NEVADA
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87-0460247
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(State
or other jurisdiction of
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(IRS
Employer
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incorporation
or organization)
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Identification
No.)
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Page
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No.
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Part
I
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Financial
Information
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Item
1:
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Condensed
Consolidated Financial Statements (Unaudited)
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Balance
Sheets as of December 31, 2009 and September 30, 2009
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3
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Statements
of Operations – For the Three Months Ended December 31, 2009 and 2008 and
from inception (January 20, 2009) through December 31,
2009
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4
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Statements
of Cash Flows – For the Three Months Ended December 31, 2009 and 2008 and
from inception (January 20, 2009) through December 31,
2009
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5
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Notes
to Financial Statements
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6
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Item
2:
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
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19
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Item
3:
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Quantitative
and Qualitative Disclosure about Market Risk
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22
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Item
4:
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Controls
and Procedures
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22
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Part
II
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Other
Information
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23
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Item
1:
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Legal
Proceedings
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23
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Item
1A:
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Risk
Factors
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23
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Item
2:
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Unregistered
Sales of Equity Securities and Use of Proceeds
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23
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Item
3:
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Defaults
Upon Senior Securities
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23
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Item
4:
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Submission
of Matters to a Vote of Security Holders
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23
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Item
5:
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Other
Information
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23
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Item
6:
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Exhibits
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23
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Signatures
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24
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Exhibits
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December 31,
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September 30,
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|||||||
2009
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2009
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ASSETS
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||||||||
Current
assets:
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||||||||
Cash
and cash equivalents
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$ | 2,407 | $ | 582 | ||||
TOTAL
CURRENT ASSETS
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2,407 | 582 | ||||||
Available-for-sale
investments - affiliates
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26,576 | 179,495 | ||||||
Notes
and accrued interest receivable - affiliate
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59,619 | 57,819 | ||||||
$ | 88,602 | $ | 237,896 | |||||
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
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||||||||
LIABILITIES
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||||||||
Accounts
payable
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74,465 | 75,094 | ||||||
Accounts
payable - related parties
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81,154 | 97,854 | ||||||
Convertible
notes payable - related party
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100,000 | 100,000 | ||||||
Accrued
expenses - related party
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4,356 | 2,844 | ||||||
Deferred
revenue - related party
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7,333 | - | ||||||
Advances
from related parties
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63,310 | 31,660 | ||||||
TOTAL
CURRENT LIABILITIES
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330,618 | 307,452 | ||||||
Commitments
and contingencies
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||||||||
STOCKHOLDERS'
EQUITY (DEFICIT)
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||||||||
Preferred
stock, $0.001 par value; authorized 12,500 shares; no shares issued and
outstanting; $100 per share liquidation preference
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- | - | ||||||
Common
stock, $.001 par value; authorized 100,000,000 shares; 50,925,820 shares
issued and outstanding at December 31, 2009 and September 30,
2009
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50,926 | 50,926 | ||||||
Additional
paid-in capital
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9,946,022 | 9,946,022 | ||||||
Non-controlling
interest
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(126,340 | ) | - | |||||
Accumulated
other comprehensive income (loss)
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(117,354 | ) | 31,085 | |||||
Accumulated
deficit:
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||||||||
During
the development stage
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(118,417 | ) | (97,895 | ) | ||||
Other
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(9,876,853 | ) | (9,999,694 | ) | ||||
Total
accumulated deficit
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(9,995,270 | ) | (10,097,589 | ) | ||||
Total
stockholders' equity (deficit)
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(242,016 | ) | (69,556 | ) | ||||
Total
liabilities and stockholders' equity (deficit)
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$ | 88,602 | $ | 237,896 |
Development
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Stage
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||||||||||||
Inception
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||||||||||||
(January 20, 2009)
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Through
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||||||||||||
2009
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2008
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December 31, 2009
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||||||||||
Revenue
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||||||||||||
Management
income - related party
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$ | 1,467 | $ | - | $ | 4,034 | ||||||
Total
income
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1,467 | - | 4,034 | |||||||||
Expenses:
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||||||||||||
Related
party services
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6,000 | 24,869 | 64,039 | |||||||||
General
and administrative expense
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6,495 | 31,876 | 22,641 | |||||||||
12,495 | 56,745 | 86,680 | ||||||||||
Loss
from operations
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(11,028 | ) | (56,745 | ) | (82,646 | ) | ||||||
Other
income (expense):
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||||||||||||
Interest
income - related party
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1,799 | 1,579 | 6,486 | |||||||||
Interest
expense - related party
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(1,512 | ) | - | (4,356 | ) | |||||||
Realized
gain (loss) - related party
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- | - | (24,500 | ) | ||||||||
Other
than temporary decline in available-for-sale securities
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(13,280 | ) | - | (16,900 | ) | |||||||
Other
income (expense)
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(12,993 | ) | 1,579 | (39,270 | ) | |||||||
Loss
before income taxes
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(24,021 | ) | (55,166 | ) | (121,916 | ) | ||||||
Income
taxes
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- | - | - | |||||||||
Net
loss before non-controlling interest
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(24,021 | ) | (55,166 | ) | (121,916 | ) | ||||||
Non-controlling
interest
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- | 17,136 | 3,499 | |||||||||
Net
loss
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(24,021 | ) | (38,030 | ) | (118,417 | ) | ||||||
Other
comprehensive income (loss)
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||||||||||||
Unrealized
gain (loss) on available-for-sale securities (none attributed to the
non-controlling interest)
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(148,439 | ) | (207,000 | ) | (189,824 | ) | ||||||
Net
comprehensive loss
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$ | (172,460 | ) | $ | (245,030 | ) | $ | (308,241 | ) | |||
Loss
per share, basic and diluted
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$ | (0.00 | ) | $ | (0.00 | ) | ||||||
Weighted
average shares outstanding
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50,925,820 | 50,795,385 |
Development
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||||||||||||
Stage
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||||||||||||
Inception
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||||||||||||
(January 20, 2009)
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Through
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||||||||||||
2009
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2008
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December 31, 2009
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||||||||||
Operating
activities:
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Net
loss
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$ | (24,021 | ) | $ | (38,030 | ) | $ | (118,417 | ) | |||
Adjustments
to reconcile net increase (decrease) in net assets from operations to net
cash used in operating activities:
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Other
than temporary decline in available-for-sale securities
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13,280 | - | 16,900 | |||||||||
Gain
(loss) on sale/impairment of investment in related party
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- | - | 24,500 | |||||||||
Non-controlling
interest
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- | (17,136 | ) | (3,499 | ) | |||||||
Amortization
of deferred revenue - related party
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(1,467 | ) | - | (1,467 | ) | |||||||
Changes
in operating assets and liabilities:
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||||||||||||
Accounts
receivable and accrued interest - related parties
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(1,800 | ) | 2,189 | (6,486 | ) | |||||||
Accounts
payable and accrued expenses
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(629 | ) | 18,026 | 27,633 | ||||||||
Accounts
payable and accrued expenses - related parties
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(15,188 | ) | 15,530 | 18,468 | ||||||||
Net
cash used in operating activities
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(29,825 | ) | (19,421 | ) | (42,368 | ) | ||||||
Investing
activities:
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Net
cash used in investing activities
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- | - | - | |||||||||
Financing
activities:
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Common
stock issued for cash
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- | 10,000 | - | |||||||||
Advances
from related parties for working capital
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31,650 | 5,000 | 38,310 | |||||||||
Net
cash used in investing activities
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31,650 | 15,000 | 38,310 | |||||||||
Net
increase (decrease) in cash and cash equivalents
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1,825 | (4,421 | ) | (4,058 | ) | |||||||
Cash
and cash equivalents, beginning of period
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582 | 10,886 | 6,465 | |||||||||
Cash
and cash equivalents, end of period
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$ | 2,407 | $ | 6,465 | $ | 2,407 | ||||||
Supplemental
Cash Flow Information:
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Cash
paid for interest and income taxes:
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||||||||||||
Interest
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$ | - | $ | - | $ | - | ||||||
Income
taxes
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- | - | - | |||||||||
Non-cash
investing and financing activities:
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||||||||||||
Note
payable issued to acquire investment
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$ | - | $ | - | $ | 100,000 | ||||||
Accrued
interest receivable included in amended note
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- | - | 3,589 |
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·
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Trading
securities reported at fair value with unrealized gains and losses
included in earnings;
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·
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Available-for-sale
securities reported at fair value with unrealized gains and losses, net of
applicable deferred income taxes, reported in other comprehensive
income;
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·
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Held-to-maturity
securities and other investments reported at amortized cost;
and
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·
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Investments
using the equity method of
accounting.
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2.
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RESTATEMENT
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2008
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Net
decrease in net assets from opeations, as originally
reported
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$ | (202,375 | ) | |
Net
loss of majority owned subsidiary not previously
consolidated
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(42,839 | ) | ||
Net
loss before other adjustments
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(245,214 | ) | ||
Unrealized
loss on marketable equity securities included in
operations
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207,000 | |||
Elimination
of management fee charged portfolio company
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(7,500 | ) | ||
Elimination
of interest charged on note written off September 30, 2008
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(2,582 | ) | ||
Expenses
accrued
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(6,870 | ) | ||
Net
loss before noncontrolled interest
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(55,166 | ) | ||
Noncontrolled
interest
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17,136 | |||
Net
loss as restated
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(38,030 | ) | ||
Other
comprehensive income (loss):
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Unrealized
loss on available-for-sale securities
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(207,000 | ) | ||
Net
comprehensive loss
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$ | (245,030 | ) | |
Net
loss per share, basic and diluted:
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As
originally reported
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$ | (0.00 | ) | |
Restated
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$ | (0.00 | ) |
3.
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INVESTMENTS
IN AFFILIATES
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December 31,
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September 30,
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|||||||
2009
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2009
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Available-for-sale
securities - affiliates
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$ | 26,576 | $ | 179,495 | ||||
Notes
receivable due from affiliate, Efftec International, Inc.
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Principal
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55,089 | 55,089 | ||||||
Accrued
interest
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4,530 | 2,730 | ||||||
59,619 | 57,819 |
Realized
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Unrecognized
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|||||||||||||||
Holding
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Holding
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Fair
|
||||||||||||||
Cost
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Losses
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Gains (Losses)
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Value
|
|||||||||||||
December 31, 2009
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Efftec
International, Inc.
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$ | 21,680 | $ | (13,280 | ) | $ | - | $ | 8,400 | |||||||
North
American Energy
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135,530 | - | (117,354 | ) | 18,176 | |||||||||||
$ | 157,210 | $ | (13,280 | ) | $ | (117,354 | ) | $ | 26,576 | |||||||
September 30, 2009
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Efftec
International, Inc.
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$ | 12,880 | $ | - | $ | - | $ | 12,880 | ||||||||
North
American Energy
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135,530 | - | 31,085 | 166,615 | ||||||||||||
$ | 148,410 | $ | - | $ | 31,085 | $ | 179,495 |
4.
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RELATED
PARTY TRANSACTIONS
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Realized
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Unrecognized
|
|||||||||||||||
Holding
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Holding
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Fair
|
||||||||||||||
Cost
|
Losses
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Gains (Losses)
|
Value
|
|||||||||||||
December 31, 2009
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Efftec
International, Inc.
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$ | 21,680 | $ | (13,280 | ) | $ | - | $ | 8,400 | |||||||
North
American Energy
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135,530 | - | (117,354 | ) | 18,176 | |||||||||||
$ | 157,210 | $ | (13,280 | ) | $ | (117,354 | ) | $ | 26,576 | |||||||
September 30, 2009
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Efftec
International, Inc.
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$ | 12,880 | $ | - | $ | - | $ | 12,880 | ||||||||
North
American Energy
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135,530 | - | 31,085 | 166,615 | ||||||||||||
$ | 148,410 | $ | - | $ | 31,085 | $ | 179,495 |
2009
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2008
|
|||||||
Notes
and accrued interest receivable - affiliates
|
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Efftec
International, Inc.
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$ | 59,619 | $ | 57,819 | ||||
59,619 | 57,819 | |||||||
Accounts
payable - related parties:
|
||||||||
G.
David Gordon & Associates, P.C. and G. David Gordon
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$ | 34,654 | $ | 55,354 | ||||
Hank
Durschlag
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12,000 | 9,000 | ||||||
BJB
Services, Inc.
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32,000 | 31,000 | ||||||
Ross
Silvey
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2,500 | 2,500 | ||||||
81,154 | 97,854 | |||||||
Notes
payable - affiliate - Avenel Financial Group
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$ | 100,000 | $ | 100,000 | ||||
Accrued
interest - affiliate - Avenel Financial Group
|
$ | 4,356 | $ | 2,844 | ||||
Non-interest
bearing advances from affiliates:
|
||||||||
Avenel
Financial Group
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$ | 20,000 | $ | 20,000 | ||||
Joel
Holt
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25,650 | - | ||||||
MLM
Concepts
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10,000 | 5,000 | ||||||
Chef-on-the-Go
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2,660 | 1,660 | ||||||
G.
David Gordon
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5,000 | 5,000 | ||||||
63,310 | 31,660 | |||||||
Deferred
revenue - Efftec International, Inc.
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7,333 | - |
2009
|
2008
|
|||||||
Management
income - related party
|
||||||||
Efftec
International, Inc.
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$ | 1,467 | - | |||||
1,467 | - | |||||||
Interest
income - affiliates
|
||||||||
Efftec
International, Inc.
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$ | 1,799 | $ | 1,579 | ||||
1,799 | 1,579 | |||||||
Related
party expenses:
|
||||||||
Director
fees - Ross Silvey
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- | 3,000 | ||||||
Legal
fees - G. David Gordon & Associates, PC
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- | 6,869 | ||||||
Accounting
services - BJB Services, Inc.
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3,000 | 9,000 | ||||||
CEO
compensation - Hank Durschlag
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3,000 | 6,000 | ||||||
6,000 | 24,869 | |||||||
Unrealized
gains (losses) on available-for-sale securities of
affiliates:
|
||||||||
Efftec
International, Inc.
|
$ | - | $ | 28,500 | ||||
North
American Energy Resources, Inc.
|
(148,439 | ) | (235,500 | ) | ||||
(148,439 | ) | (207,000 | ) |
Balance
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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 $24,869 in 2009 to $6,000 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.
|
|
·
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Other
general and administrative expense declined from $31,876 in 2009 to $6,495
in 2010. This decline is primarily the elimination of costs
associated with USN's website.
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ITEM
3:
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QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
ITEM 4:
|
CONTROLS
AND PROCEDURES
|
ITEM 1:
|
LEGAL
PROCEEDINGS
|
ITEM 1A:
|
RISK
FACTORS
|
ITEM
2:
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
|
ITEM 3:
|
DEFAULTS
UPON SENIOR SECURITIES
|
ITEM 4:
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY
HOLDERS
|
ITEM 5:
|
OTHER
INFORMATION
|
ITEM 6:
|
EXHIBITS
|
|
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.
|
||
February
22, 2010
|
By: /s/M.E. Durschlag
|
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M.E.
Durschlag, President,
|
||
Chief
Executive Officer and
|
||
Chief
Financial Officer
|