||||||||
During
the development stage
|
(133,188 | ) | (97,895 | ) | ||||
Other
|
(9,876,854 | ) | (9,999,694 | ) | ||||
Total
accumulated deficit
|
(10,010,042 | ) | (10,097,589 | ) | ||||
Total
stockholders' (deficit)
|
(230,494 | ) | (69,556 | ) | ||||
Total
liabilities and stockholders' (deficit)
|
$ | 109,191 | $ | 237,896 |
DOUBLE
EAGLE HOLDINGS, LTD. AND SUBSIDIARY
|
(Development
Stage Companies)
|
Condensed
Consolidated Statements of Operations
|
Three
Months Ended June 30, 2010 and 2009
|
(Unaudited)
|
2010
|
2009
|
|||||||
(Restated)
|
||||||||
Revenue
|
||||||||
Management
income - related party
|
$ | 2,933 | $ | 2,567 | ||||
Total
income
|
2,933 | 2,567 | ||||||
Expenses:
|
||||||||
Related
party services
|
3,000 | 9,929 | ||||||
General
and administrative expense
|
5,861 | 12,725 | ||||||
Total
expenses
|
8,861 | 22,654 | ||||||
Loss
from operations
|
(5,928 | ) | (20,087 | ) | ||||
Other
income (expense):
|
||||||||
Interest
income - related party
|
1,309 | - | ||||||
Interest
expense - related party
|
(5,409 | ) | (2,295 | ) | ||||
Realized
loss on related party investment
|
- | (24,500 | ) | |||||
Other
income (expense)
|
(4,100 | ) | (26,795 | ) | ||||
Net
loss before non-controlling interest
|
(10,028 | ) | (46,882 | ) | ||||
Non-controlling
interest
|
- | 1,140 | ||||||
Net
loss
|
(10,028 | ) | (45,742 | ) | ||||
Other
comprehensive income (loss)
|
||||||||
Unrealized
gain (loss) on available-for-sale securities (none attributed to the
non-controlling interest)
|
22,552 | 102,126 | ||||||
Net
comprehensive income (loss)
|
$ | 12,524 | $ | 56,384 | ||||
Loss
per share, basic and diluted
|
$ | (0.00 | ) | $ | (0.00 | ) | ||
Weighted
average shares outstanding
|
50,925,820 | 50,925,820 |
DOUBLE
EAGLE HOLDINGS, LTD. AND SUBSIDIARY
|
(Development
Stage Companies)
|
Condensed
Consolidated Statements of Operations
|
Nine
Months Ended June 30, 2010 and 2009 and from Inception
|
(January
20, 2009) through June 30, 2010
|
(Unaudited)
|
Development
|
||||||||||||
Stage
|
||||||||||||
Inception
|
||||||||||||
(January
20, 2009)
|
||||||||||||
Through
|
||||||||||||
2010
|
2009
|
June 30, 2010
|
||||||||||
(Restated)
|
||||||||||||
Revenue
|
||||||||||||
Management
income - related party
|
$ | 8,800 | $ | 2,567 | $ | 11,367 | ||||||
Total
income
|
8,800 | 2,567 | 11,367 | |||||||||
Expenses:
|
||||||||||||
Related
party services
|
9,000 | 48,908 | 67,039 | |||||||||
General
and administrative expense
|
20,259 | 66,193 | 36,405 | |||||||||
Total
expenses
|
29,259 | 115,101 | 103,444 | |||||||||
Loss
from operations
|
(20,459 | ) | (112,534 | ) | (92,077 | ) | ||||||
Other
income (expense):
|
||||||||||||
Interest
income - related party
|
4,700 | 4,687 | 9,387 | |||||||||
Interest
expense - related party
|
(9,753 | ) | (1,332 | ) | (12,597 | ) | ||||||
Realized
gain (loss) - related party
|
- | (24,500 | ) | (24,500 | ) | |||||||
Other
than temporary decline in available-for-sale
|
||||||||||||
securities
|
(13,280 | ) | - | (16,900 | ) | |||||||
Other
income (expense)
|
(18,333 | ) | (21,145 | ) | (44,610 | ) | ||||||
Net
loss before non-controlling interest
|
(38,792 | ) | (133,679 | ) | (136,687 | ) | ||||||
Non-controlling
interest
|
- | 19,482 | 3,499 | |||||||||
Net
loss
|
(38,792 | ) | (114,197 | ) | (133,188 | ) | ||||||
Other
comprehensive income (loss)
|
||||||||||||
Unrealized
gain (loss) on available-for-sale securities (none attributed to the
non-controlling interest)
|
(122,145 | ) | (205,974 | ) | (163,531 | ) | ||||||
Net
comprehensive loss
|
$ | (160,937 | ) | $ | (320,171 | ) | $ | (296,719 | ) | |||
Loss
per share, basic and diluted
|
$ | (0.00 | ) | $ | (0.00 | ) | ||||||
Weighted
average shares outstanding
|
50,925,820 | 50,925,820 |
DOUBLE
EAGLE HOLDINGS, LTD. AND SUBSIDIARY
|
(Development
Stage Companies)
|
Condensed
Consolidated Statements of Cash Flows
|
Nine
Months Ended June 30, 2010 and 2009 and from Inception
|
(January
20, 2009) through June 30, 2010
|
(Unaudited)
|
Development
|
||||||||||||
Stage
|
||||||||||||
Inception
|
||||||||||||
(January
20, 2009)
|
||||||||||||
Through
|
||||||||||||
2010
|
2009
|
June 30, 2010
|
||||||||||
(Restated)
|
||||||||||||
Operating
activities:
|
||||||||||||
Net
loss
|
$ | (38,792 | ) | $ | (114,197 | ) | $ | (133,188 | ) | |||
Adjustments
to reconcile net increase (decrease) in net assets
|
||||||||||||
from
operations to net cash used in operating activities:
|
||||||||||||
Other
than temporary decline in available-for-sale securities
|
13,280 | - | 16,900 | |||||||||
Gain
(loss) on sale/impairment of investment in related party
|
- | 24,500 | 24,500 | |||||||||
Non-controlling
interest
|
- | (19,482 | ) | (3,499 | ) | |||||||
Amortization
of deferred revenue - related party
|
(8,800 | ) | - | (8,800 | ) | |||||||
Changes
in operating assets and liabilities:
|
||||||||||||
Accounts
receivable and accrued interest - related parties
|
(4,701 | ) | (919 | ) | (9,387 | ) | ||||||
Accounts
payable and accrued expenses
|
(1,470 | ) | 43,314 | 26,792 | ||||||||
Accounts
payable and accrued expenses - related parties
|
9,753 | (4,354 | ) | 43,409 | ||||||||
Net
cash used in operating activities
|
(30,730 | ) | (71,138 | ) | (43,273 | ) | ||||||
Investing
activities:
|
||||||||||||
Proceeds
from investments
|
6,500 | 45,000 | 6,500 | |||||||||
Net
cash used in investing activities
|
6,500 | 45,000 | 6,500 | |||||||||
Financing
activities:
|
||||||||||||
Common
stock issued for cash
|
- | 10,000 | - | |||||||||
Advances
from related parties for working capital
|
23,950 | 6,660 | 30,610 | |||||||||
Net
cash used in investing activities
|
23,950 | 16,660 | 30,610 | |||||||||
Net
increase (decrease) in cash and cash equivalents
|
(280 | ) | (9,478 | ) | (6,163 | ) | ||||||
Cash
and cash equivalents, beginning of period
|
582 | 10,886 | 6,465 | |||||||||
Cash
and cash equivalents, end of period
|
$ | 302 | $ | 1,408 | $ | 302 | ||||||
Supplemental
Cash Flow Information:
|
||||||||||||
Cash
paid for interest and income taxes:
|
||||||||||||
Interest
|
$ | - | $ | - | $ | - | ||||||
Income
taxes
|
- | - | - | |||||||||
Non-cash
investing and financing activities:
|
||||||||||||
Note
payable issued to acquire investment
|
$ | - | $ | - | $ | 100,000 | ||||||
Accrued
interest receivable included in amended notes
|
5,326 | - | 8,915 | |||||||||
Convertible
notes payable issued for advances from affiliates
|
63,310 | - | 63,310 | |||||||||
Convertible
notes payable issued for accounts payable to affiliates
|
67,493 | - | 67,493 |
·
|
Trading
securities reported at fair value with unrealized gains and losses
included in earnings;
|
·
|
Available-for-sale
securities reported at fair value with unrealized gains and losses, net of
applicable deferred income taxes, reported in other comprehensive
income;
|
·
|
Held-to-maturity
securities and other investments reported at amortized cost;
and
|
·
|
Investments
using the equity method of
accounting.
|
Periods Ended
June 30, 2009 |
||||||||
Three
|
Nine
|
|||||||
Months
|
Months
|
|||||||
Net
loss, as originally reported
|
$ | (315,236 | ) | $ | (656,932 | ) | ||
Unrealized
loss on marketable equity securities included in
operations
|
(72,376 | ) | 235,724 | |||||
Realized
loss on related party investments
|
(24,500 | ) | (24,500 | ) | ||||
Elimination
of management fee charged portfolio company
|
- | (7,500 | ) | |||||
Elimination
of interest charged on note written off September 30, 2008
|
(5,081 | ) | (7,663 | ) | ||||
Asset
impairment
|
173,825 | 173,825 | ||||||
Expenses
accrued in prior periods, net
|
196,486 | 153,367 | ||||||
Net
loss before noncontrolled interest
|
(46,882 | ) | (133,679 | ) | ||||
Noncontrolled
interest
|
1,140 | 11,142 | ||||||
Net
loss as restated
|
(45,742 | ) | (122,537 | ) | ||||
Other
comprehensive income (loss):
|
||||||||
Unrealized
loss on available-for-sale securities
|
102,126 | (308,100 | ) | |||||
Net
comprehensive income (loss)
|
$ | 56,384 | $ | (430,637 | ) | |||
Net
loss per share, basic and diluted:
|
||||||||
As
originally reported
|
$ | (0.01 | ) | $ | (0.01 | ) | ||
Restated
|
$ | (0.00 | ) | $ | (0.00 | ) |
June
30,
|
September
30,
|
|||||||
2010
|
2009
|
|||||||
Available-for-sale
securities - affiliates
|
$ | 82,869 | $ | 179,495 | ||||
Notes
receivable due from affiliate, Efftec International, Inc.
("EFFI")
|
||||||||
Principal
|
23,916 | 55,089 | ||||||
Accrued
interest
|
2,104 | 2,730 | ||||||
$ | 26,020 | $ | 57,819 |
Unrecognized
|
||||||||||||||||
Realized
|
Holding
|
|||||||||||||||
Holding
|
Gains
|
|
Fair
|
|||||||||||||
Cost
|
Losses
|
(Losses)
|
Value
|
|||||||||||||
June 30,
2010
|
||||||||||||||||
Efftec
International, Inc.
|
$ | 38,400 | $ | - | $ | 33,866 | $ | 72,266 | ||||||||
North
American Energy
|
135,530 | - | (124,927 | ) | 10,603 | |||||||||||
$ | 173,930 | $ | - | $ | (91,061 | ) | $ | 82,869 | ||||||||
September 30,
2009
|
||||||||||||||||
Efftec
International, Inc.
|
$ | 12,880 | $ | - | $ | - | $ | 12,880 | ||||||||
North
American Energy
|
135,530 | - | 31,085 | 166,615 | ||||||||||||
$ | 148,410 | $ | - | $ | 31,085 | $ | 179,495 |
Unrecognized
|
||||||||||||||||
Realized
|
Holding
|
|||||||||||||||
Holding
|
Gains
|
Fair
|
||||||||||||||
Cost
|
Losses
|
(Losses)
|
Value
|
|||||||||||||
June 30,
2010
|
||||||||||||||||
Efftec
International, Inc.
|
$ | 38,400 | $ | - | $ | 33,866 | $ | 72,266 | ||||||||
North
American Energy
|
135,530 | - | (124,927 | ) | 10,603 | |||||||||||
$ | 173,930 | $ | - | $ | (91,061 | ) | $ | 82,869 | ||||||||
September 30,
2009
|
||||||||||||||||
Efftec
International, Inc.
|
$ | 12,880 | $ | - | $ | - | $ | 12,880 | ||||||||
North
American Energy
|
135,530 | - | 31,085 | 166,615 | ||||||||||||
$ | 148,410 | $ | - | $ | 31,085 | $ | 179,495 |
2010
|
2009
|
|||||||
Notes
and accrued interest receivable - affiliates
|
||||||||
Efftec
International, Inc.
|
$ | 26,020 | $ | 57,819 | ||||
26,020 | 57,819 |
2010
|
2009
|
|||||||
G.
David Gordon & Associates, P.C. and G. David Gordon
|
$ | 2,162 | $ | 55,354 | ||||
Hank
Durschlag
|
18,000 | 6,000 | ||||||
Ross
Silvey
|
2,500 | 2,500 | ||||||
BJB
Services, Inc.
|
- | 34,000 | ||||||
$ | 22,662 | $ | 97,854 |
Date
|
Int. Rate
|
2010
|
2009
|
|||||||||||
Avenel
Financial Group
|
4/10/2009
|
6 | % | $ | 100,000 | $ | 100,000 | |||||||
Amy
Gordon
|
2/26/2010
|
12 | % | 5,000 | - | |||||||||
Chef
on the Go
|
2/26/2010
|
12 | % | 2,660 | - | |||||||||
Progressive
Capital
|
2/26/2010
|
12 | % | 25,650 | - | |||||||||
Avenel
Financial Group
|
2/26/2010
|
12 | % | 20,000 | - | |||||||||
MLM
Concepts, LLC
|
2/26/2010
|
12 | % | 10,000 | - | |||||||||
Avenel
Financial Group
|
3/1/2010
|
12 | % | 32,492 | ||||||||||
BJB
Services, Inc.
|
3/1/2010
|
12 | % | 35,000 | ||||||||||
$ | 230,802 | $ | 100,000 |
2010
|
2009
|
|||||||
Non-interest
bearing advances from affiliates:
|
||||||||
Avenel
Financial Group
|
$ | - | $ | 20,000 | ||||
MLM
Concepts
|
- | 5,000 | ||||||
Chef-on-the-Go
|
- | 1,660 | ||||||
G.
David Gordon
|
- | 5,000 | ||||||
- | 31,660 |
2010
|
2009
|
|||||||
Affiliates
|
$ | 12,597 | $ | 2,844 |
2010
|
2009
|
|||||||
Management
income - Efftec International, Inc.
|
$ | 8,800 | $ | - |
2010
|
2009
|
|||||||
Interest
income - Efftec International, Inc.
|
$ | 4,700 | $ | 4,687 |
2010
|
2009
|
|||||||
Related
party expenses:
|
||||||||
Director
fees - Ross Silvey
|
$ | - | $ | 3,000 | ||||
Legal
fees - G. David Gordon & Associates, P.C.
|
- | 32,681 | ||||||
CEO
compensation - Hank Durschlag
|
9,000 | 13,227 | ||||||
$ | 9,000 | $ | 48,908 |
Balance
|
Balance
|
|||||||||||
September
30,
|
October
1,
|
|||||||||||
2009
|
Adjustment
|
2009
|
||||||||||
Noncontrolling
interest
|
$ | - | $ | (126,340 | ) | $ | (126,340 | ) | ||||
Accumulated
deficit:
|
||||||||||||
During
the development stage
|
(97,895 | ) | 3,499 | (94,396 | ) | |||||||
Other
|
(9,999,694 | ) | 122,841 | (9,876,853 | ) | |||||||
$ | (10,097,589 | ) | $ | 126,340 | $ | (9,971,249 | ) |
·
|
Related
party services declined from $9,929 in 2009 to $3,000 in
2010. The Company is not currently paying director fees and has
reduced the CEO compensation from $2,000 per month to $1,000 per
month. The 2009 period also included legal expenses which did
not repeat in 2010.
|
·
|
Other
general and administrative expense declined from $12,725 in 2009 to $5,861
in 2010. This decline is primarily the elimination of costs
associated with USN's
website.
|
2010
|
2009
|
|||||||
Interest
income - related party
|
$ | 1,309 | $ | - | ||||
Interest
expense - related party
|
(5,409 | ) | (2,295 | ) | ||||
Realized
loss on related party investments
|
- | (24,500 | ) | |||||
$ | (4,100 | ) | $ | (26,795 | ) |
·
|
Related
party services declined from $48,908 in 2009 to $9,000 in
2010. The Company is not currently paying director fees and has
reduced the CEO compensation from $2,000 per month to $1,000 per
month. The 2009 period also included legal expenses which did
not repeat in 2010.
|
·
|
Other
general and administrative expense declined from $66,193 in 2009 to
$20,259 in 2010. This decline is primarily the elimination of
costs associated with USN's
website.
|
2010
|
2009
|
|||||||
Interest
income - related party
|
$ | 4,700 | $ | 4,687 | ||||
Interest
expense - related party
|
(9,753 | ) | (1,332 | ) | ||||
Realized
loss on related party investments
|
- | (24,500 | ) | |||||
Other
than temporary decline in available-for-sale
|
||||||||
securities
|
(13,280 | ) | - | |||||
$ | (18,333 | ) | $ | (21,145 | ) |
·
|
None.
|
·
|
None.
|
31.1
|
Certification
pursuant to 18 U.S.C. Section 1350 Section 302 of the Sarbanes-Oxley Act
of 2002
|
32.1
|
Certification
pursuant to 18 U.S.C. Section 1350 Section 906 of the Sarbanes-Oxley Act
of 2002
|
DOUBLE
EAGLE HOLDINGS, LTD.
|
|||
August 13, 2010 |
By:
|
/s/M.E. Durschlag | |
M.E.
Durschlag, President,
|
|||
Chief
Executive Officer and
|
|||
Chief
Financial Officer
|