SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2003
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OF 15(D) OF THE EXCHANGE ACT OF 1934
From the transition period from ___________ to ____________.
Commission File Number 0-27323
-------
AMERICAN EAGLE MANUFACTURING CO.
--------------------------------
(Exact name of registrant as specified in its charter)
Nevada 88-0429812
-----------------
(State or other jurisdiction of incorporation or organization)(IRS Employer
Identification No.)
300 Park Avenue, Suite 1700, New York, New York 10022
-----------------------------------------------------
(Address of principal executive offices)
(212) 572-6276
--------------
(Issuer's telephone number)
Harbour Front Holdings, Inc.
----------------------------
(Former name, if changed since last report)
Indicate by check mark whether the registrant (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
As of November 14, 2003, 982,669 shares of Common Stock of the issuer were
outstanding.
AMERICAN EAGLE MANUFACTURING CO.
(FORMERLY HARBOUR FRONT HOLDINGS, INC.)
(FORMERLY THE BAUER PARTNERSHIP, INC.)
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2003
ASSETS
Assets $-
============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 207,428
Accrued expenses 123,101
Notes payable - related parties 216,500
------------
Total current liabilities 547,029
------------
Commitments and contingencies
STOCKHOLDERS' DEFICIT:
Preferred stock, $.001 par value, 25,000,000 shares
authorized, no shares issued and outstanding -
Common stock, $.001 par value, 200,000,000 shares
authorized, 982,669 shares issued and outstanding 983
Additional paid in capital 7,770,328
Accumulated deficit (8,318,340)
------------
Total Stockholders' Deficit (547,029)
------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ -
============
AMERICAN EAGLE MANUFACTURING CO.
(FORMERLY HARBOUR FRONT HOLDINGS, INC.)
(FORMERLY THE BAUER PARTNERSHIP, INC.)
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------------- ----------------------
2003 2002 2003 2002
-------------------- ---------- ---------- ----------
As restated
Revenues $ - $ - $ - $ -
Cost and Expenses:
Salaries and benefits - 48,500 39,600 169,500
Other general and
Administrative (4,521) 170,539 671,162 283,789
-------------------- ---------- ---------- ----------
(4,521) 161,250 710,762 453,289
-------------------- ---------- ---------- ----------
Income (loss) from
operations 4,521 (161,250) (710,762) (453,289)
Interest expense (4,981) (43,778) (14,889) (111,784)
-------------------- ---------- ---------- ----------
Net loss $ (460) $(205,028) $(725,651) $(565,073)
==================== ========== ========== ==========
Net loss per share:
Net loss basic and diluted $ (0.00) $ (0.97) $ (1.15) $ (2.62)
==================== ========== ========== ==========
Weighted average shares outstanding:
Basic and diluted 717,669 211,414 630,735 215,979
==================== ========== ========== ==========
AMERICAN EAGLE MANUFACTURING CO.
(FORMERLY HARBOUR FRONT HOLDINGS, INC.)
(FORMERLY THE BAUER PARTNERSHIP, INC.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended
September 30,
---------------------------
2003 2002
------------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES As restated
Net loss $ (725,651) $ (565,073)
Adjustments to reconcile net deficit to cash used by
operating activities:
Expenses paid by shareholder 39,685 -
Common stock for services 441,083 -
Net change in:
Accounts receivable - 5,845
Investments - 33,806
Accounts payable and accrued expenses 44,883 (582,866)
------------- ------------
CASH FLOWS USED IN OPERATING ACTIVITIES (200,000) (1,108,288)
------------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of common stock 200,000 417,500
Proceeds from notes payable - 686,906
------------- ------------
CASH FLOWS PROVIDED BY FINANCING
ACTIVITIES - 1,104,406
------------- ------------
NET DECREASE IN CASH - (3,882)
Cash, beginning of period - 3,882
------------- ------------
Cash, end of period $ - $ -
============= ============
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid $ - $ -
Income taxes paid $ - $ -
NONCASH TRANSACTIONS:
Common stock issued for debt $ 502,500 $ 522,500
Debt forgiven by shareholder recorded as contributed
capital $ 350,052 $ -
AMERICAN EAGLE MANUFACTURING CO.
(FORMERLY HARBOUR FRONT HOLDINGS, INC.)
(FORMERLY THE BAUER PARTNERSHIP, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1: PRESENTATION
The consolidated balance sheet of the Company as of September 30, 2003, the
related consolidated statements of operations for the three and nine months
ended September 30, 2003 and 2002 and the statements of cash flows for the nine
months ended September 30, 2003 and 2002 included in the condensed financial
statements have been prepared by the Company without audit. In the opinion of
management, the accompanying condensed financial statements include all
adjustments (consisting of normal, recurring adjustments) necessary to summarize
fairly the Company's financial position and results of operations. The results
of operations for the nine months ended September 30, 2002 are not necessarily
indicative of the results of operations for the full year or any other interim
period. The information included in this Form 10-QSB should be read in
conjunction with Management's Discussion and Analysis and Financial Statements
and notes thereto included in the American Eagle Manufacturing Co. ("American")
December 31, 2002 Form 10-KSB.
NOTE 2 - RESTATEMENT
In December 2002, management determined it had erroneously recorded a gain on
the sale of its subsidiary. The gain was reversed and the net loss for the nine
months ended September 30, 2002 was restated to $565,073 from $405,149.
NOTE 3 - COMMON STOCK
In September 2003, Ocean Strategic Holdings, Ltd. and Turbo International, Inc.
entered into an agreement with the Company whereby they agreed to treat the
shares of common stock that they were holding in escrow pursuant to a
Convertible Debenture as outstanding shares pending certain conditions being
met. Ocean Strategic Holdings and Turbo International agreed that as long as
they received an aggregate of $60,000 pursuant to a contemplated stock purchase
agreement, they would not pursue money from the Company pursuant to the
Convertible Debenture. In the event Ocean Strategic Holdings and Turbo
International do not receive $60,000 in connection with a stock purchase
agreement, it is agreed that the conditions of the Convertible Debenture revert
back to the terms and conditions prior to the shares being treated as issued and
outstanding.
In August 2003, the Board of Directors announced a reverse split of 1 for 200
shares of American's common stock. All share and per share amounts have been
restated to reflect the retroactive effect of the stock split.
In March 2003, American converted $442,500 of notes payable to a director and
$57,500 of advances to a director or $500,000 into 137,500 shares of common
stock.
In 2003 to date, American issued 167,285 shares of common stock under various
agreements for consulting services.
In February 2003, American sold 50,000 shares of common stock for $200,000.
In March 2003, American issued 16,500 shares of its common stock to Ronald J.
Bauer, its former chief executive office for services performed.
During 2003, a shareholder converted advances of $350,052 into a note payable
bearing interest at 8% due in March 2004. In March 2003, the shareholder has
forgiven the note payable which has been recorded as a contribution to capital.
During 2003, all directors have resigned except for Ron Bauer. American has
closed all of its bank accounts and is currently being funded by Mr. Ron Bauer.
NOTE 4 - JUDGMENT
On March 5, 2003, a default judgment was entered against The Bauer Partnership,
Inc. in a Lawsuit styled as Wilkerson Consulting, Inc. vs. The Bauer
Partnership, Inc. in the District Court of Dallas County, Texas in the 192nd
Judicial District. In plaintiff's original petition, Wilkerson Consulting
alleged that it had assigned contracts to The Bauer Partnership, Inc. in
November 2001 relating to the purchase of properties in France and was entitled
to $31,000 and 571,429 shares of The Bauer Partnership, Inc. Wilkerson
Consulting received a default judgment in the amount of $1,745,287 plus
$5,000,000 in punitive damages. The Company only recently became aware of the
default judgment and the original petition that had been filed and is currently
consulting with counsel regarding the steps it will take. The Company does not
believe it was properly served and is contemplating filing a counter-claim
against Wilkerson Consulting and believes that the lawsuit was filed
fraudulently. The Company has engaged counsel in efforts to reverse this
judgment and has filed a notice of appeal.
NOTE 5 - LETTER OF INTENT
During August 2003, the Company entered into a letter of intent to enter into a
reverse merger transaction. As of November 14, 2003, the transaction had not
closed.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
THIS REPORT CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF SECTION
27A OF THE SECURITIES ACT OF 1933, AS AMENDED AND SECTION 21E OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED. THE COMPANY'S ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE SET FORTH ON THE FORWARD LOOKING STATEMENTS AS A RESULT OF
THE RISKS SET FORTH IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION, GENERAL ECONOMIC CONDITIONS, AND CHANGES IN THE ASSUMPTIONS USED IN
MAKING SUCH FORWARD LOOKING STATEMENTS.
Overview
The Company's business strategy was to utilize its common stock to acquire
existing hotel and commercial real estate assets. The Company did not implement
this business strategy until December 31, 2001. The Company has been
unsuccessful in implementing this strategy. Prior thereto, the Company was
engaged in providing investment banking services to United States publicly
traded companies seeking financing in the range of $5 million to $20 million.
Until the first quarter of 2003, the Company sought development and acquisition
opportunities in promising industries where it would utilize its securities to
acquire emerging businesses and/or companies with growth potential.
The Company is currently in discussions with several merger/acquisition
candidates.
Revenues
The Company had no revenues for the three and nine months ended September 30,
2003 and had no revenues for the three and nine months ended September 30, 2002.
Costs and Expenses
For the nine months ended September 30, 2003, the Company had costs and expenses
of $710,762 consisting of salaries and benefits of $39,600 and other general and
administrative expenses of $671,162 which included payment of professional fees,
rent, travel and entertainment. Costs and expenses were $453,289 for the nine
months ended September 30, 2002 consisting of salaries and benefits of $169,500
and other general and administrative expenses of $283,789.
For the three months ended September 30, 2003, the Company had costs and
expenses of $(4,521) consisting of forgiveness of certain accounts payable.
Costs and expenses were $161,250 for the three months ended September 30, 2002
consisting of salaries and benefits of $48,500 and other general and
administrative expenses of $170,539.
Loss from Operations
The Company had a loss from operations of $710,762, an increase of $257,473 or
57% compared to a loss from operations of $453,289 for the nine months ended
September 30, 2002. The increase in loss from operations is due to the increase
in other general and administrative expenses offset by a decrease in salaries.
American is settling its obligations in order to attract a merger or acquisition
candidate.
During the three months ended September 30, 2003, the Company had income from
operations of $4,521 compared to a loss from operation of $161,250 during the
three months ended September 30, 2002. The income from operations was due to
the forgiveness of certain accounts payable.
Interest Expense
Interest expense decreased from $111,784 for the nine months ended September 30,
2002 to $14,889 for the nine months ended September 30, 2003. The decrease in
interest expenses was due to the debt conversion and the payment of outstanding
debts.
Interest expense decreased from $43,778 for the three months ended September 30,
2002 to $4,981 for the three months ended September 30, 2003.
Net Loss
Net loss increased $160,578, or 28% from $565,073 for the nine months ended
September 30, 2002 to $725,651 for the nine months ended September 30, 2003.
The increase in net loss is due to the increase in other general and
administrative expenses offset by a decrease in salaries and a decrease in
interest expense.
Net loss was $460 for the three months ended September 30, 2003 compared to
$205,028 for the three months ended September 30, 2002. The decrease in net
loss is due to the forgiveness of certain accounts payable and the elimination,
during the three months ended September 30, 2003, of general and administrative
expenses and interest expense.
Net Loss Per Share
The Company had a net loss of $1.15 per share for the nine months ended
September 30, 2003 and $2.62 for the nine months ended September 30, 2002.
The Company had a net loss of $0.00 per share for the three months ended
September 30, 2003 and $0.97 for the three months ended September 30, 2002.
Liquidity and Capital Resources
For the nine months ended September 30, 2003, the Company did not generate cash
flow from its operations. As a result, the Company requires additional working
capital to develop its business until the Company either achieves a level of
revenues adequate to generate sufficient cash flows from operations or obtains
additional financing necessary to support its working capital requirements.
As of September 30, 2003, the Company had accounts payable of $207,428, accrued
expenses of $123,101, and notes payable to related parties of $216,500.
As of September 30, 2003, the Company had no cash and a working capital deficit
of $547,029.
The Company is taking steps to raise equity capital or to borrow additional
funds. There can be no assurance that any new capital will be available to the
Company or that adequate funds will be sufficient for Company operations,
whether from the Company's financial markets, or other arrangements will be
available when needed or on terms satisfactory to the Company. The Company has
no further commitments from officers, directors or affiliates to provide
funding. The failure of the Company to obtain adequate additional financing may
require the Company to delay, curtail or scale back some or all of its
operations. Any additional financing may involve dilution to the Company's
then-existing shareholders. The Company's bank accounts have been closed and
all Company expenses that have been paid have been paid by Ronald J. Bauer, the
Company's Chief Executive Officer.
The Company is currently seeking a merger, acquisition or stock sale. There is
no assurance that a merger, acquisition or stock sale will take place. In the
event that an agreement is reached, this will likely have a significant impact
on shareholders and they are likely to have their ownership significantly
diluted.
ITEM 3. EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures. Based on the
evaluation by Mr. Ronald J. Bauer, both the chief executive officer and chief
accounting officer of the Company, of the effectiveness of the Company's
"disclosure controls and procedures" (as defined in the Securities Exchange Act
of 1934 Rules 13a-15(e) and 15d-15(e)) conducted as of September 30, 2003 the
filing date of this quarterly report (the "Evaluation Date"), Mr. Bauer
concluded that, as of the Evaluation Date, our disclosure controls and
procedures were adequate to ensure that material information relating to us and
our subsidiaries would be made known to him by others within those entities.
(b) Changes in internal control over financial reporting. There were
no significant changes in our internal control over financial reporting during
our most recent fiscal quarter that materially affected, or is reasonably likely
to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1: Legal Proceedings
In February 2003, a lawsuit for breach of contract for attorneys fees was filed
styled as Richard O. Weed vs. The Bauer Partnership, Inc., The Bauer
Partnership, Ltd., Ronald J. Bauer, and DOES 1 through 25 in the Superior Court
of the State of California in Orange County, Case No. 03CC03810. Mr. Weed is
seeking damages of $41,239.06, plus interest and attorneys fees. The Company
does not believe it owes Mr. Weed for services performed in the amount of
$41,239.06. The Company settled this claim in the third quarter for $12,000.
In February 2003, a lawsuit for damages based on fraud and securities violations
was filed styled as Richard O. Weed vs. AMERICAN EAGLE MANUFACTURING, CO., The
Bauer Partnership, Inc., The Bauer Partnership, Ltd., Ronald J. Bauer, David M.
Loev, F. Bryson Farrill, Jacques Fischer, Joseph T. Bauer, Ed Tobin, Geoffrey
Button, Kevin Wallace, Pacific Stock Transfer Company, Malone & Bailey, PLLC and
DOES 1 through 25 in the Superior Court of the State of California in Orange
County, Case No. 0300003887. Mr. Weed is the owner of 150,000 shares of the
Company's common stock and he alleges that the market value of his shares has
dropped dramatically. Mr. Weed alleges a violation of Section 16(b) of the
Securities Exchange Act of 1934 seeking short-swing profits from Ronald J.
Bauer. Mr. Weed also seeks damages for a hot check in the amount of $4,310. Mr.
Weed is seeking $1,123,500 for his first cause of action, return of short swing
profits for his second cause of action, and $4,310 on his third cause of action.
Mr. Weed is also seeking prejudgment interest, costs and reasonable attorney's
fees. The Company has retained counsel and is vigorously defending these causes
of action. Mr. Weed received the 150,000 shares of stock in consideration for
services performed and the Company believes that it will settle this claim for a
substantially reduced amount. The Company settled this claim in the third
quarter as stated above.
On March 5, 2003, a default judgment was entered against The Bauer Partnership,
Inc. in a Lawsuit styled as Wilkerson Consulting, Inc. vs. The Bauer
Partnership, Inc. in the District Court of Dallas County, Texas in the 192nd
Judicial District. In plaintiff's original petition, Wilkerson Consulting
alleged that it had assigned contracts to The Bauer Partnership, Inc. in
November 2001 relating to the purchase of properties in France and was entitled
to $31,000 and 571,429 shares of The Bauer Partnership, Inc. Wilkerson
Consulting received a default judgment in the amount of $1,745,287 plus
$5,000,000 in punitive damages. The Company only recently became aware of the
default judgment and the original petition that had been filed and is currently
consulting with counsel regarding the steps it will take. The Company does not
believe it was properly served and is contemplating filing a counter- claim
against Wilkerson Consulting. The Company has engaged counsel in efforts to
reverse this judgment and has filed notice of an appeal.
We are not involved in any other material pending legal proceedings, other than
routine litigation incidental to our business, to which we are a party or of
which any of our property is subject.
Item 2. Changes in Securities and Use of Proceeds
None
Item 4. Submission of Matters to a Vote of Security Holders
(a) and (c) On September 25, 2003, the majority stockholders of the Company
consented to the filing of articles of amendment to the articles of
incorporation to change the name of the Company to American Eagle Manufacturing
Co., affect a 1:200 reverse stock split, reauthorize 200,000,000 shares of
common stock with par value of $.001 per share, and reauthorize 25,000,000
shares of preferred stock with a par value of $.001 per share.
Item 5. Other Information
The Company changed its name from Harbour Front Holdings, Inc. to American Eagle
Manufacturing Co. in anticipation of acquiring American Eagle Corp. and now
trades under the stock symbol AEMC. The Company also affected a 1:200 reverse
stock split and reauthorized the amount of shares and par value of its common
stock and preferred stock. These events were reported via a Form 8-K, listed
below.
In September 2003, Ocean Strategic Holdings, Ltd. and Turbo International, Inc.
entered into an agreement with the Company whereby they agreed to treat the
shares of common stock that they were holding in escrow pursuant to a
Convertible Debenture as outstanding shares pending certain conditions being
met. Ocean Strategic Holdings and Turbo International agreed that as long as
they received an aggregate of $60,000 pursuant to a contemplated stock purchase
agreement, they would not pursue money from the Company pursuant to the
Convertible Debenture. In the event Ocean Strategic Holdings and Turbo
International do not receive $60,000 in connection with a stock purchase
agreement, it is agreed that the conditions of the Convertible Debenture revert
back to the terms and conditions prior to the shares being treated as issued and
outstanding.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
Exhibit No. Description
31 Certificate of the Chief Executive
Officer and Chief Financial Officer
pursuant Section 302 of the Sarbanes-
Oxley Act of 2002
32 Certificate of the Chief Executive
Officer and Chief Financial Officer
pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002
b) Reports on Form 8-K
The Company filed a report on Form 8-K on August 12, 2003, to report a name
change, a 1:200 reverse stock split and the reauthorization of shares and par
value.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
AMERICAN EAGLE MANUFACTURING CO.
Date: November 14, 2003
By: /s/ Ronald J. Bauer
----------------------
Ronald J. Bauer
CEO