SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K\A
Amendment No. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: (DATE OF EARLIEST EVENT REPORTED): December 4, 2003
COMMISSION FILE NO. 000-27323
AMERICAN EAGLE MANUFACTURING CO.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 88-0429812
--------------------------------- -------------------
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
2052 CORTE DEL NOGAL, SUITE A, CARLSBAD, CA. 92009
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(760) 804-1789
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(ISSUER TELEPHONE NUMBER)
Harbour Front Holdings, Inc.
300 Park Avenue, Suite 1700
New York, NY 10022
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FORMER NAME AND ADDRESS
ITEM 1. CHANGES IN CONTROL OF THE REGISTRANT.
As a result of the acquisition of American Eagle Corp., a Nevada corporation
("Eagle Corp."), the control of the Registrant shifted to the former
shareholders of Eagle Corp. The following persons will exercise control of the
Registrant.
Name No. of shares Percentage(1)
---- ------------- ------------
Don Logan 20,000,000 (2) 74.0%
Tiger Industries, Inc. (3) 3,500,000 12.0%
(1) 100% of shares of Eagle Corp. have been acquired and 16,307,699 shares
are issued to such shareholders.
(2) Don Logan and Barrie Logan hold these shares as joint tenants with rights
of survivorship. They are husband and wife and are both officers and
directors of the Company.
(3) Robert L. Cashman is the beneficial owner of these shares.
All of the present officers and directors have resigned.
The new officers and Directors are the following: Don R. Logan,
President, and Director and Barrie Logan, Vice-President, Secretary,
and Director.
ITEM 2. ACQUISITION OF DISPOSITION OF ASSETS.
On December 4, 2003, the Registrant acquired 89.3% of the issued and
outstanding shares of Eagle Corp. in exchange for 23,500,000 shares of the
Registrant's common stock. Upon 100% shareholder approval of Eagle Corp.
which is anticipated, there will be 27,290,399 shares of the Registrant's
common stock outstanding.
100% of the shareholders of Eagle Corp. have approved the exchange. There are
now 27,290,399 shares of the registrant's common stock outstanding.
On September 30, 2003 substantially all of the holders of the notes due from
American Eagle Corp elected to convert their notes to common stock of American
Eagle Manufacturing Co, Therefore Notes Payable with a value of $1,045,233.34 on
September 30, 2003 were converted to 1,045,234 shares of American Eagle
Manufacturing Co restricted common stock.
DESCRIPTION OF THE BUSINESS
The registrant American Eagle Manufacturing Co. (American Eagle or the Company)
was originally incorporated as Finders Keepers, Inc., a Nevada Corporation on
May 28, 1999. Finders Keepers, Inc. changed its name to The Bauer Partnership,
Inc. on December 5, 2000. The Bauer Partnership, Inc. changed its name to
Harbour Front Holdings, Inc. on January 27, 2003. Harbour Front Holdings, Inc.
changed its name to American Eagle Manufacturing Co. on September 25, 2003.
American Eagle Manufacturing Co. ("American Eagle") is the new parent of
American Eagle Corp, a Nevada Corporation and American Eagle Motorcycles, a
California Corp. American Eagle Manufacturing Co. has been formed to manufacture
and market possibly the finest proprietary motorcycles in America, as well as
expanding on the company's additional business acquisitions. The manufacturing
operations are conducted via the wholly-owned subsidiary, American Eagle
Motorcycles, a California corporation.
American Eagle intends to establish a small niche in the overall market for
high-end users of motorcycles. American Eagle occupies a 35,000 Sq Ft. building
in Carlsbad, California. The building serves as Corporate headquarters and a
manufacturing facility.
American Eagle recently completed setting up a its production facility.
Production has started on a start up basis. The Company had sales of
approximately $300,000 in the last two weeks of December 2003. American Eagle
anticipates commencement of full production at the facility in 2004. American
Eagle intends to implement a long-term manufacturing philosophy of an integrated
production line, which it expects will produce a standardized level of
excellence at a controllable cost.
DESCRIPTION OF PRINCIPAL PRODUCTS & SERVICES
American Eagle Motorcycles are completely handcrafted and hand-torqued to
specifications, with double powdered coated frames available in "trick" paint
schemes. American Eagle sells its motorcycles to a dealer at wholesale prices
that allows the dealer to offer the motorcycles at a retail price in the range
of $25,000 to $65,000 depending on the model and options. American Eagle's
Motorcycles are listed in the NADA valuation Guide and Kelly Blue Book and are
approved for financing by some major banks and finance houses in the
USA.
American Eagle offers three motorcycles under the "American Eagle" brand name:
- Falcon M-S Sport Cruiser. After extensive refining, re-engineering,
development and improvements, the new Falcon M-S Sport Cruiser is the end
product. With features, styling and performance worthy of being American
Eagle's "leading" product offering in its array of products and services.
This bike is a new and revolutionary advancement in motorcycle technology.
Its distinctive award winning design, configuration and styling is
completely different from other sport cruisers. It incorporates numerous
proprietary performance, handling and safety features, such as our
race-proven, mono-shock design with an aluminum cantilever swing arm and
adjustable rear shock absorber. Being designed from the ground up as a true
"Sport Cruiser," the primary goal for this bike is performance. To take
advantage of its "Z" rated tire, this bike is not only fast, but handles
like a pedigree canyon carver with balance and agility normally found on
sport bikes. In reality, it is a combination of custom cruiser, sport bike,
and power cruiser all working together in one beautiful package. The Falcon
M-S Sport Cruiser epitomizes "tomorrow's motorcycle today".
- Street Fighter. The Street Fighter is a sport tail pro-street Semi-Chopper
with available rakes of 36 to 43 degrees. These Motorcycles are powered
with optional 100ci to 113ci engines, with a 6-speed transmission. The bike
features billet and chrome components, a one piece stretched "Fat Bob's"
gas tank, 21" front tire and 18" 240 rear tire, with a strut-less 11" rear
fender, analog gauges, drag bars, slash-cut staggered dual exhaust and
custom paint schemes.
- Python. The Python is a 9-foot traditional style Chopper with a 46 degree
rake, powered by optional 100ci to 113ci engines with a 6-speed
transmission. Its features include billet and chrome components, a 1 piece
custom frame molded gas tank, 21" front tire and 18" 240 rear tire, a
strut-less 11 " rear fender, digital gauges, drag bars, and slash-cut
staggered dual exhaust.
- Raptor. The Raptor features the 45-degree rake as well as the enormous 250
rear tire, which gives you the 'old school' chopper feel with innovative
design and technology of today. The custom design wheels with matching
rotors and pulley is really an eye catcher. We have included a powerful top
of the line 100 cubic inch polished engine.
COMPETITIVE BUSINESS CONDITIONS
The market for motorcycles is highly competitive with a limited number of
premier companies (e.g., Harley Davidson, Honda, Kawasaki, Suzuki, Yamaha,
Victory, Big Dog and BMW) controlling the majority of the U. S. and
international markets. These competitors are established global companies that
have served these markets for several years. These competitors are more
diversified and have substantially greater financial, production, sales and
marketing resources than does the Company. The Company does not intend to go
head-to-head with these competitors.
Motorcycle sales in the U.S. are up for the tenth consecutive year. Cruisers
lead the market. Cruiser motorcycles comprise 55 percent of on-highway
motorcycle sales. Sport bikes rank second with more than 20 percent of
on-highway sales. Celebrities, executives, and the "couple next door" are all
part of a rapidly expanding group of cruiser motorcycle owners who want to
escape and enjoy the adventure and exhilaration of riding.
According to Motorcycle Industry Council (the "MIC") Motorcycle Owner Survey
(the "Survey"), motorcycle sales in the U.S. exceeded 788,000 units in 2001 for
the fourth straight year of double-digit increases and 862,000 units in 2002 and
more than 900,000 units in 2003. It is expected that the strong demand for
two-wheelers will result in the industry beating that mark by the end of 2004.
The Survey sheds more light on the demographics of today's rider. The
motorcyclist of 2003 is likely to be 38 years old, to have attended college, and
to be a well-established, family man. What's more, today's motorcyclist earns
$44,250, which is more than $36,250 earned by the average American. More than
33 percent of today's owners earn at least $50,000 per year compared to 20
percent of owners in 1990. Although a 1998 study found that the typical
motorcycle rider was male, recent trends reveal that women are joining the
motorcycle ownership ranks in record numbers. Women now represent 8.2 percent of
total motorcycle riders, up from 6.4 percent in 1990. One-third of the
Motorcycle Safety Foundation class graduates are women. According to the survey,
58 percent of the women versus 59 percent of the men are married. Interestingly,
women spent more than men spent on riding apparel ($317 versus $255) in 1998.
Sales of used motorcycles are estimated to be rising which is another indication
of the sustained enthusiasm for motorcycle riding. The number of previously
owned motorcycles sold in 1998 is estimated at 1.3 million, based on 67 percent
of MIC owner survey respondents who said they purchased a used motorcycle last
year.
DEPENDENCE ON ONE OR A FEW CUSTOMERS
The Company is currently dependent on one dealer to whom it sells motorcycles at
wholesale prices. The dealer has exclusive rights to the Southern California
and Clark County Nevada territories to develop fifteen dealerships. The Company
expects to be dependent on various other independent dealers, of which more than
twenty-five applications are in process for approval, as it expands its business
operations throughout the United States.
PATENTS, TRADEMARKS & LICENSES
American Eagle has applied for a trademark for its new logo. The Company has
also applied for and received a trademark for its "TEVIS" System (Tunable,
Engine, Vibration, Isolation, System). The Company is also in the process of
obtaining a patent for its new spring loaded "TEVUS" system.
RESEARCH & DEVELOPMENT OVER PAST TWO YEARS
The Company has completed its research and development of three new
high-performance motorcycles, the Python, Raptor and Streetfighter and is in the
final stages of a new springer motorcycle to be named the "Raven" . The Company
intends to introduce these bikes to the marketplace in early 2004.
American Eagle continually designs, develops, and tests prototypes of new
motorcycle designs and many of its proprietary components. To complement
American Eagle's in-house engineering staff, consulting engineers are retained
for their specific areas of expertise. American Eagle will continue to develop
and refine the design and components of the existing and future production
models in parallel with commercial production. Current development efforts
consist primarily of creating mock-ups and prototypes of new models, making
design changes for future models, and conducting tests to improve the
performance, safety, and durability of the current product line.
EMPLOYEES
American Eagle currently employs 20 full time personnel.
DESCRIPTION OF PROPERTY
American Eagle recently completed setting up a 35,000 square foot office and
production facility located at 2052 Corte Del Nogal, Carlsbad, California 92009.
The Company anticipates commencement of production at the facility in the first
quarter of 2004.
On September 30 2003 Eagle Corp. acquired the assets and business of FunKarts
La,("FunKarts") FunKarts Manufactures pedal, Electric and gasoline powered
mini-cars and go-carts. The product line includes racecar and truck replicas as
well as vintage automobile replicas. Traditionally, the Company marketed it
products as a promotional item for such sponsors as, Nestle, Amoco, Chevron and
NAPA Auto Parts. American Eagle is currently establishing avenues of
distribution with several national retail chains and mass merchandisers of
non-branded FunKarts. FunKarts will operate as a division of American Eagle
Manufacturing Co.
RISK FACTORS
Dependence Upon External Financing. It is important that we obtain debt and/or
equity financing of approximately $5,000,000 for at least the next year to
sustain our current operations. If we are unable to raise this capital, it would
have a materially adverse effect upon our ability to maintain current
operations.
Also, it is imperative that we raise capital to expand our operations. We
require additional capital to pursue our business strategy in becoming a major
player in our industry. If we are unable to obtain debt and/or equity financing
upon terms that our management deems sufficiently favorable, it would have a
materially adverse effect upon our ability for growth pursuant to our business
strategy.
Reliance on Key Management. Our success is highly dependent upon the continued
services of our management team. If any of our management team were to leave us,
it could have a materially adverse effect upon our business and operations.
The Company's auditor has raised an issue regarding the Company's ability to
continue as a going concern. The Company has not generated significant revenues
or profits to date. This factor among others, may indicate the Company will be
unable to continue as a going concern. The Company's continuation as a going
concern depends upon its ability to generate sufficient cash flow to conduct its
operations and its ability to obtain additional sources of capital and
financing.
The lawsuit brought by Wilkerson Consulting, Inc. raises concerns over the
continued control of the Company. In the event the Company cannot settle the
claims brought by Wilkerson Consulting, Inc. or obtain a favorable ruling with
respect to the default judgment previously obtained by Wilkerson Consulting,
Inc., it is possible that the Company's operations could be adversely affected.
Item 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
On December 15, 2003 the client-auditor relationship between American Eagle
Manufacturing Co., formerly Harbour Front Holdings, Inc. (the "Company") and
Malone & Bailey, PLLC ("Malone") ceased as Malone was dismissed as the Company's
Auditor.
To the knowledge of the Company's current Board of Directors, Malone's report of
the financial statements of the Registrant for the period from March 23,2001
through December 31, 2002 and any related interim period did not contain any
adverse opinion or disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principles.
During the audit of the Company's financial statements for the period from March
23,2001 through December 31,2002 and any subsequent interim period through the
date of dismissal, Malone did not have any disagreements with the Company on any
matter of accounting principles or practices, financial statement disclosure,
or auditing scope or procedure.
The financial statements reported on by Malone were not subject to any adverse
or qualified opinion, or a disclaimer of opinion and were not modified as to
uncertainty, audit scope or accounting principles from March 31, 2001 through
December 31, 2002, and the interim periods through the date of this report.
On December 15, 2003, the Registrant engaged Pollard-Kelley Auditing Services,
Inc. ("Kelley") as its independent accountant for the fiscal year ended December
31, 2003.
During the most recent fiscal year and any subsequent interim period prior to
engaging Kelley, the Company did not consult with Kelley regarding either (i)
the application of accounting principals to a specified transaction, either
completed or proposed; or the type of audit opinion that might be rendered on
the Company's Financial Statements; or (ii) any matter that was either the
subject matter of a disagreement (as defined in Item 304(a) (1)(iv) of
Regulation S-K and the related instructions) or a reportable event (as defined
in Item 304 (a) (1) (v) of Regulation S-K). Terrance L. Kelley has reviewed the
disclosure required by Item 304 (a) before it was filed with the Commission and
has provided an opportunity to furnish the Company with a letter addressed to
the Commission containing any new information, clarification of the company's
expression of its views, or the respects in which it does not agree with the
statements made by the Company in response to Item 304 (a). Kelley did not
furnish a letter to the commission.
The Company has requested that Malone review the disclosure and Malone has been
given an opportunity to furnish the Registrant with a letter addressed to the
Commission containing any new information, clarification of the Company's
expression of its views, or the respect in which it does not agree with the
statements made by the company herein. Such letter is filled as an exhibit to
this Report.
ITEM 5. OTHER EVENTS.
As a result of the acquisition of American Eagle Corp. and the change in focus
of the Registrant's business, the Registrant changed its name from Harbour Front
Holdings, Inc. to American Eagle Manufacturing Co. and now trades under the new
stock symbol AEMC. In addition, the former director and officer of the
Registrant resigned and the directors and officers of American Eagle Corp.
became the directors and officers of the Registrant. The new directors and
officers are as follows: Don R. Logan-Chief Executive Officer and Director; and
Barrie Logan-Vice President and Secretary. The Registrant also affected a 1:200
reverse stock split prior to the acquisition.
In June 2003 American Eagle Corp entered into a letter of intent to acquire
Delta Stag Corp., a manufacturer of truck bodies. The letter of intent has been
rescinded as of September 30, 2003. Problems in completing the audits of Delta
Stag Corp. made it impossible to complete the transaction.
CERTAIN RELATED PARTY TRANSACTIONS
Don Logan and Barrie Logan, the Company's officers and directors, received
periodic loans and advances against expenses from the Company. As of the date of
this filing, the aggregate principal outstanding balance of these loans and
advances against expenses is approximately $118,861.65.
Don Logan and Barrie Logan, the Company's officers and directors, are husband
and wife.
LEGAL PROCEEDINGS
On December 20, 2001 American Eagle Corp. and Don R. Logan entered into an
agreement to acquire certain assets from A.E. Technologies, Inc and or Gregory
Spak. Only a small portion of the assets were delivered to American Eagle.
American Eagle elected to rescind the contract and return the assets. This has
resulted in the following legal actions being filed: Gregory Spak VS American
Eagle Motorcycles filed February 27, 2003 Case No. GIN 027138 Superior Court
North San Diego County. The Court denied the claim finding for American Eagle.
Comerica Bank VS American Eagle and American Eagle VS Gregory Spak and A.E.
Technologies, Inc. filed June 20,2003 Case No Gv-818041 Superior Court County
of Santa Clara. Comerica Bank is seeking to recover equipment that secured a
loan to A.E. Technologies and Gregory Spak. A portion of the equipment has been
received by American Eagle and is being stored awaiting instructions to return
it to Comerica Bank. Comerica Bank is seeking $689,335. The management of
American Eagle feels it has no liability in this case.
A.E. Technologies, Inc. and Gregory Spak VS American Eagle Corp. ET AL filed
November 6, 2003 Case No 03CC00518 Superior court of Orange County Calif.
Gregory Spak and A.E. Technologies, Inc. are suing to recover assets and damages
for the breach of the contract that was rescinded by American Eagle. AE
Technologies and Gregory Spak are seeking $15,750,000 in damages. American Eagle
Management feels that they have very little if any liability in this matter. If
the court should find American Eagle liable in either of these cases it could
require American Eagle to issue more shares of stock to pay the damages. This
could result in dilution to shareholders.
On March 5, 2003, a default judgment was entered against The Bauer Partnership,
Inc., a former name of American Eagle Manufacturing Co. The 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 Inc. 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. The Company only recently became aware of the default judgment
and the original petition that had been filed. The Company does not believe it
was properly served and has filed a notice of appeal. Management believes
that the Company has liability in the range of $30,000.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Financial Statements of American Eagle Manufacturing Co.
(a) Audited consolidated Financial Statements of American Eagle Corp. as of
6-30-03.
Pollard-Kelley Auditing Services, Inc.
Auditing Services
3250 West Market St, Suite 307, Fairlawn, OH 44333 330-864-2265
American Eagle Corporation and Subsidiaries
(A Development Stage Company)
Carlsbad, CA
We have audited the Consolidated Balance Sheet of American Eagle Corporation and
Subsidiaries (a development stage company) as of June 30, 2003 and June 30, 2002
and the related Consolidated Statements of Income, Changes in Stockholders'
Equity, and Statement of Cash Flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on those financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. Audits include examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Audits also include assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
The Company has not generated significant revenues or profits to date. This
factor among others may indicate the Company will be unable to continue as a
going concern. The Company's continuation as a going concern depends upon its
ability to generate sufficient cash flow to conduct its operations and its
ability to obtain additional sources of capital and financing. The accompanying
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
In our opinion, based on our audits, the financial statements referenced above
present fairly, in all material respects, the financial position of American
Eagle Corporation and Subsidiary as of June 30, 2003 and June 30, 2002, and the
results of their operations and their cash flows for the years then ended, in
conformity with generally accepted accounting principles accepted in the United
States of America.
/s/ Terance L. Kelley
-------------------------
Terance L. Kelley
Certified Public Accountant
Fairlawn, Ohio
November 30, 2003
AMERICAN EAGLE CORPORATION (A Development Stage Company)
C0NSOLIDATED BALANCE SHEETS
June 30, 2003 and 2002
ASSETS
2003 2002
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CURRENT ASSETS
Cash $ 82,582 $ 83,226
Accounts receivable - Other 10,000 -
Accounts receivable - shareholder 70,230 2,580
Inventory 563,673 249,313
Prepaid interest 84,750 -
Prepaid expenses 35,463 10,991
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TOTAL CURRENT ASSETS 846,698 346,110
FIXED ASSETS
Furniture & fixtures 170,307 162,971
Equipment 96,123 750
Vehicles 76,080 53,580
Leasehold improvements 111,165 43,249
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453,675 260,550
Less: Accumulated depreciation (63,519) (17,708)
----------- ---------
390,156 242,842
OTHER ASSETS
Deposits 63,890 38,890
Trademarks & patents 25,354 22,255
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89,244 61,145
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$1,326,098 $650,097
=========== =========
See accompanying notes and accountant's report.
LIABILITIES AND STOCKHOLDERS' EQUITY
2003 2002
------------ ----------
CURRENT LIABILITIES
Notes payable $ 765,000 $ -
Accounts payable 37,100 9,136
Accrued interest 20,583 -
Accrued wages 5,783 -
Accrued and withheld taxes 2,530 -
------------ ----------
TOTAL CURRENT LIABILITIES 830,996 9,136
STOCKHOLDERS' EQUITY
Common stock 22,545 21,294
Additional contributed capital 1,690,568 735,877
Retained deficit (1,218,011) (116,210)
------------ ----------
495,102 640,961
------------ ----------
$ 1,326,098 $ 650,097
============ ==========
AMERICAN EAGLE CORPORATION ( A Development Stage Company)
CONSOLIDATED STATEMENT OF INCOME
For the Year ended June 30, 2003, for the Eight and One Half months ended June
30, 2002, and for the Period from October 15, 2001 (Date of Inception) Through
June 30, 2003 (Since Inception)
SINCE
2003 2002 INCEPTION
------------ ------------ ------------
REVENUES $ - $ - $ -
EXPENSES
Manufacturing 438,710 22,601 461,311
Sales and marketing 257,931 18,723 276,654
General and administrative 405,916 74,232 480,148
------------ ------------ ------------
1,102,557 115,556 1,218,113
------------ ------------ ------------
OPERATING LOSS (1,102,557) (115,556) (1,218,113)
OTHER INCOME
Miscellaneous 756 146 902
TAX PROVISIONS - (800) (800)
------------ ------------ ------------
NET LOSS $(1,101,801) $ (116,210) $(1,218,011)
============ ============ ============
LOSS PER SHARE ($0.05) ($0.01)
Average Share Outstanding 21,919,910 10,647,171
AMERICAN EAGLE CORPORATION (A Development Stage Company)
CONSOLIDATED STATEMENT CHANGES OF STOCKHOLDERS' EQUITY
For the Period from October 15, 2001 (Date of Inception) Through June 30, 2003 (Since Inception)
ADDITIONAL
PREFERRED STOCK COMMON STOCK PAID IN RETAINED
SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT TOTAL
------ ------- ---------- ------- ---------- ------------ ------------
Balance at Inception - $ - - $ - $ - $ - $ -
Shares for assets contributed - - 20,000,000 20,000 90,000 - 110,000
Stock sales - - 1,294,342 1,294 645,877 - 647,171
Net Loss - - - - - (116,210) (116,210)
------ ------- ---------- ------- ---------- ------------ ------------
Balance at June 30, 2002 - - 21,294,342 21,294 735,877 (116,210) 640,961
Shares for services - - 85,424 85 42,627 - 42,712
Stock sales - - 1,165,711 1,166 912,064 - 913,230
Net Loss - - - - - (1,101,801) (1,101,801)
------ ------- ---------- ------- ---------- ------------ ------------
Balance at June 30, 2003 - $ - 22,545,477 $22,545 $1,690,568 $(1,218,011) $ 495,102
====== ======= ========== ======= ========== ============ ============
See accompanying notes and accountant's report.
AMERICAN EAGLE CORPORATION (A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year ended June 30, 2003, for the Eight and One Half months ended June 30, 2002,
and for the Period from October 15, 2001 (Date of Inception) Through June 30, 2003 (Since
Inception)
SINCE
2003 2002 INCEPTION
------------ ---------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(1,101,801) $(116,210) $(1,218,011)
Adjustments to reconcile net earnings to net
cash provided (used) by operating activities:
Depreciation 45,811 17,708 63,519
Common stock for services 42,712 - 42,712
Changes in Current assets and liabilities:
(Increase) in Accounts receivable - Other (10,000) - (10,000)
(Increase) in Inventories (314,360) (249,313) (563,673)
(Increase) in Prepaid interest (84,750) - (84,750)
(Increase) in Prepaid expenses (24,472) (10,991) (35,463)
Increase in Accounts payable 27,964 9,136 37,100
Increase in Accrued interest 20,583 - 20,583
Increase in Accrued wages 5,783 - 5,783
Increase in Accrued taxes 2,530 - 2,530
------------ ---------- ------------
NET CASH (USED) BY
OPERATING ACTIVITIES (1,390,000) (349,670) (1,739,670)
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in Shareholder receivables (67,650) (2,580) (70,230)
Increase in deposits (25,000) (38,890) (63,890)
Increase in Trademarks (3,099) (22,255) (25,354)
Purchase of Fixed assets (193,125) (150,550) (343,675)
------------ ---------- ------------
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES (288,874) (214,275) (503,149)
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of Common stock 913,230 647,171 1,560,401
Increase in Notes payable 765,000 - 765,000
------------ ---------- ------------
NET CASH USED BY
FINANCING ACTIVITIES 1,678,230 647,171 2,325,401
------------ ---------- ------------
NET INCREASE (DECREASE) IN CASH (644) 83,226 82,582
CASH AT BEGINNING OF PERIOD 83,226 - -
------------ ---------- ------------
CASH AT END OF PERIOD $ 82,582 $ 83,226 $ 82,582
============ ========== ============
See accompanying notes and accountant's report.
AMERICAN EAGLE CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Development Stage Company
American Eagle Corporation and subsidiaries (the Company) are development stage
companies as defined under Statements of Financial Accounting Standards Number
7. The Company was incorporated in the state of Nevada on October 15, 2001. On
May 22, 2002 the Company formed American Eagle Manufacturing Corporation a
California corporation as a wholly owned subsidiary. The subsidiary has been
inactive since its formation. On June 19, 2003 the Company formed American Eagle
Manufacturing, GMBH a German Corporation as a wholly owned subsidiary.
The consolidated financial statements include the accounts of American Eagle
Corporation and American Eagle Manufacturing, GMBH its active wholly owned
subsidiary. All significant intercompany accounts and transactions have been
eliminated in consolidation.
Cash and Cash Equivalents
For the purposes of the statement of cash flows, the Company considers all
short-term debt securities to be cash equivalents.
Cash paid during the years for:
2003 2002
Interest $ $ -0-
Income taxes $ -0- $800
Inventories
Inventory costing at June 30, 2002 and June 30, 2003 uses the FIFO (first in,
first out) method. Inventory breakdown is as follows:
2003 2002
Raw Materials $137,350 $240,635
Work in Process 127,853 0
Finished Goods 298,260 0
------- ---------
Total $563,673 $240,635
======= =========
AMERICAN EAGLE CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Property and Equipment
Property and equipment are carried at cost. Maintenance, repairs and renewals
are expensed as incurred. Depreciation of property and equipment is provided
for on a straight line basis over their estimated useful lives as follows:
Furniture & fixtures 5-7 years
Equipment 7 years
Vehicles 5 years
Leasehold improvements 39 years
Other Assets
The Company's other assets are made up of Deposits with the landlord for rent.
Trademarks & Patents represent the Company's outside costs of establishing their
product's trademarks and some initial third party costs for patent applications.
These cost will be amortized over the estimated useful life of the trademark or
patent once the Company starts to sell product. The Company has not yet
established as estimated useful life for their trademarks or patents at this
time.
Income Taxes
The Company accounts for income taxes under principals, which requires the
Company to recognize deferred tax assets and liabilities for the expected future
tax consequences of events that have been recognized in the Company's financial
statements or tax returns. Under this method, deferred tax assets and
liabilities are determined based on the difference between the financial
statement carrying amounts and tax basis of the assets and liabilities using
enacted tax rates. The Company has no significant differences between book and
tax accounting. At June 30, 2003 the Company had an estimated tax loss
carryforward of approximately $1,000,000.
AMERICAN EAGLE CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Use of Estimates
The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
NOTE 2 - NOTES PAYABLE
During 2003 the Company entered into a series of notes with individuals. The
notes were due in either six or twelve months, had a 30% prepaid interest and
fees factor, bore interest at 7% to 15% and could be converted into shares of
the Company's common stock at the holder's option. Shares of the Company's
common stock also secure the notes. A summary of these note and their
provisions is as follows:
Date Amount Balance due Due date Interest rate Conversion rate
--------- -------- ----------- ---------- ------------- ---------------------
12/11/02 $150,000 $150,000 12/11/03 7% $.50 per share and
warrants at $2.00
for equal number of
shares.
02/05/03 $50,000 50,000 08/05/03 10% 80% of average price
02/28/03 $50,000 50,000 08/31/03 10% 80% of average price
03/31/03 $140,000 140,000 09/30/03 10% 80% of average price
05/31/03 $50,000 50,000 11/30/03 10% 80% of average price
05/31/03 $50,000 50,000 11/30/03 10% 80% of average price
05/31/03 $150,000 150,000 11/30/03 15% 80% of average price
05/01/03 $125,000 125,000 04/30/04 15% $2.00 per share
--------
Total $ 765,000
==========
AMERICAN EAGLE CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003
NOTE 3 - EQUITY
COMMON STOCK
The Company had 200,000,000 and 50,000,000 common shares authorized and
22,545,477 and 21,294,342 shares issued and outstanding at June 30, 2003 and
2002 respectively. Par value per share at the end of each year was $0.001.
PREFERRED STOCK
The Company had 10,000,000 and 100,000 shares authorized. There were no shares
outstanding at either June 30, 2003 or June 30, 2002. The terms of the
preferred stock are to be set by the board of directors when issued.
Warrants
The Company has issued warrants to purchase shares of stock for $2.00 per share.
The warrants were issued in December 2002, and continue up to the present. The
warrant holder has 24 months form the date of issue to exercise the warrant. At
June 30, 2003 the Company had issued 2,327,704 warrants.
NOTE 4 - RELATED PARTIES
The Company has from time to time made advances to its principal stockholder and
Chief executive officer. The advances are unsecured, and bear no interest. The
total outstanding under this informal arrangement was $70,230 and $2,580 at June
30, 2003 and June 30, 2002 respectively.
NOTE 5 - COMMITMENTS
On February 27, 2002 the Company entered into a five-year lease for its present
manufacturing and administrative facilities. The lease was to begin August 1,
2002. Lease payments are on a sliding scale as follows:
Period Monthly Rent
Months 1-8 $11,580
Months 9-12 $18,515
Months 12-24 $19,260
Months 25-36 $20,030
AMERICAN EAGLE CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003
NOTE 5 - COMMITMENTS - CONTINUED
Months 37-48 $20,830
Months 49-60 $21,670
The lease provides for an additional 60-month extension with proper notice.
Rent under the extension is at then current fair market value. The amount below
for fiscal 2008 is under this extension period and is estimated.
Future minimum payments due under this lease agreement are as follows:
Fiscal 2004 $229,715
2005 $239,530
2006 $249,430
2007 $259,420
2008 $269,000 estimated
NOTE 6 - GOING CONCERN
The Company has not generated significant revenues or profits to date. This
factor among others, may indicate the Company will be unable to continue as a
going concern. The Company's continuation as a going concern depends upon its
ability to generate sufficient cash flow to conduct its operations and its
ability to obtain additional sources of capital and financing. The accompanying
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
NOTE 7 - LEGAL PROCEEDINGS
On June 20, 2003 a bank filed suit against the Company and a shareholder for
$689,335 and to recover equipment that secured a loan to a third party. A
portion of the equipment has been received by the Company and is being stored
awaiting instructions to return it to the Bank. Management feels it has no
liability in this case.
On November 6, 2003 a shareholder and a third party filed suit against the
Company to recover assets and damages for breach of contract that was rescinded
by the Company. The suit seeks $15,750,000 in damages. The Company rescinded
the contract because the sellers did not have clear title to the assets they
were selling to the Company. Management feels it has little or no liability in
this matter. Management also feels that if it should be found liable in this
case it would be required to issue additional shares of it stock to satisfy the
liability.
AMERICAN EAGLE CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2003
NOTE 8 - SUBSEQUENT EVENTS
On November 6, 2003 a shareholder and a third party filed suit against the
Company to recover assets and damages for breach of contract that was rescinded
by the Company. The suit seeks $15,750,000 in damages. The Company rescinded
the contract because the sellers did not have clear title to the assets they
were selling to the Company. Management feels it has little or no liability in
this matter. Management also feels that if it should be found liable in this
case it would be required to issue additional shares of it stock to satisfy the
liability.
As of November 30, 2003 substantially all note holders at June 30, 2003 have
agreed to convert their notes to shares of the Company's common stock.
(b) Pro Forma consolidated Financial Statements of American Eagle
Manufacturing Co. as of 9-30-03.
The accompanying Pro Forma Consolidated Financial Statements should be read in
conjunction with the historical financial statements and related notes thereto
for American Eagle Corporation and Subsidiaries, Inc. and American Eagle
Manufacturing Co.
AMERICAN EAGLE MANUFACTURING CO.
PRO FORMA CONSOLIDATED BALANCE SHEET
September 30, 2003
ASSETS
American American Pro Forma
Eagle Eagle Entries
Corporation Manufacturing and
and Subsidiaries Co. Note Elimination's Consolidated
------------------ --------------- --------------- --------------
CURRENT ASSETS
Cash $ 136,689 $ - $ - $ 136,689
Accounts receivable - Other 10,000 - - 10,000
Inventory 770,144 - - 770,144
Prepaid expenses 26,568 - - 26,568
------------------ --------------- --------------- --------------
TOTAL CURRENT ASSETS 943,401 - - 943,401
FIXED ASSETS
Furniture & fixtures 192,735 - - 192,735
Equipment 1,448,549 - - 1,448,549
Vehicles 76,080 - - 76,080
Leasehold improvements 111,165 - - 111,165
------------------ --------------- --------------- --------------
1,828,529 - - 1,828,529
Less: Accumulated depreciation (74,972) - - (74,972)
------------------ --------------- --------------- --------------
TOTAL FIXED ASSETS 1,753,557 - - 1,753,557
OTHER ASSETS
Investments - - 1,2 - -
Deposits 38,890 - - 38,890
Trademarks & patents 25,354 - - 25,354
------------------ --------------- --------------- --------------
TOTAL OTHER ASSETS 64,244 - - 64,244
TOTAL ASSETS $ 2,761,202 $ - $ - $ 2,761,202
================== =============== ================ ==============
LIABILITIES AND EQUITY
American American Pro Forma
Eagle Eagle Entries
Corporation Manufacturing and
and Subsidiaries Co. Note Elimination's Consolidated
------------------ --------------- --------------- --------------
CURRENT LIABILITIES
Notes payable $ 150,000 $ 216,500 3 $ 336,650
Accounts payable 49,300 330,529 3 379,829
Accrued interest 2,300 - - 2,300
------------------ --------------- --------------- --------------
TOTAL CURRENT LIABILITIES 201,600 547,029 5 201,600
STOCKHOLDERS' EQUITY
Common stock 16,707 983 1,2 1,629 19,319
Additional contributed capital 4,162,711 7,770,328 1,2,4 (7,770,328) 4,162,711
Retained deficit (1,619,816) (8,318,340) 3,4 7,768,699 (2,169,457)
------------------ --------------- --------------- --------------
TOTAL STOCKHOLDERS' EQUITY 2,559,602 (547,029) - 2,559,602
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 2,761,202 $ - $ - $ 2,761,202
================== =============== ================ ==============
Notes
1. To record acquisition of American Eagle Corporation and Subsidiaries by American Eagle Manufacturing
Co.
2. To eliminate investment in American Eagle Corporation and Subsidiaries in consolidation.
3. Subsequent to September 30, 2003, a majority of the debts of the shell, American Eagle Manufacturing
Co. have been settled.
4. To record quasi reorganization to reduce retained deficit in American Eagle Manufacturing Co. to
approximately $0.
5. Does not reflect the settlement of approximately $420,000 of notes payable and accounts payable subsequent
to September 30, 2003.
(c) Exhibits:
2.1 (1) Exchange Agreement
16.1 (1) Letter from Malone & Bailey, PLLC
(1) Previously filed as an exhibit to the Form 8-K filed on December 18, 2003.
Item 8. CHANGE IN FISCAL YEAR
The Company's board of directors elected to change the Company's fiscal year end
from December 30th to June 30th. The Company will be filing a 10QSB for the
quarter ended December 31st.
Signatures
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
American Eagle Manufacturing Co.
February 10 2004
/s/ Don R. Logan
--------------------------------------------
Don R. Logan
Chief Executive Officer