Formatting: .5 Left, .5 Right, 1' Top and Bottom
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934
For the Fiscal Year Ended September 30, 2000
Transition Report Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934
Commission File Number 0-26067
EAGLES NEST MINING COMPANY
(Name of small business issuer in its charter)
Idaho 87-0571300
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
253 Ontario #1, P.O. Box 3303, Park City, Utah 84060
(Address of principal executive offices) (Zip Code)
Issuer's telephone no.: (435) 649-5060
Securities registered pursuant to Section 12(b) of the Exchange
Act: None
Securities registered pursuant to Section 12(g) of the Exchange
Act: Common
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12
months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No
Check if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-B contained in this form, and
no disclosure will be contained, to the best of the 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. [ ]
State the issuer's revenues for its most recent fiscal year.
$ -0-
State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the price at which the
stock was sold, or the average bid and ask prices of such stock as
of a specified date within 60 days. $ 0
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date.
Class Outstanding as of January 12, 2001
Common Stock, No Par Value 1,392,700
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DOCUMENTS INCORPORATED BY REFERENCE
NONE
Transitional Small Business Disclosure Format. Yes No [X]
EAGLES NEST MINING COMPANY
TABLE OF CONTENTS
Page
PART I
Item 1. Description of Business . . . . . . . . . . . . . . . 3
Item 2. Description of Property. . . . . . . . . . . . . . . . 9
Item 3. Legal Proceedings. . . . . . . . . . . . . . . . . . . 9
Item 4. Submission of Matter to a Vote of Security
Holders. . . . . . . . . . . . . . . . . . . . . . . . 9
PART II
Item 5. Market for Common Equity and Related
Stockholder Matters. . . . . . . . . . . . . . . . . . 10
Item 6. Management's Discussion and Analysis or
Plan of Operation. . . . . . . . . . . . . . . . . . . 13
Item 7. Financial Statements . . . . . . . . . . . . . . . . . 17
Item 8. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure . . . . . . . . 26
PART III
Item 9. Directors, Executive Officers, Promoters and
Control persons; Compliance with
Section 16(a) of the Exchange Act. . . . . . . . . . . 26
Item 10. Executive Compensation . . . . . . . . . . . . . . . . 29
Item 11. Security Ownership of Certain Beneficial
Owners and Management. . . . . . . . . . . . . . . . . 29
Item 12. Certain Relationships and Related
Transactions . . . . . . . . . . . . . . . . . . . . . 30
Item 13. Exhibits and Reports on Form 8-K . . . . . . . . . . . 31
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . 32
<PAGE>
PART I
Item 1. Description of Business
Business Development
Eagles Nest Mining Company (the "Company") was organized on
September 14, 1987, under the laws of the State of Idaho. As set
forth in its Articles of Incorporation, the Company was created to
engage in the business of acquiring and developing mining claims
and prospecting, developing, processing and marketing all types of
mineral resources. However, from the time of its inception the
Company has not engaged in any material business operations.
Presently, the Company is actively seeking potential operating
businesses and business opportunities with the intent to acquire or
merge with such businesses. The Company is considered a
development stage company and, due to its status as a "shell"
corporation, its principal purpose is to locate and consummate a
merger or acquisition with a private entity. Because of the
Company's current status having no assets and no operating history,
in the event the Company does successfully acquire or merge with an
operating business opportunity, it is likely that the Company's
current shareholders will experience substantial dilution and there
will be a probable change in control of the Company.
The Company voluntarily filed in May 1999 a registration
statement on Form 10-SB. As a result of filing its registration
statement, the Company is obligated to file with the Commission
certain interim and periodic reports including an annual report
containing audited financial statements. The Company intends to
continue to voluntarily file its periodic reports under the
Exchange Act in the event its obligation to file such reports is
suspended under applicable provisions of the Exchange Act.
Any target acquisition or merger candidate of the Company will
become subject to the same reporting requirements as the Company
upon consummation of any merger or acquisition. Thus, in the event
the Company successfully completes the acquisition of or merger
with an operating business opportunity, that business opportunity
must provide audited financial statements for at least the two most
recent fiscal years or, in the event the business opportunity has
been in business for less than two years, audited financial
statements will be required from the period of inception. This
could limit the Company's potential target business opportunities
due to the fact that many private business opportunities either do
not have audited financial statements or are unable to produce
audited statements without undo time and expense.
The Company's principal executive offices are located at 253
Ontario #1, P.O. Box 3303, Park City, Utah 84060, and its telephone
number is (435) 649-5060.
Business of Issuer
The Company has no operating history and no representation is
made, nor is any intended, that the Company will be able to carry
<PAGE>
on future business activities successfully. Further, there can be
no assurance that the Company will have the ability to acquire or
merge with an operating business, business opportunity or property
that will be of material value to the Company.
Management plans to investigate, research and, if justified,
potentially acquire or merge with one or more businesses or
business opportunities. The Company currently has no commitment or
arrangement, written or oral, to participate in any business
opportunity and management cannot predict the nature of any
potential business opportunity it may ultimately consider.
Management will have broad discretion in its search for and
negotiations with any potential business or business opportunity.
Sources of Business Opportunities
Management of the Company intends to use various resources in
the search for potential business opportunities including, but not
limited to, the Company's officers and directors, consultants,
special advisors, securities broker-dealers, venture capitalists,
members of the financial community and others who may present
management with unsolicited proposals. Because of the Company's
lack of capital, it may not be able to retain on a fee basis
professional firms specializing in business acquisitions and
reorganizations. Rather, the Company will most likely have to rely
on outside sources, not otherwise associated with the Company, that
will accept their compensation only after the Company has finalized
a successful acquisition or merger. To date, the Company has not
engaged or entered into any discussion, agreement or understanding
with a particular consultant regarding the Company's search for
business opportunities. Company management has in the past
consulted with Williams Investment Co. ("Williams"), a consulting
company located in Salt Lake City, Utah. Because there is no
agreement or understanding with Williams, the Company may use other
consultants if it so elects. However, due to its past experience,
the Company may use the consulting and advisory services of
Williams. Presently, no final decision has been made nor is
management in a position to identify any future prospective
consultants for the Company.
If the Company elects to engage an independent consultant, it
will look only to consultants that have experience in working with
small companies in search of an appropriate business opportunity.
Also, the consultant must have experience in locating viable merger
and/or acquisition candidates and have a proven track record of
finalizing such business consolidations. Further, the Company
would like to engage a consultant that will provide services for
only nominal up-front consideration and is willing to be fully
compensated only at the close of a business consolidation.
The Company does not intend to limit its search to any
specific kind of industry or business. The Company may investigate
and ultimately acquire a venture that is in its preliminary or
development stage, is already in operation, or in various stages of
its corporate existence and development. Management cannot predict
at this time the status or nature of any venture in which the
<PAGE>
Company may participate. A potential venture might need additional
capital or merely desire to have its shares publicly traded. The
most likely scenario for a possible business arrangement would
involve the acquisition of or merger with an operating business
that does not need additional capital, but which merely desires to
establish a public trading market for its shares.
Management believes that the Company could provide a potential
public vehicle for a private entity interested in becoming a
publicly held corporation without the time and expense typically
associated with an initial public offering.
Evaluation
Once the Company has identified a particular entity as a
potential acquisition or merger candidate, management will seek to
determine whether acquisition or merger is warranted or whether
further investigation is necessary. Such determination will
generally be based on management's knowledge and experience, or
with the assistance of outside advisors and consultants evaluating
the preliminary information available to them. Management may
elect to engage outside independent consultants to perform
preliminary analysis of potential business opportunities. However,
because of the Company's lack of capital it may not have the
necessary funds for a complete and exhaustive investigation of any
particular opportunity.
In evaluating such potential business opportunities, the
Company will consider, to the extent relevant to the specific
opportunity, several factors including potential benefits to the
Company and its shareholders; working capital, financial
requirements and availability of additional financing; history of
operation, if any; nature of present and expected competition;
quality and experience of management; need for further research,
development or exploration; potential for growth and expansion;
potential for profits; and other factors deemed relevant to the
specific opportunity.
Because the Company has not located or identified any specific
business opportunity as of the date hereof, there are certain
unidentified risks that cannot be adequately expressed prior to the
identification of a specific business opportunity. There can be no
assurance following consummation of any acquisition or merger that
the business venture will develop into a going concern or, if the
business is already operating, that it will continue to operate
successfully. Many of the potential business opportunities
available to the Company may involve new and untested products,
processes or market strategies which may not ultimately prove
successful.
Form of Potential Acquisition or Merger
Presently, the Company cannot predict the manner in which it
might participate in a prospective business opportunity. Each
separate potential opportunity will be reviewed and, upon the basis
of that review, a suitable legal structure or method of
participation will be chosen. The particular manner in which the
<PAGE>
Company participates in a specific business opportunity will depend
upon the nature of that opportunity, the respective needs and
desires of the Company and management of the opportunity, and the
relative negotiating strength of the parties involved.
Actual participation in a business venture may take the form of an
asset purchase, lease, joint venture, license, partnership, stock
purchase, reorganization, merger or consolidation. The Company may
act directly or indirectly through an interest in a partnership,
corporation, or other form of organization, however, the Company
does not intend to participate in opportunities through the
purchase of minority stock positions.
Because of the Company's current situation, having no assets
and no operating history, in the event the Company does
successfully acquire or merge with an operating business
opportunity, it is likely that the Company's present shareholders
will experience substantial dilution and there will be a probable
change in control of the Company. Most likely, the owners of the
business opportunity which the Company acquires or mergers with
will acquire control of the Company following such transaction.
Management has not established any guidelines as to the amount of
control it will offer to prospective business opportunities, rather
management will attempt to negotiate the best possible agreement
for the benefit of the Company's shareholders.
Management does not presently intend to borrow funds to
compensate any persons, consultants, promoters or affiliates in
relation to the consummation of a potential merger or acquisition.
However, if the Company engages outside advisors or consultants in
its search for business opportunities, it may be necessary for the
Company to attempt to raise additional funds. As of the date
hereof, the Company has not made any arrangements or definitive
agreements to use outside advisors or consultants or to raise any
capital. In the event the Company does need to raise capital, most
likely the only method available to the Company would be the
private sale of its securities. These possible private sales would
most likely have to be to persons known by the directors of the
Company or to venture capitalists that would be willing to accept
the risks associated with investing in a company with no current
operation. Because of the nature of the Company as a development
stage company, it is unlikely that it could make a public sale of
securities or be able to borrow any significant sum from either a
commercial or private lender. Management will attempt to acquire
funds on the best available terms for the Company. However, there
can be no assurance that the Company will be able to obtain
additional funding when and if needed, or that such funding, if
available, can be obtained on terms reasonable or acceptable to the
Company. Although not presently anticipated, there is a remote
possibility that the Company could sell securities to its
management or affiliates.
In the case of a future acquisition or merger, there exists a
possibility that a condition of such transaction might include the
sale of shares presently held by officers and/or directors of the
Company to parties affiliated with or designated by the potential
business opportunity. Presently, management has no plans to seek
<PAGE>
or actively negotiate such terms. However, if this situation does
arise, management is obligated to follow the Company's Articles of
Incorporation and all applicable corporate laws in negotiating such
an arrangement. Under this scenario of a possible sale by officers
and directors, it is unlikely that similar terms and conditions
would be offered to all other shareholders of the Company or that
the shareholders would be given the opportunity to approve such a
transaction.
In the event of a successful acquisition or merger, a finder's
fee, in the form of cash or securities, may be paid to persons
instrumental in facilitating the transaction. The Company has not
established any criteria or limits for the determination of a
finder's fee, although it is likely that an appropriate fee will be
based upon negotiations by the Company and the appropriate business
opportunity and the finder. Management cannot at this time make an
estimate as to the type or amount of a potential finder's fee that
might be paid. It is unlikely that a finder's fee will be paid to
an affiliate of the Company because of the potential conflict of
interest that might result. If such a fee was paid to an
affiliate, it would have to be in such a manner so as not to
compromise an affiliate's possible fiduciary duty to the Company or
to violate the doctrine of corporate opportunity. Further, in the
unlikely event a finder's fee was to be paid to an affiliate, the
Company would have such an arrangement ratified by the shareholders
in an appropriate manner.
Presently, it is highly unlikely that the Company will acquire
or merge with a business opportunity in which the Company's
management, affiliates or promoters have an ownership interest.
Any possible related party transaction of this type would have to
be ratified by a disinterested Board of Directors and by the
shareholders. Management does not anticipate that the Company will
acquire or merge with any related entity. Further, as of the date
hereof, none of the Company's officers, directors, or affiliates or
associates have had any preliminary contact or discussions with any
specific business opportunity, nor are there any present plans,
proposals, arrangements or understandings regarding the possibility
of an acquisition or merger with any specific business opportunity.
Rights of Shareholders
It is presently anticipated by management that prior to
consummating a possible acquisition or merger, the Company, if
required by relevant state laws and regulations, will seek to have
the transaction ratified by shareholders in the appropriate manner.
The Board of Directors will have the discretion to consummate an a
business combination if relevant state law does not mandate
shareholder approval. The Company intends to provide its
shareholders complete disclosure documentation concerning a
potential target business opportunity including the appropriate
audited financial statements of the target, if required. This
information will be disseminated by proxy statement in the event a
shareholders' meeting is held, or by subsequent report to the
shareholders if the action is taken by the Board.
<PAGE>
Competition
Because the Company has not identified any potential
acquisition or merger candidate, it is unable to evaluate the type
and extent of its likely competition. The Company is aware that
there are several other public companies with only nominal assets
that are also searching for operating businesses and other business
opportunities as potential acquisition or merger candidates. The
Company will be in direct competition with these other public
companies in its search for business opportunities and, due to the
Company's lack of funds, it may be difficult to successfully
compete with these other companies.
Employees
As of the date hereof, the Company does not have any employees
and has no plans for retaining employees until such time as the
Company's business warrants the expense, or until the Company
successfully acquires or merges with an operating business. The
Company may find it necessary to periodically hire part-time
clerical help on an as-needed basis.
Facilities
The Company is currently using as its principal place of
business the personal residence of its President located in Park
City, Utah. Although the Company has no written agreement and
pays no rent for the use of this facility, it is contemplated that
at such future time as the Company acquires or merges with an
operating business, the Company will secure commercial office space
from which it will conduct its business. However, until such time
as the Company completes an acquisition or merger, the type of
business in which the Company will be engaged and the type of
office and other facilities that will be required is unknown. The
Company has no current plans to secure such commercial office
space.
Industry Segments
No information is presented regarding industry segments. The
Company is presently a development stage company seeking a
potential acquisition of or merger with a yet to be identified
business opportunity. Reference is made to the statements of
income included herein in response to Part F/S of this Form 10-SB
for a report of the Company's operating history for the past two
fiscal years.
Item 2. Description of Property
The Company does not own any material property.
Item 3. Legal Proceedings
The Company is not a party to any material pending legal
proceedings and no such action by, or to the best of its knowledge,
against the Company has been threatened.
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the Company's
Securities Holders during the fourth quarter of the Company's
fiscal year ending September, 2000.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
The Company has made an application to have its Common Stock
traded in the over-the-counter market and quotations are published
on the OTC Bulletin Board. Its application has not been finalized
and no trading symbol has been assigned to the Company.
Inclusion on the OTC Bulletin Board permits price quotations
for the Company's shares to be published by such service. The
Company is not aware of any established trading market for its
common stock nor is there any record of any reported trades in the
public market in recent years. Although the Company anticipates
that its application to the OTC Bulletin Board will ultimately be
completed, the Company does not expect its shares to be traded
actively in the public market until such time as a merger or
acquisition can be consummated. Also, secondary trading of the
Company's shares may be subject to certain state imposed
restrictions regarding shares of shell companies. Except for the
application to the OTC Bulletin Board, there are no plans,
proposals, arrangements or understandings with any person
concerning the development of a trading market in any of the
Company's securities. Because no current trading market has been
established for the Company's securities, no trading history is
presented herein.
The ability of an individual shareholder to trade their shares
in a particular state may be subject to various rules and
regulations of that state. A number of states require that an
issuer's securities be registered in their state or appropriately
exempted from registration before the securities are permitted to
trade in that state. Presently, the Company has no plans to
register its securities in any particular state. Further, most
likely the Company's shares will be subject to the provisions of
Section 15(g) and Rule 15g-9 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), commonly referred to as the
"penny stock" rule. Section 15(g) sets forth certain requirements
for transactions in penny stocks and Rule 15g-9(d)(1) incorporates
the definition of penny stock as that used in Rule 3a51-1 of the
Exchange Act.
The Commission generally defines penny stock to be any equity
security that has a market price less than $5.00 per share, subject
to certain exceptions. Rule 3a51-1 provides that any equity
security is considered to be a penny stock unless that security is:
registered and traded on a national securities exchange meeting
specified criteria set by the Commission; authorized for quotation
on The NASDAQ Stock Market; issued by a registered investment
<PAGE>
company; excluded from the definition on the basis of price (at
least $5.00 per share) or the issuer's net tangible assets; or
exempted from the definition by the Commission. If the Company's
shares are deemed to be a penny stock, trading in the shares will
be subject to additional sales practice requirements on broker-
dealers who sell penny stocks to persons other than established
customers and accredited investors, generally persons with assets
in excess of $1,000,000 or annual income exceeding $200,000, or
$300,000 together with their spouse.
For transactions covered by these rules, broker-dealers must
make a special suitability determination for the purchase of such
securities and must have received the purchaser's written consent
to the transaction prior to the purchase. Additionally, for any
transaction involving a penny stock, unless exempt, the rules
require the delivery, prior to the first transaction, of a risk
disclosure document relating to the penny stock market. A broker-
dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative, and current
quotations for the securities. Finally, monthly statements must be
sent disclosing recent price information for the penny stocks held
in the account and information on the limited market in penny
stocks. Consequently, these rules may restrict the ability of
broker-dealers to trade and/or maintain a market in the Company's
common stock and may affect the ability of shareholders to sell
their shares.
As of September 30, 2000 there were 33 holders of record of
the Company's common stock, which figure does not take into account
those shareholders whose certificates are held in the name of
broker-dealers or other nominees. Because there has been no
established public trading market for the Company's securities, no
trading history is presented herein.
As of the date hereof, the Company has issued and outstanding
1,392,700 shares of common stock. In August 1997, the Company
issued 1,000,000 shares of common stock to J. Rockwell Smith for
the purchase price of $5,000 cash. The funds were used to pay
various payables including payments to certain persons for prior
services rendered to the Company. Also, in November 1997 the
Company issued 90,000 shares of common stock to two persons in
exchange for services rendered to the Company. No other shares of
the Company's common stock have been issued since 1997.
Of the Company's total outstanding shares, 142,700 may be
sold, transferred or otherwise traded in the public market without
restriction, unless held by an affiliate or controlling shareholder
of the Company. Of these 142,700 shares, the Company has not
identified any shares as being held by affiliates of the Company.
A total of 1,250,000 shares are considered restricted
securities and are presently held by affiliates and/or principal
shareholders of the Company. All 1,250,000 restricted shares are
presently eligible for sale pursuant to Rule 144, subject to the
volume and other limitations set forth under Rule 144. In general,
under Rule 144 as currently in effect, a person (or persons whose
<PAGE>
shares are aggregated) who has beneficially owned restricted shares
of the Company for at least one year, including any person who may
be deemed to be an "affiliate" of the Company (as the term
"affiliate" is defined under the Act), is entitled to sell, within
any three-month period, an amount of shares that does not exceed
the greater of (i) the average weekly trading volume in the
Company's common stock, as reported through the automated quotation
system of a registered securities association, during the four
calendar weeks preceding such sale or (ii) 1% of the shares then
outstanding. A person who is not deemed to be an "affiliate" of
the Company and has not been an affiliate for the most recent three
months, and who has held restricted shares for at least two years
would be entitled to sell such shares without regard to the resale
limitations of Rule 144.
Available corporate records indicate that the Company has not
previously filed a registration statement with the Commission.
In the absence of any evidence that the Company ever filed a
registration statement with the Commission or with any other agency
relating to the issuance of shares, it is concluded that all shares
were issued as restricted securities. Available corporate records
indicate that all of the Company's issued and outstanding shares of
common stock were issued between 1987 and 1997 in various private,
isolated transactions. The Company has relied upon the exemption
provided by Section 4(2) of the Act in the issuance of all of its
shares. No private placement memorandum was used in relation to
the issuance of shares.
In the absence of any evidence that the Company ever filed a
registration statement with the Commission or with any other agency
relating to the issuance of shares, it is concluded that all shares
were issued as restricted securities. Available corporate records
do not detail the circumstances related to all issuances of the
Company's shares. Therefore no conclusion can be made as to
whether such issuances were exempt from the registration
requirements of Section 5 of the Act, what exemption may have been
relied upon, or whether the issuances were subject to the
registration provisions of Section 5.
The Company's stock transfer records indicate that three
shareholders acquired their shares in 1998 from existing
shareholders of the Company in private transactions not part of a
public offering or distribution. These transactions were exempt
from registration under the Act pursuant to the exemption provided
by Section 4(1) of the Act.
Dividend Policy
The Company has not declared or paid cash dividends or made
distributions in the past, and the Company does not anticipate that
it will pay cash dividends or make distributions in the foreseeable
future. The Company currently intends to retain and invest future
earnings to finance its operations.
<PAGE>
Item 6. Management's Discussion and Analysis or Plan of Operation
The following information should be read in conjunction with
the consolidated financial statements and notes thereto appearing
elsewhere in this Form 10-KSB.
The Company is considered a development stage company with no
assets or capital and with no significant operations or income
since its inception in 1987. The costs and expenses associated
with the preparation and filing of its registration statement 1999
have been paid for by a shareholder of the Company. It is
anticipated that the Company will require only nominal capital to
maintain the corporate viability of the Company and necessary funds
will most likely be provided by the Company's officers and
directors in the immediate future. However, unless the Company is
able to facilitate an acquisition of or merger with an operating
business or is able to obtain significant outside financing, there
is substantial doubt about its ability to continue as a going
concern.
In the opinion of management, inflation has not and will not
have a material effect on the operations of the Company until such
time as the Company successfully completes an acquisition
or merger. At that time, management will evaluate the possible
effects of inflation on the Company related to it business and
operations following a successful acquisition or merger.
Plan of Operation
During the next 12 months, the Company will actively seek out
and investigate possible business opportunities with the intent to
acquire or merge with one or more business ventures. In its search
for business opportunities, management will follow the procedures
outlined in Item 1 above. Because the Company lacks funds, it may
be necessary for the officers and directors to either advance funds
to the Company or to accrue expenses until such time as a
successful business consolidation can be made. Management intends
to hold expenses to a minimum and to obtain services on a
contingency basis when possible. Further, the Company's directors
will defer any compensation until such time as an acquisition or
merger can be accomplished and will strive to have the business
opportunity provide their remuneration. However, if the Company
engages outside advisors or consultants in its search for business
opportunities, it may be necessary for the Company to attempt to
raise additional funds. As of the date hereof, the Company has not
made any arrangements or definitive agreements to use outside
advisors or consultants or to raise any capital. In the event the
Company does need to raise capital, most likely the only method
available to the Company would be the private sale of its
securities. Because of the nature of the Company as a development
stage company, it is unlikely that it could make a public sale of
securities or be able to borrow any significant sum from either a
commercial or private lender. There can be no assurance that the
Company will be able to obtain additional funding when and if
needed, or that such funding, if available, can be obtained on
terms acceptable to the Company.
<PAGE>
The Company does not intend to use any employees, with the
possible exception of part-time clerical assistance on an as-needed
basis. Outside advisors or consultants will be used only if they
can be obtained for minimal cost or on a deferred payment basis.
Management is confident that it will be able to operate in this
manner and to continue its search for business opportunities during
the next twelve months.
Net Operating Loss
The Company has accumulated approximately $5,520 of net
operating loss carryforwards as of September 30, 2000, which may be
offset against taxable income and income taxes in future years.
The use of these losses to reduce future income taxes will depend
on the generation of sufficient taxable income prior to the
expiration of the net operating loss carryforwards. The
carry-forwards expire in the year 2020. In the event of certain
changes in control of the Company, there will be an annual
limitation on the amount of net operating loss carryforwards which
can be used. No tax benefit has been reported in the financial
statements for the year ended September 30, 2000 because there is
a 50% or greater chance that the carryforward will not be used.
Accordingly, the potential tax benefit of the loss carryforward is
offset by a valuation allowance of the same amount.
Risk Factors and Cautionary Statements
Forward-looking statements in this report are made pursuant to
the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. The Company wishes to advise readers that
actual results may differ substantially from such forward-looking
statements. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially
from those expressed in or implied by the statements, including,
but not limited to, the following: the ability of the Company to
search for appropriate business opportunities and subsequently
acquire or merge with such entity, to meet its cash and working
capital needs, the ability of the Company to maintain its existence
as a viable entity, and other risks detailed in the Company's
periodic report filings with the Securities and Exchange
Commission.
Recent Accounting Pronouncements
In June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities" which requires
companies to record derivatives as assets or liabilities, measured
at fair market value. Gains or losses resulting from changes in
the values of those derivatives would be accounted for depending on
the use of the derivative and whether it qualifies for hedge
accounting. The key criterion for hedge accounting is that the
hedging relationship must be highly effective in achieving
offsetting changes in fair value or cash flows. SFAS No. 133 is
effective for all fiscal quarters of fiscal years beginning after
June 15, 1999. Management believes the adoption of this statement
will have no material impact on the Company's financial statements.
<PAGE>
Item 7. Financial Statements
The Company's financial statements as of and for the fiscal
years ended September 30, 2000 and 1999 have all been examined to
the extent indicated in his report by Jack F. Burke Jr., independent
certified accountant, and have been prepared in accordance with
generally accepted accounted principles and pursuant to
Regulation S-B as promulgated by the Securities and Exchange Commission.
The aforementioned financial statements are included herein in response
to Item 7 of this Form 10-KSB.
Jack F. Burke, Jr.
Certified Public Accountant
P. O. Box 15728
Hattiesburg, Ms 39404
Report of Independent Auditor
The Board of Directors
Eagles Nest Mining Company
Salt Lake City, Utah
I have audited the accompanying balance sheet of Eagles Nest Mining Co. (A
Development Stage Company) as of December 31, 2000 and 1999 and the related
statements of operations, stockholders' equity and cash flows for the year
then ended. These financial statements are the responsibility of Eagles Nest
Mining Co. management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I 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 statement
presentation. I believe that my audit provides a reasonable basis for my
opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Eagles Nest Mining Co. ( A
Development Stage Company) as of December 31, 2000 and 1999 and the results
of its operations and its cash flows for the year then ended in conformity
with generally accepted accounting principles.
The accompanying financial statements, have been prepared assuming the
company will continue as a going concern. As discussed in Note 3 to the
financial statements, the company is a development stage company with no
significant operating results to date. Unless the company is able to obtain
significant outside financing, there is a substantial doubt about its ability
to continue as a going concern. Management's plans in regard to the matters
are also described in Note 3. The financial statements do not include any
adjustments that might result from the outcome of the uncertainty.
Sincerely,
Jack F. Burke, Jr.
January 10, 2001
<PAGE>
Eagles Net Mining Company
A Development Stage Company
Balance Sheet
September 30, 2000, 1999, 1998
<TABLE>
September 30
<S> <C> <C> <C>
Assets 2000 1999 1998
Current Assets
Cash and Cash Equivalents $ 0 $ 0 $ 194
------- ------- --------
Total Current Assets 0 0 194
------- ------- --------
Total Assets 0 0 194
======= ======= ========
Liabilities and Stockholders' Equity
Current Liabilities
Due to Stockholder 3,200 0 0
------- ------- -------
Total Current Liabilities 3,200 0 0
------- ------- -------
Total Liabilities 3,200 0 0
------- ------- -------
Stockholders' Equity
Common Stock - 10,000,000 Shares
No Par Authorized
1,392,000 Shares Issued and
Outstanding 8,970 8,970 (8,970)
(Deficit) Accumulation During
Development Stage (12,170) (8,970) (8,776)
-------- ------- -------
Total Stockholder's Equity (3,200) 0 194
-------- ------- -------
Total Liabilities and
Stockholders' Equity $ 0 $ 0 $ 194
======== ======== =========
</TABLE>
The Accompanying "Notes to Financial Statements"
Are An Integral Part of These Financial Statements
<PAGE>
Eagles Nest Mining Company
A Development Stage Company
Statement of Operations
Year Ended September 30, 2000, and 1999
<TABLE>
From Inception
9-14-1987
Year Ended Year Ended Year Ended To
9-30-2000 12-31-1999 12-31-1998 12-31-2000
<S> <C> <C> <C> <C>
Revenues $ 0 $ 0 $ 0 $ 0
Expenses 3,200 194 0 12,170
--------- --------- --------- ----------
Net Loss (3,200) (194) 0 (12,170)
--------- --------- --------- ----------
Net Income (Loss) per
share common stock $ 0 $ 0 $ 0 $ (0.09)
Weighted average
number of shares
outstanding 1,392,700 1,392,700 1,392,700 1,392,700
</TABLE>
The Accompanying "Notes to Financial Statements"
Are An Integral Part of These Financial Statements
<PAGE>
Eagles Nest Mining Company
A Development Stage Company
Analysis of Stockholders' Equity
<TABLE>
Deficit
Accumulated
Common Stock Since
Shares Amount Sept. 14, 1987
<S> <C> <C> <C>
Common Stock Issued September 14, 1987 302,200 $ 3,220
Net Loss for the Year Ended September 30, 1987 0 0 $ (3,220)
Balance September 20, 1987 302,200 3,220 3,220
Common Stock Issued in 1988 500 50
Net Loss for the Year Ended September 30, 1988 0 0 (50)
Balance September 30, 1988 302,700 3,270 (3,270)
Net Changes for the Year Ended September 30, 1989 0 0 0
Balance September 30, 1989 302,700 3,270 (3,270)
Net Changes for the Year Ended September 30, 1990 0 0 0
Balance September 30, 1990 302,700 3,270 (3,270)
Net Changes for the Year Ended September 30, 1991 0 0 0
Balance September 30, 1991 302,700 3,270 (3,270)
Net Changes for the Year Ended September 30, 1992 0 0 0
Balance September 30, 1992 302,700 3,270 (3,270)
Net Changes for the Year Ended September 30, 1993 0 0 0
Balance September 30, 1993 302,700 3,270 (3,270)
Net Changes for the Year Ended September 30, 1994 0 0 0
Balance September 30, 1994 302,700 3,270 (3,270)
Net Changes for the Year Ended September 30, 1995 0 0 0
Balance September 30, 1995 302,700 3,270 (3,270)
Net Changes for the Year Ended September 30, 1996 0 0 0
Balance September 30, 1996 302,700 3,270 (3,270)
Common Stock Issued August 28, 1997 1,000,000 5,000 0
Net Changes for the Year Ended September 30, 1997 0 0 0
Balance September 30, 1997 1,302,700 8,270 (3,270)
Common Stock Issued November 12, 1997 90,000 450 0
Additional Paid in Capital, February 23, 1998 250
Net (Loss) Through September 1998 0 0 (5,506)
Balance September 30, 1998 1,392,700 8,970 (8,776)
Net (Loss) for Year Ended September 30, 1999 0 0 (194)
Balance September 30, 1999 1,392,700 $ 8,970 $ 8,970
Net (Loss) for Year Ended September 30, 2000 (3,200)
--------------------------------
Balance September 30, 2000 1,392,700 $8,970 ($12,170)
--------------------------------
</TABLE>
The Accompanying "Notes to Financial Statements'
Are An Integral Part of These Financial Statements
<PAGE>
Eagles Nest Mining Company
A Development Stage Company
Statement of Cash Flows
<TABLE> From
Inception
September 14,
For Years Ended 1998
September 30 September 30,
2000 1999 1998 2000
<S> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net (Loss) $ (3,200) $ (194) $ 5,506 $(12,170)
Adjustments to Reconcile Net
Income (Loss) to Net Cash Used
in Operations
Non Cash Expenses 3,200 0 450 6,650
------------------------------------------
Net Cash Provided (Used) by Operations 0 (194) 5,056 (5,520)
------------------------------------------
Cash Flows From Investing Activity 0 0 0 0
------------------------------------------
Cash Flows From Financing Activity
Common Stock Issued for Cash 0 0 0 5,270
Additional Paid in Capital 0 0 250 250
------------------------------------------
Cash Flows From Financing Activities 0 0 250 5,520
------------------------------------------
Net Cash Increase (Decrease) 0 (194) 4,806 0
Cash Balance Beginning 0 194 5,000 0
Cash Balance Ending $ 0 $ 0 $ 194 $ 0
------------------------------------------
</TABLE>
The Accompanying "Notes to Financial Statements"
Are An Integral Part of These Financial Statements
<PAGE>
Eagles Nest Mining Company
A Development Stage Company
Notes to Financial Statements
September 30, 2000
Note 1 - Organization and History
The Company was organized in the State of Idaho on September 14, 1987. The
Company has not begun operations and has been dormant since its organization.
Cash and Cash Equivalents - Cash consist of cash and demand deposits. The
Company defines cash equivalents as highly liquid short term investments with
an original maturity of three months or less. The Company has not had any
cash equivalents.
Accounting Method and Financial Statements - The Company has been dormant
since its inception with its only transactions consisting of stock sales and
administrative services.
Income Tax - The Company does not have a tax asset or liability. The Company
has a net operating loss carryover of $5,520 which has been offset by a
valuation account. Should the Company commence operations the net operating
loss would be usable and would expire as follows:
Year Loss
2002 $220
2003 50
2018 5,056
2019 194
========
Total $5,520
Net (Loss) Per Share - Net Income (Loss) per share is calculated by dividing
net income (Loss) by the weighted average number of shares of common
outstanding during the period.
Development Stage Company - The Company is classified as a development stage
company as it is dormant and planned principle operation have not commenced.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect that amounts reported in the financial
statements and accompanying notes. Actual results could differ from these
estimates.
Note 2 - Common Stock Issued for Services
390,000 shares of unregistered common stock was issued to certain directors
of the corporation as compensation for services rendered. Information
regarding this issue is as follows:
<PAGE>
1. The 300,000 shares were issued on September 17, 1987 and 90,000
shares were issued
on November 12, 1997.
2. The stock was issued for administrative services rendered to the
corporation.
3. The value of the services rendered is as follows:
A. 300,000 shares issued September 17, was $3,000.00.
B. 90,000 shares issued November 12, 1997 was $450.00.
Note 3 - Going Concern
The Company's financial statements have been presented on the basis that it
is a going concern which contemplated the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company is
in the development stage and has not earned any revenues from operations. The
Company's ability to continue as a going concern is dependent upon its
ability to develop additional sources of capital or locate a merge candidate
and ultimately, achieve profitable operation. The accompanying financial
statements do not include any adjustments that might result from the outcome
of these uncertainties. Management is seeking new capital to revitalize the
Company.
Note 4 - Supplemental Cash Flow Disclosure
2000 1999 1998
Interest Paid 0 0 0
Income Tax Paid 0 0 0
ITEM 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
Not applicable.
PART III
ITEM 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange
Act
The executive officers and directors of the Company are as
follows:
Name Age Position
J. Rockwell Smith 63 President, Chief Executive
Officer and Director
Jim Ruzicka 57 Secretary / Treasurer and
Director
______________________
All directors hold office until the next annual meeting of
stockholders and until their successors have been duly elected and
qualified. There are no agreements with respect to the election of
<PAGE>
directors. The Company has not compensated its directors for
service on the Board of Directors or any committee thereof, but
directors are entitled to be reimbursed for expenses incurred for
attendance at meetings of the Board of Directors and any committee
of the Board of Directors. However, due to the Company's lack of
funds, the directors will defer their expenses and any compensation
until such time as the Company can consummate a successful
acquisition or merger. As of the date hereof, no director has
accrued any expenses or compensation. Officers are appointed
annually by the Board of Directors and each executive officer
serves at the discretion of the Board of Directors. The Company
does not have any standing committees.
Presently, none of the Company's directors are directors of
any other "shell" or "blank check" companies or other corporations
that are actively pursuing acquisitions or mergers, except that
Mr. Ruzicka is the President and a director of Siegle Ventures,
Inc. presently an inactive corporation, and he is the President and
a director of Consolidated Travel Systems, Inc., also inactive.
The following is a summary of the past involvement by management if
other shells or blank check companies.
Mr. Smith has been an executive officer, director and/or
principal shareholder of the following companies: The Auxer Gold
Mines (President and director until April 1995), now know as Auxer
Industries, Inc; Grant Silver, Inc. (principal shareholder until
September 1997), now known as BrewServ Corporation; Green MT. P.S.
(Principal shareholder until January 1998), now known as Generex
Biotechnology Corporation; Index Daley Mines (principal shareholder
until June 1998), now known as International Digital Technologies;
Kaniksu Ventures, Inc. (Secretary and director until March 1996),
now known as Ocean Power Corporation; Nava Leisure, U.S.A., Inc.
(President and director until January 1999), now known as Senesco
Technologies, Inc.; Park Avenue, Inc. (President and director until
March 1994), now known as Electrical Generation Technology, Inc.;
Regal Gold & Silver (President and director until August 1996), now
known as American Image Motor Company, Inc.; Rock City Ventures,
Inc. (President and director until January 1995); THO2 & Rare
Metals Exp. (President and director until December 1994), now known
as Golf Technologies Holding, Inc.; Whitestone Financial, Inc.
(principal shareholder), now known as Happy Food Corp.
Mr. Ruzicka has been an executive officer, director and/or
principal shareholder of the following companies: Consolidated
Travel Systems, Inc. (currently President and director); Grant
Silver, Inc. (principal shareholder until September 1997); Green
MT. P.S., Inc. (principal shareholder until January 1998), now
known as Generex Biotechnology Corporation; Nava Leisure, U.S.A.,
Inc. (principal shareholder until January 1999), now known as
Senesco Technologies, Inc.; Park Avenue, Inc. (Vice President and
director until March 1994), now known as Electrical Generation
Technology, Inc.; Roan American Corporation (Secretary and director
until February 1996), now known as Crystal Broadcasting, Inc.; Rock
City Ventures, Inc. (Vice President and director until January
1995); Siegle Ventures, Inc. (currently President and director);
Whitestone Financial, Inc. (principal shareholder), now known as
<PAGE>
Happy Food Corp.;
Current management of the Company has no present intent, nor
is it likely that they will become involved with promoting other
shell or blank check companies in the immediate future, except for
those set forth herein.
No director, officer, affiliate or promoter of the Company
has, within the past five years, filed any bankruptcy petition,
been convicted in or been the subject of any pending criminal
proceedings, or is any such person the subject or any order,
judgment, or decree involving the violation of any state or federal
securities laws.
All of the Company's present directors have other full-time
employment and will routinely devote only such time to the Company
necessary to maintain its viability. It is estimated that each
director will devote less than ten hours per month to the Company's
activities. The directors will, when the situation requires,
review potential business opportunities or actively participate in
negotiations for a potential merger or acquisition on an as-needed-
basis.
Currently, there is no arrangement, agreement or understanding
between the Company's management and non-management shareholders
under which non-management shareholders may directly or indirectly
participate in or influence the management of the Company's
affairs. Present management openly accepts and appreciates any
input or suggestions from the Company's shareholders. However, the
Board of Directors is elected by the shareholders and the
shareholders have the ultimate say in who represents them on the
Board of Directors. There are no agreements or understandings for
any officer or director of the Company to resign at the request of
another person and none of the current offers or directors of the
Company are acting on behalf of, or will act at the direction of
any other person.
In connection with the preparation and filing of its
registration statement in 1999, one of the Company's shareholders,
J. Rockwell Smith, has paid for certain legal and professional fees
related to the registration statement. Although, as of the date
hereof there is no agreement or arrangement for Mr. Smith to
provide additional funds, the Company is not precluded from
approaching Mr. Smith or any other shareholder and requesting
additional financial assistance. Because such additional funding
is only speculative at this time, the Company has not developed any
criteria or plans related to this funding.
The business experience of each of the persons listed above
during the past five years is as follows:
J. Rockwell Smith, age 63, has been President and a director
of the Company since October 1997. From 1977 to 1989, Mr. Smith
owned and operated his own construction company in Park City, Utah,
Rocky Smith Construction, which supervised construction projects in
<PAGE>
the resort community. From 1990 to the present, Mr. Smith has been
employed as a driver by the Park City Transportation Company. Mr.
Smith studied engineering at Seattle University and the University
of Washington.
Jim Ruzicka, age 57, has been Vice President and a director of
the Company since October 1997. Mr. Ruzicka has owned and operated
from 1980 to the present, Budget Lodging, a property management
company located in Park City, Utah. From 1963 to 1980, Mr. Ruzicka
owned and operated a chain of seven restaurants in Chicago,
Illinois. Also, since 1978, he has sold real estate and owned and
managed several commercial buildings and apartments. Mr. Ruzicka
attended Auroa College in Auroa, Illinois.
Section 16(a) Beneficial Ownership Reporting Compliance
Each of the Company's officers and directors is required to
file a Form 5, Annual Statement of Changes in Beneficial Ownership,
on or before the 45th day after the end of the fiscal year. These
reports have not filed on a timely basis and will be submitted to
the Securities and Exchange Commission.
Item 10. Executive Compensation
The Company has not had a bonus, profit sharing, or deferred
compensation plan for the benefit of its employees, officers or
directors. The Company has not paid any salaries or other
compensation to its officers, directors or employees for the years
ended September 30, 2000 and 1999. Further, the Company has not entered
into an employment agreement with any of its officers, directors or any
other persons and no such agreements are anticipated in the
immediate future. It is intended that the Company's directors will
defer any compensation until such time as an acquisition or merger
can be accomplished and will strive to have the business
opportunity provide their remuneration. As of the date hereof, no
person has accrued any compensation.
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information, to the best of the
Company's knowledge, as of December 31, 2000, with respect to each
person known by the Company to own beneficially more than 5% of the
outstanding Common Stock, each director and all directors and
officers as a group.
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class(1)
J. Rockwell Smith* 1,000,000 71.8%
P.O. Box 3033
Park City, UT 84060
Jim Ruzicka* 50,000 3.6%
P.O. Box 3813
Park City, UT 84060
<PAGE>
James Kerr 100,000 7.2%
4027 South 1300 East
Salt Lake City, UT 84124
Matthew Ott 100,000 7.2%
56 West 400 South
Salt Lake City, UT 84101
All directors and officers 1,050,000 75.4%
a group (2 persons)
* Director and/or executive officer
Note: Unless otherwise indicated in the footnotes below, the
Company has been advised that each person above has sole
voting power over the shares indicated above.
(1) Based upon 1,392,700 shares of common stock outstanding
on October 18, 2000.
Item 12. Certain Relationships and Related Transactions
During the past two fiscal years, there have been no
transactions between the Company and any officer, director, nominee
for election as director, or any shareholder owning greater than
five percent (5%) of the Company's outstanding shares, nor any
member of the above referenced individuals' immediate family
The Company's officers and directors are subject to the
doctrine of corporate opportunities only insofar as it applies to
business opportunities in which the Company has indicated an
interest, either through its proposed business plan or by way of an
express statement of interest contained in the Company's minutes.
If directors are presented with business opportunities that may
conflict with business interests identified by the Company, such
opportunities must be promptly disclosed to the Board of Directors
and made available to the Company. In the event the Board shall
reject an opportunity so presented and only in that event, any of
the Company's officers and directors may avail themselves of such
an opportunity. Every effort will be made to resolve any conflicts
that may arise in favor of the Company. There can be no assurance,
however, that these efforts will be successful.
<PAGE>
PART V
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits
*2(i) Articles of Incorporation filed as Exhibit to Form 10-SB.
*2(ii) By-Laws filed as Exhibit to Form 10-SB.
*4 Specimen Stock Certificate filed as Exhibit to Form 10-SB.
27 Financial Data Schedule
- - - - -
* Exhibits so marked have heretofore been filed with the
Securities and Exchange Commission as part of the filing
indicated and are incorporated herein by reference.
(b) Reports on Form 8-K
None
_
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act,
the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Eagles Nest Mining Company
BY: /S/ J. Rockwell Smith
J. Rockwell Smith
President and Director
Dated: January 12, 2001
In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.
Signature Title Date
President and January 12, 2001
/S/ J. Rockwell Smith Director (C.F.O.)
J. Rockwell Smith
Secretary/Treasurer December 28, 2000
/S/ Jim Ruzicka and Director
Jim Ruzicka (Principal Accounting Officer)
<PAGE>
