U.S. SECURITES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
EAGLE GOLF CORP.
(Exact name of Small Business Issuer as specified in its charter)
Nevada 6770 88-0427630
(State or other (Primary standard (I.R.S. employer
jurisdiction of industrial identification
incorporation) classification code number)
number)
Hans U. Bothmann
EAGLE GOLF CORP.
7601 West Laredo
Las Vegas, NV 89117
(702) 252-0429
(Address and telephone number of principal executive offices and
principal place of business
and telephone number of agent for service)
Copies to:
Thomas C. Cook, Esq.
Thomas C. Cook & Associates
4955 S. Durango Dr., Suite 214
Las Vegas, Nevada 89113-0157
(702) 952-8519
Approximate date of commencement of proposed sale to public:
As soon as practicable after the registration statement becomes
effective. These 3,000,000 shares are being offered through NevWest
Securities Corporation, an agent of the issuer. We intend to sell a
minimum of 500,000 shares.
Closing date: August, 2003, (365 days from the date of this prospectus)
Funds will be held in a non-interest bearing escrow account under Rule
419 until the minimum required shares are sold. If the minimum has not
been raised by the closing date, all funds will be returned within 10
(ten) days by first class mail.
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS,"
BEGINNING ON PAGE 11
If this Form is filed to register additional securities for an offering
according to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number
of the earlier effective registration statement for the same offering.
/ / ___X___
If this Form is a post-effective amendment filed according to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier
registration statement for the same offering. / /_______
If this Form is a post-effective amendment filed according to Rule
462(d) under the Securities Act, check the following box and list the
Securities Act registration number of the earlier effective
registration statement for the same offering. / /_______
If delivery of the prospectus is expected to be made according to Rule
434, please check the following box. / /_______
We hereby amend this registration statement on such date or dates as
may be necessary to delay its effective date until we file a further
amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall
become effective on a date as the SEC, acting pursuant to said Section
8(A), may determine.
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THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY
BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SEC IS EFFECTIVE. THIS PRELIMINARY PROSPECTUS
IS NOT AN OFFER THESE SECURITIES IN ANY STATE WHERE THE OFFER OF SALE
IS NOT PERMITTED.
Prospectus (Subject to completion): Dated August 28, 2002.
/1/
TITLE OF EACH PROPOSED
CLASS OF PROPOSED MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED SHARE1 PRICE1 FEE
Common Stock
$0.001 par 3,000,000 $0.05 $0.05
value
TOTAL 3,000,000 N/A $150,000 $30.00
1. Estimated solely for the purpose of calculating the registration fee
and pursuant to Rule 457.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states
that this Registration Statement shall thereafter become effective in
accordance with Section 8(A) of the Securities Act of 1933 or until
this Registration Statement shall become effective on such date as the
commission, acting pursuant to said Section 8(A), may determine.
[Note: The following section of cross-referenced material is not to
appear in the prospectus itself.]
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PART I - INFORMATION REQUIRED IN PROSPECTUS
Cross Reference Sheet showing the location in Prospectus of information
required by items of Form SB-2
Item No. Required Item Location of Caption in Prospectus
1. Forepart of the Registration and Cover Page; Outside front page of
Outside Front Cover of Prospectus Prospectus
2. Inside front and outside back cover Inside front and outside back
pages of Prospectus cover pages of Prospectus
3. Summary Information and Risk Factors Prospectus Summary; Risk Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Prospectus Summary-
Determination of Offering Price;
Risk Factors
6. Dilution Dilution
7. Selling Security Holders Not Applicable
8. Plan of Distribution Plan of Distribution
9. Legal Proceedings Legal Proceedings
10. Director, Executive Officer, Management
Management, Promoters and Control
Persons
11. Security Ownership of Certain Principal Shareholders
Beneficial Owners and Management
12. Description of Securities Description of Securities
13. Interest of named experts and counsel Legal Matters; Experts
14. Disclosure of Commission Position on Statement as to Indemnification
Indemnification for Securities
Act Liabilities
15. Organization within the last Management, Certain Transactions
five years
16. Description of Business Proposed Business
17. Management's Discussion and Plan of Operation
Analysis or Plan of Operation
/3/
18. Description of Property Proposed Business
19. Certain Relationships and Certain Transactions
Related Transactions
20. Market for Common Equity and Prospectus Summary, Market for
Related Stockholder Matters Registrant's Common Stock and
Related Stockholders' Matters;
Shares Eligible for Future Sale
21. Executive Compensation Management
22. Financial Statements Financial Statements
23. Changes in and Disagreements with Not Applicable
Accountants on Accounting and
Financial Disclosure
PART II - INFORMATION NOT REQUIRED IN THE PROSPECTUS
24. Indemnification of Indemnification of
Officer/Director Officer/Director
25. Shareholder approval and Shareholder approval and
informational statement informational statement
26. Officer and Director Disclosure Officer and Director Disclosure
27. Other Expenses of Issuance Other Expenses of Issuance
and Distribution and Distribution
28. Recent Sale of Unregistered Recent Sale of Unregistered
Securities Securities
29. Exhibits Exhibits
30. Undertakings Undertakings
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/4/
Prospectus
3,000,000
EAGLE GOLF CORP
Common Stock
This is EAGLE GOLF CORP.'s initial public offering.
Prior to this Offering, no public market exists for these shares.
Investing in common stock involves risks that are described in the Risk
Factors section beginning on Page 11 of this Prospectus.
OFFERING INFORMATION
Shares Price To Selling Proceeds To
Offered Public Commissions (1) Company (2)
Per share $0.05 $ 0.005 $ 0.045
Min. Share Amount 500,000 Shares $25,000 $ 2,500 $22,500
Max. Share Amount 3,000,000 Shares $150,000 $15,000 $135,000
(1) We are offering for sale 3,000,000 shares of common stock, at a
purchase price of $0.05 per share. Exclusively we on a direct
participation basis shall sell the shares for a period of 365 days.
This offering will be conducted directly by us through our
officer/director according to the safe harbor provisions of
Rule 3a4(1) of the Securities Exchange Act of 1934.
(2) The minimum offering or proceeds to be raised is $25,000. The
maximum offering or proceeds to be raised is $150,000.
Our offering is being made in compliance with Rule 419 of SEC
Regulation C, under which the offering proceeds and the securities to
be issued to purchasers will be placed in an escrow account until the
offering has been reconfirmed by our shareholders and a business has
been acquired in accordance with the provisions of that rule. Under SEC
Rule 3a51-1(d) under the Exchange Act, the securities we are offering
constitute penny stocks, and as such, certain sales restrictions apply
to them. Up to 80% of the offering may be purchased by our
officer/director, who is also our sole shareholder, and any of her
affiliates or associates. No public market currently exists for our
common stock. No public market may ever develop. Even if a market
develops, you may not be able to sell your shares.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is August 28, 2002
/5/
TABLE OF CONTENTS
Page
PART I - INFORMATION REQUIRED IN PROSPECTUS 3
PART II - INFORMATION NOT REQUIRED IN THE PROSPECTUS 4
OFFERING INFORMATION 5
PROSPECTUS SUMMARY 9
SUMMARY FINANCIAL INFORMATION 10
RISK FACTORS 11
FORWARD-LOOKING STATEMENTS 18
YOUR RIGHTS UNDER RULE 419 18
DILUTION 21
USE OF PROCEEDS 22
CAPITALIZATION 25
PROPOSED BUSINESS 27
PLAN OF OPERATION 33
DESCRIPTION OF CAPITAL STOCK 34
SHARES ELIGIBLE FOR FUTURE SALE 35
MANAGEMENT 36
CONFLICTS OF INTEREST 37
PRINCIPAL SHAREHOLDER 38
UNDERWRITING 39
CERTAIN TRANSACTIONS 40
WHERE CAN YOU FIND MORE INFORMATION? 41
MARKET FOR OUR COMMON STOCK 41
REPORTS TO STOCKHOLDERS 42
LEGAL MATTERS 42
EXPERTS 42
PART F/S 43
FINANCIAL STATEMENTS 43
PART F/S 53
FINANCIAL STATEMENTS 53
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS 60
ITEM 25. DISCLOSURE OF ANY PREVIOUS INVOLVEMENT OF ANY OFFICER OR
DIRECTOR OF THE ISSUER IN ANY SIMILAR OFFERING 61
ITEM 26. SHAREHOLDER APPROVAL AND INFORMATIONAL STATEMENT 61
ITEM 27. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION 61
ITEM 28. RECENT SALES OF UNREGISTERED SECURITIES 62
ITEM 29. EXHIBITS 62
ITEM 30. UNDERTAKINGS 63
SIGNATURES 63
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Dealer Prospectus Delivery Obligation
No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained
in this prospectus, and if given or made, such information or
representations must not be relied upon as having been authorized by
us. This prospectus does not constitute an offer to sell or a
solicitation of any offer to buy any securities in any jurisdiction in
which such an offer or solicitation would be unlawful. The delivery of
this prospectus shall not under any circumstances create any
implication that there has not been any change in our affairs since the
date of delivery; however, any changes that may have occurred are not
material to an investment decision. In the event there have been any
material changes in our affairs, a post-effective amendment will be
filed. We reserve the right to reject any order, in whole or in part,
for the purchase of any of the shares offered.
Until 90 days after the date when the funds and securities are released
from the escrow account, all dealers effecting transactions in the
shares, whether or not participating in this distribution, may be
required to deliver a prospectus. This is in addition to the
obligation of dealers to deliver a prospectus when acting as
underwriters to their unsold allotments or subscriptions.
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/7/
PROSPECTUS SUMMARY
EAGLE GOLF CORP
7601 West Laredo
Las Vegas, NV 89117
(702) 252-0429
THIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE IN THIS
PROSPECTUS. BECAUSE THIS IS A SUMMARY, IT MAY NOT CONTAIN ALL OF THE
INFORMATION THAT YOU SHOULD CONSIDER BEFORE RECEIVING A DISTRIBUTION OF
OUR COMMON STOCK. YOU SHOULD READ THIS ENTIRE PROSPECTUS CAREFULLY.
We were organized under the laws of the State of Nevada on February 20,
1996, under the name EAGLE GOLF CORP. ("Eagle"). We are a development
stage entity, and have neither engaged in any operations nor generated
any revenues to date.
We were organized as a vehicle to acquire or merge with an existing
business or company. A company with this purpose and structure is
referred to as a blank check company as defined in Rule 419 of
Regulation C under the Securities Act of 1933.
We have not yet identified any specific target business or company.
More about Rule 419:
The securities purchased by you and other investors and the funds
received in the offering will be deposited and held in an escrow
account until an acquisition meeting specific criteria is completed.
Once that agreement has been executed, we will update the registration
statement with a post-effective amendment. This will give details of
the acquisition. You will then have 45 days to reconfirm your
investment. Investors who do not reconfirm will receive a refund.
Funds and securities will be released once the escrow agent is
satisfied that all provisions have been met and the transaction has
closed. (See Your Rights under Rule 419.)
Persons should not purchase shares in the offering if they expect short-
term earnings or appreciation in the value of our Company.
The Offering:
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Securities offered 3,000,000 shares of common stock, $0.001 par value,
Maximum Offering.
500,000 shares of common stock, $0.001 par value,
Minimum Offering.
These shares are being offered through an
underwriter.
$0.05 per share. (See "Description of Capital
Stock.")
Common stock outstanding 3,500,000 shares
prior to offering
Common stock to be 6,500,000 shares (Maximum Offering)
outstanding after offering 4,000,000 shares (Minimum Offering)
Dilution: Dilution to the investors in this offering will be approximately
85.70% (minimum offering per share) and 52.30% (maximum offering).
Dividends: No dividends have yet been paid and none will be paid in the
foreseeable future.
/8/
Limited State Registration: Initially, our securities may be sold in
Nevada only (although we are considering registering the shares in
other states) according to filings in the State of Nevada. (See
"Special State Law Considerations" for a discussion of the resale
limitations that result from this limited state registration.)
Use of Proceeds: If the maximum shares are sold, the gross proceeds of
this offering will be $150,000; if the minimum shares are sold, the
gross proceeds of this offering will be $25,000. Though we could
request 10% of these funds under Rule 419 prior to the reconfirmation,
we do not intend to do so. Less approximately $2,500 in escrow and
offering expenses, proceeds will be used to defray the costs of finding
and consummating a business combination.
Plan Of Distribution: No person associated with us intends to
participate in the distribution of the Offering. For purposes of the
said distribution, we have engaged the services of NevWest Securities
Corporation ("NevWest"), a registered broker/dealer. Neither NevWest
nor any other NASD member, its associated persons, parent, or
affiliates have a conflict of interest with us, as defined in NASD Rule
2720.
Proposed Business: Eagle will not restrict its search to any
particular business, industry, or geographical location, and may
evaluate and enter into any type of business in any location. In
seeking a business venture, the decision of management will be based on
the business objective of seeking long-term capital appreciation in the
real value of the business acquired by Eagle.
The analysis of new businesses will be undertaken by or under the
supervision of our officer/director. It is anticipated that the
analysis of specific proposals and the selection of a business will
take several months, to which additional months will be added by the
reconfirmation process of Rule 419.
For details of the way in which an acquisition might be structured, see
"Proposed Business: Form and Structure of Acquisition, pg.31."
Daily Operations: Until an active business is commenced or acquired,
we will have no employees or day-to-day operations.
Plan of Operation: As of February 20, 1996, we have no significant
expenses with the exception of incorporation fees, accounting fees, SEC
filing fees, and escrow establishment fees. Virtually all of our
expenses, to be funded by the money in our treasury or by management,
are attributable to our efforts to identify a suitable acquisition
candidate and close the acquisition. Up to that time, we anticipate
our expenses to be limited to accounting, legal, transfer agent, and
filing fees, plus telephone and mailing expenses.
Management: Hans Bothmann of Las Vegas, Nevada is the sole officer,
director, and shareholder of Eagle. He has extensive business
experience; this is his first experience with a 419 company. He
currently receives no salary or other compensation and devotes time to
Eagle in and around other activities.
Method of Subscribing: Prospective investors should make their checks
payable to LaSalle Bank National Banking Association (escrow agent) fbo
Eagle Golf Corp., and remit the checks and subscription agreements to
LaSalle Bank National Banking Association, whose address is 135 South
LaSalle Street, Suite 1960, Chicago, Illinois 60603. Subscriptions may
not be withdrawn once made except in accordance with applicable law.
We reserve the right to reject all or part of any subscription at our
sole discretion even if payment is made, and to withdraw this blank
check offering at any time prior to our acceptance of the subscriptions
received.
/9/
SUMMARY FINANCIAL INFORMATION
The table below contains certain summary historical financial data for Eagle.
The historical financial data for the period ended June 30, 2002 has
been derived from our financial statements appearing elsewhere in this
prospectus and should be read in conjunction with those financial statements
and the notes to them.
June 30, 2002
INCOME STATEMENT:
Net Sales $0
Net Income (Loss) $(5,635)
BALANCE SHEET (at end of period):
Cash on Hand $3,365
Due from shareholder $0
Total Assets $4,444
Total Indebtedness $0
Total Shareholders' Equity $1,079
PER SHARE(1):
Income per common share $0
Net Income per common share (at end of period) $(0.00)
Net Income per share on a fully diluted basis $(0.00)
(1) Number of shares of common stock outstanding
during period was 3,500,000.
This offering will expire 365 days from the date of this prospectus.
The offering will not be extended.
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/10/
RISK FACTORS
There is a high degree of risk associated with an investment in our
common stock. You should know that our business, financial condition
or results of operations, and, more importantly, that of any business
we acquire, could be materially and adversely affected by any of the
following risks. You should carefully consider the following factors
in addition to the other information in this prospectus before
considering the purchase of shares.
Investing in a Blank Check Offering entails certain disadvantages.
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Our business may enter into a business combination with an entity,
which does not need substantial additional capital but desires to
establish a public trading market for its shares. A business
opportunity may attempt to avoid what it deems to be adverse
consequences of undertaking its own public offering by seeking a
business combination with us. Such consequences may include, but are
not limited to, time delays of the registration process, significant
expenses to be incurred in such an offering, loss of voting control to
public shareholders and the companies merging with or acquiring a blank
check company are required, at the minimum, to file all information
required by a Form 10 Registration with the U. S. Securities and
Exchange Commission.
They might do so because of various factors that they consider
entailing disadvantageous situations or conditions. The time delays
that would be attendant on preparing the proper documentation might
constitute one such factor. Significant expenses involved in going
public might be another. Entrepreneurs and company founders might fear
the potential loss of voting power that could put control of their own
companies at risk.
In making an investment in us, therefore, you may be doing so under
terms that might ultimately be less favorable than those to be had by
investing directly in a company with a specific business in which these
sorts of unforeseeable issues do not come into play. The name blank
check, after all, was chosen to give notice that, like a literal blank
check you might issue with your authorizing signature and no amount
filled in above it, elements of uncertainty are inherent in the
process.
A business reorganization may dilute your investment and reduce your
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equity interest in the company.
- -------------------------------
It is likely that we will issue additional shares of common stock or
preferred stock in connection with our potential merger, consolidation,
or other business reorganization, and that the proceeds of the offering
will be used in the business of the acquisition or merger candidate,
though we will not make loans of the offering's net proceeds. The
consequences may be a change of control of EAGLE GOLF CORP, significant
dilution to the public shareholders' investment, and a material
decrease in the public shareholders' equity interest in the company.
Since we have not made any determination with respect to the
acquisition of any specific business, we cannot speculate on the form
of any potential business reorganization or on the amount of securities
that we might issue in connection with it. At its sole discretion, the
board of directors may issue additional company securities without
seeking shareholder approval.
There is a substantial possibility that the shareholders of Eagle
immediately prior to the transaction would retain less than 50% of the
issued and outstanding shares of the surviving entity. Therefore,
regardless of the form of the business acquisition, it may be
anticipated that the investors in this offering will experience a
significant reduction in their percentage of ownership in the company.
(See "Acquisition of a Business," in PROPOSED BUSINESS).
/11/
Shares in this offering are available only to residents of Nevada and
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will be difficult to resell or transfer.
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Initially, these shares are being made available only to residents of
the state of Nevada because of the simplicity of selling a small
offering under the laws of that state: Registration there is not
necessary if fewer than twenty-five people purchase the shares in a
given offering. Without registering them there, however, the shares
cannot be sold or transferred. As this may never happen, the ability to
resell or transfer these shares is unlikely.
You are subject to dilution that will lower the value of your shares.
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The difference between the initial public offering price per share of
common stock and the net tangible book value per share after this
offering constitutes the dilution to investors in this offering. Net
tangible book value per share of common stock is determined by dividing
our net tangible book value by the number of shares of common stock
outstanding.
Assuming the sale of the maximum number of shares based on our
financial statements as of June 30, 2002, new investors will incur
an immediate dilution of approximately 52.30% per share after
the offering of the maximum number of shares is consummated. The
existing stockholder of our company acquired his shares of common stock
at a price of $0.001 per share that is $.049 per share lower than the
offering price of the shares. Accordingly, new investors will bear
virtually all of the risks inherent in an investment in this company.
(See "DILUTION").
There may not be a public market for the shares you buy.
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There is no current trading market for the shares, nor can we say for
certain that a trading market will develop, or, if a trading market
does develop, that it will be sustained even after we identify a merger
candidate and consummate a business combination. The shares, to the
extent that a market develops for the shares at all, will likely appear
in what is customarily known as the Pink Sheets or on the NASD's Over-
the-Counter Bulletin Board, which may limit the marketability and
liquidity of the shares. (See Risk Factor, "There are rules for low-
priced stocks that may affect your ability to resell your shares.")
According to Rule 419, all shares issued by a blank check company, must
be placed in the Rule 419 escrow account. These shares will not be
released from the Rule 419 escrow until (1) the consummation of a
merger or acquisition as provided for in Rule 419, or (2) the
expiration of 365 days from the date of this prospectus. There is no
present market for our common stock and there is no likelihood of any
active and liquid public trading market developing following the
release of securities from the Rule 419 escrow. Thus, stockholders may
find it difficult to sell their shares.
As a shareholder, you will have limited rights in an acquisition.
- -----------------------------------------------------------------
Although investors may request the return of their investment funds in
connection with the reconfirmation offering required by Rule 419, the
shareholders of Eagle may not be afforded an opportunity specifically
to approve or disapprove any particular business reorganization or
acquisition. Our officer/director will be able to consummate an
acquisition without shareholders approval.
Certain circumstances could constitute exceptions. Under applicable
corporate law, only in the event of a merger, consolidation, or the
sale of all or substantially all of our assets, will you as a
shareholder have the right to object to the merger, consolidation, or
sale and assert your dissenter's right to appraisal of your shares.
Similar restrictions apply if an acquisition is consummated in the form
of an exchange of
/12/
securities. Though ultimately protected by the reconfirmation, this could
adversely affect the furthering of your interests within the structure of
Eagle.
There are currently no negotiations in progress regarding an
- -------------------------------------------------------------
acquisition or merger, thus delaying any return on your investment.
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Eagle's officer/director has not had any preliminary contact or
discussion, and there are no present plans, proposals, arrangements or
understanding with any representatives of the owners of any business or
company regarding the possibility of the acquisition or merger
transaction contemplated in the prospectus. Potential investors are
cautioned that this may extend even further the amount of time before
you would see any return on your investment. As of the date of this
prospectus, we have not entered into or negotiated any arrangements for
a business combination with an acquisition candidate.
Resources could be wasted in researching acquisitions that do not work out.
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It is anticipated that the investigation of specific businesses and the
negotiation, drafting, and execution of relevant agreements, disclosure
documents, and other instruments will require substantial management
time and attention and substantial costs for accountants, attorneys,
and others. If a decision is made not to participate in a specific
business, the costs incurred up to that point in the related
investigation would not be recoverable. Furthermore, even if an
agreement is reached for the participation in a specific business, the
failure to consummate that transaction may result in a loss to us of
the related costs incurred which could materially adversely affect
subsequent attempts to locate and participate in additional businesses.
We expect a merger or acquisition transaction to result in a change in
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control, and our current management will not have any power to
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influence us after a consummated merger or acquisition transaction.
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We expect that any merger or acquisition transaction that we engage in
with a privately-held company will effectively result in the owners and
management of the privately-held company having actual or effective
operating control of us. After this change in control, the owners and
management of the privately-held company will have the right to appoint
their own officers and directors, and our current management will have
no ability to influence future business decisions. After a change in
control, our current management will not have any power to seek a
market listing for our stock or take any other action to promote an
active public market in our stock. If new management does not devote
sufficient time and resources to developing and promoting an active
trading market, you may be unable to sell your shares at any price.
Auditors have issued an opinion raising substantial doubt as to our
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ability to continue as a going concern.
- ---------------------------------------
In a letter that accompanies this application, our accountant, G. Brad
Beckstead, says in part, 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 has had
limited operations and has not commenced planned principal operations.
This raises substantial doubt about its ability to continue as a going
concern. Management's plan in regard to these matters are also
described in Note 5.
Potential investors should be aware of this opinion and the fact that
no guarantees can be given that our strategies for business success
will overcome the obstacles referred to in Mr. Beckstead's letter.
/13/
A limitation on acquisitions could hamper our ability to forge the
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right business combination.
- ---------------------------
Eagle is subject to Rule 419 and certain reporting requirements of the
Securities Exchange Act of 1934. This requires us to furnish certain
information about significant acquisitions, including audited financial
statements for the company(s) acquired for one, two, or three years,
depending on the relative size of the acquisition. Consequently, the
acquisition prospects available to the Company are limited to those
that can provide the required audited financial statements. This
further hampers our ability to acquire desirable going concerns. (See
"PROPOSED BUSINESS: Other Ramifications of Rule 419 on the Selection
Process.").
We have extremely limited capitalization.
- ------------------------------------------
The offering is a direct participation offering for which the minimum
amount is only $25,000. Management faces the challenge of successfully
implementing our business strategy and plan. We may not be able to
successfully manage our business to achieve our goals if we must
proceed having raised only the minimum offering. Investors could
suffer a loss if as a consequence the amount raised is not enough to
fully implement the intended business strategy. Even if we are
successful in raising up to the maximum amount we seek, $150,000, this
might not be enough to successfully identify a merger candidate and
consummate an acquisition.
Inability to secure financing after acquisition may force us to use
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venture capital at exorbitant interest rates.
- ----------------------------------------------
It is possible that the Company will not have sufficient funds from the
proceeds of this offering to fully undertake the development,
marketing, and manufacturing of products that may be acquired.
Although there are no specific business combinations or other
transactions contemplated by management, it may be expected any such
target business will present such a level of risk that conventional
private or public offerings of securities or conventional bank
financing would not be available to us once we have acquired the
business. In that case the target company might be forced to seek
venture capital for initial operations, available only at very high
interest rates, if at all. The ensuing burden of debt would further
limit chances for success. And of course there is no guarantee that
such financing would be obtained even if sought.
A leveraged buy-out could expose us to a high risk of business failure.
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A leveraged buy-out is one that involves financing the acquisition of a
business by borrowing on the assets of the business to be acquired.
This practice, if it were to be employed by Eagle as its strategy for
acquisition, would expose us - and by extension your investment - to
significant risk.
For one thing, there can be no assurance any business acquired through
a leveraged buy-out would generate sufficient revenues to cover the
related debt and expenses. In that case, the lender could exercise the
remedies provided by law and foreclose on Eagle and all its assets.
Furthermore, the use of leverage to consummate a business combination
may reduce our ability to incur additional debt, make other
acquisitions, or declare dividends, and may subject our operations to
strict financial controls and significant interest expense. It may be
expected we will have few, if any, opportunities to utilize leverage in
an acquisition. Even if we were able to identify a business where
leverage may be used, there is no assurance financing will be
available, or if available, on terms we would find acceptable. (See
Acquisition of a Business: "Leverage").
/14/
A lack of diversification means we lack the flexibility we may need to
- -----------------------------------------------------------------------
succeed.
- --------
In the event we are successful in identifying and evaluating a suitable
business combination, we will, in all likelihood, be required to issue
our common stock in an acquisition or merger transaction. Because our
capitalization is limited and the issuance of additional common stock
will result in a dilution of interest for present and prospective
shareholders, we will negotiate only one acquisition or merger.
This lack of diversification should be considered a substantial risk of
investing in Eagle because it will not permit us to offset potential
losses from one venture against gains from another.
We are dependent on one officer with limited formal business
- ------------------------------------------------------------
experience.
- -----------
Eagle is highly dependent of the services of Hans Bothmann, the
president and sole director of the company. Over-reliance on a single
individual puts the company at risk; should anything happen to Mr.
Bothmann, or if he for unpredictable reasons became disabled or lost
interest in Eagle, the effect on our prospects would be severe.
However, it should be noted, that he has not served as a founder,
officer, and director of any other companies formed with the express
purpose of seeking available businesses, and he does not have extensive
or broad business experience.
Since we have not yet attempted to seek a business combination, and due
to our lack of experience, there is only a limited basis upon which to
evaluate our prospects for achieving our intended business objectives.
Furthermore potential investors should know that the process of seeking
out and then qualifying an appropriate acquisition is a lengthy and
involved one.
The time to be devoted by management may be inadequate.
- -------------------------------------------------------
Eagle's sole officer plans to spend little to no time with the Company
until this Registration is approved. As he does not devote his full
time to the Company, we may end up missing a target opportunity for
business combination. Once this registration is approved, the officer
will spend 10-12 hours per week, implementing the Offering process.
(See "MANAGEMENT").
Present management who is also the primary shareholder holds a
- ---------------------------------------------------------------
substantial amount of control.
- ------------------------------
Assuming the sale of all the shares offered, the shares of common stock
purchased by the public will represent 46.0% of our outstanding common
stock after the completion of this offering. Therefore, our present
stockholder will own a 54.0% interest in us and will not continue to be
able to elect our directors, appoint our officers, and control our
affairs and operations. Our articles of incorporation do not provide
for cumulative voting.
You should be aware that if the minimum amount of shares are sold, our
present stockholder will hold 80.0% of the company's stock and thus
continue to elect all directors, appoint all officers, control our
affairs and operations, and outvote all investors who may participate
in this offering.
It is possible that our principal stockholder, also the
- --------------------------------------------------------
officer/director, may sell her shares at a premium to the shareholders
- ----------------------------------------------------------------------
or management of whatever company Eagle may acquire in a way that you
- ----------------------------------------------------------------------
cannot.
- -------
It should be noted that his shares are not being registered on this
registration statement, and therefore, he cannot sell his shares when
this registration statement is declared effective. No such sales,
however, can be consummated before the registration statement has been
made effective.
/15/
The officer/director of Eagle, currently owns 100% of the common stock
presently issued and outstanding. He paid $3,500 for these shares. He
may, in connection with a proposed merger or acquisition transaction,
actively negotiate or consent to the purchase of his common stock,
though he cannot legally do so until our registration statement has
been made effective. A premium may be paid on this stock in connection
with such a purchase, but public investors will neither receive any
portion of the premium that may be paid nor be afforded an opportunity
to approve or consent to any particular stock buy-out. Nor will they
be afforded a similar opportunity.
We have not adopted any policy for resolving this conflict. Potential
investors should be aware of this contradiction in the structure of
this offering.
Management's discretion in the use of proceeds may conflict with your
- ---------------------------------------------------------------------
wishes.
- -------
We have some discretion in the use of proceeds.
Of the $25,000-$150,000 offering proceeds deposited into the escrow
account, 10%, or $2,500-$15,000, may be released to us prior to a
confirmation offering in which you reconfirm your investment in
accordance with procedures required by Rule 419. We do not intend to
request release of the 10% funds. Accordingly, we will receive all of
the escrowed funds in the event a business combination is closed under
the provisions of Rule 419. We will use these proceeds as indicated in
this document under the section titled USE OF PROCEEDS but have
considerable discretion in deciding how to allocate funds. Investors
should be aware of the fact that their wishes may not be reflected in
the decisions of management in these matters. If we fail to spend the
proceeds effectively, our business and financial condition could be
harmed. (See "USE OF PROCEEDS").
Our inability to evaluate investments could lead us into an unwise
- ------------------------------------------------------------------
investment.
- -----------
Our limited funds and the lack of full-time management will likely make
it impracticable to conduct a complete and exclusive investigation and
analysis of a business. Therefore, management decisions will likely be
made without detailed feasibility studies, independent analysis, market
surveys, and the like which, if we had more funds available, would be
desirable. Eagle will be particularly dependent in making decisions on
information provided by the promoter, owner, sponsor, or others
associated with the businesses seeking our participation, and which
will have a direct economic interest in completing a transaction with
us. In a worse case scenario, this could lead us to make a poor
decision because we might lack the fullest possible knowledge of the
relevant facts.
The failure of a sufficient number of investors to reconfirm their
- ------------------------------------------------------------------
investment could jeopardize the entire transaction.
- ---------------------------------------------------
A business combination with an acquisition candidate cannot be closed
unless, for the reconfirmation offering required by Rule 419, we can
successfully convince you and a sufficient number of investors
representing 80% of the offering proceeds raised to elect to reconfirm
your investments. If, after completion of the reconfirmation offering,
a sufficient number of investors do not reconfirm their investment, the
business combination will not be closed. Given this scenario, none of
the securities held in escrow will be issued and the funds will be
returned to you on a proportionate basis. Up to 80% of the shares may
be purchased by our officers, directors, current shareholders and any
of their affiliates or associates. It is likely that these insiders
will elect to reconfirm a proposed business combination reducing or
eliminating your effect on the outcome of the 80% required
reconfirmation.
/16/
If you invest, you will not be able to transfer your escrowed
- -------------------------------------------------------------
securities.
- -----------
No transfer or other disposition of the escrowed securities is
permitted other than by will or the laws of descent and distribution,
or under a very specific section of the tax code related to divorce.
Potential investors should be aware that your ability to sell or
transfer these securities while they are in escrow, or any interest in
them, is severely limited, significantly affecting their liquidity and
your flexibility.
There are rules for low-priced stocks that may affect your ability to
- ---------------------------------------------------------------------
resell your shares.
- -------------------
It is likely that our common stock will be subject to the regulations
on penny stocks; consequently, the market liquidity for our common
stock may be adversely affected by regulations limiting our ability or
that of any broker/dealers we may in the future ultimately engage to
sell our common stock. Additionally, these regulations sometimes
depress stock prices. This, in turn, may affect your ability to resell
those shares in the public market following termination of the Rule 419
escrow.
We have arbitrarily determined the offering price of the shares.
- ----------------------------------------------------------------
We have arbitrarily determined the offering price of $0.05 per share.
This price bears no relation to our assets, book value, or any other
customary investment criteria, including our prior operating history.
Among factors we considered in determining the offering price were:
Our limited financial resources;
The amount of equity desired to be retained by present
shareholders;
The amount of dilution to the public; and
The general condition of the securities markets.
In net, it is entirely possible that the facts and circumstances
surrounding Eagle have been interpreted incorrectly and that the price
has been set too high.
We face many competing companies with more experience and resources
- -------------------------------------------------------------------
than we.
- --------
In relation to our competitors, we are and will continue to be an
insignificant participant in the business of seeking business
combinations. A large number of established and well-financed
entities, including venture capital firms, have recently increased
their merger and acquisition activities. Most of these entities have
significantly greater financial resources, technical expertise and
managerial capabilities than we and, consequently, we will be at a
competitive disadvantage in identifying suitable merger or acquisition
candidates and successfully consummating a proposed merger or
acquisition. Also, we will be competing with a large number of other
small blank check companies.
Possible tax consequences to our activities may adversely affect our
- --------------------------------------------------------------------
investors or us.
- ----------------
In the course of any acquisition or merger we may undertake, a
substantial amount of attention will be focused upon federal and state
tax consequences both to the acquisition candidate and us. Presently,
under the provisions of federal and various state tax laws, a qualified
reorganization between business entities will generally result in tax-
free treatment to the parties to the reorganization. While we expect
to undertake any merger or acquisition so as to minimize federal and
state tax consequences both to the acquisition candidate, and us such
business combination might not meet the statutory requirements of a
reorganization, or the parties might not obtain the intended tax-free
treatment upon a transfer of stock or
/17/
assets. A non-qualifying reorganization could result in the imposition
of both federal and state taxes that may have a substantial adverse effect
on us.
FORWARD-LOOKING STATEMENTS
----------------------------
This prospectus contains forward-looking statements. We intend to
identify forward-looking statements in this prospectus using words such
as believes, intends, expects, may, will, should, plan, projected,
contemplates, anticipates, or similar statements. These statements are
based on our beliefs as well as assumptions we made using information
currently available to us. Because these statements reflect our
current views concerning future events, these statements involve risks,
uncertainties and assumptions. Actual future results may differ
significantly from the results discussed in the forward-looking
statements. Some, but not all, of the factors that may cause these
differences include those discussed in the Risk Factors section. You
should not place undue reliance on these forward-looking statements,
which apply only as of the date of this prospectus.
YOUR RIGHTS UNDER RULE 419
----------------------------
It is important that you know that we have had absolutely no
preliminary contact or discussion with any representatives of any
business regarding the possibility or potential for any acquisition or
merger. This offering is being conducted according to Rule 419. You
have certain rights and will receive the substantive protection
provided by this Rule. To that end, the securities purchased by you
and other investors and the funds received in the offering will be
deposited and held in the escrow account until an acquisition meeting
specific criteria is completed. The escrow account is non-interest
bearing and the funds deposited in it are held for the named
purchasers.
You should be aware as well of certain trading restrictions on
securities held in escrow accounts subject to Rule 419. According to
Rule 15g-8 of the Exchange Act, it is unlawful for any person to sell
or offer to sell any security that is deposited and held in an escrow
or trust account pursuant to Rule 419 under the Securities Act of 1933,
or any interest in or related to such security, other than pursuant to
a qualified domestic relations order as defined by the Internal Revenue
Code of 1986, as amended, or Title I of the Employee Retirement Income
Security Act, or the rules thereunder.
Acquisition criteria
- ---------------------
Rule 419 requires that, before the funds and the securities can be
released, we must first execute an agreement to acquire a candidate
meeting certain specified criteria. The agreement must provide for the
acquisition of a business or assets for which the fair value of the
business represents at least 80% of the offering proceeds. For
purposes of the offering, the fair value of the business or assets to
be acquired must be at least 80% of $150,000, that is $120,000, if the
maximum amount is raised; and 80% of $25,000, or $20,000, if the
minimum amount is raised.
The agreement must also include, as a precondition to its closing, a
requirement that the number of investors representing 80% of the
offering proceeds must elect to reconfirm their investment.
We will not acquire or merge with any business or company to which our
officer/director or any associated person has any relationship. Any
merger or acquisition will be strictly at arm's length. While we do not
anticipate seeking an independent appraisal of any proposed merger or
acquisition, we do intend to fully disclose the nature and terms of any
business combination in a post-effective amendment.
/18/
Post-effective amendment
- ------------------------
Once the agreement governing the acquisition of a business meeting the
required criteria has been executed, Rule 419 requires us to update the
registration statement with a post-effective amendment. The post-
effective amendment must contain information about the proposed
acquisition candidate and its business, including audited financial
statements, the results of this offering, and the use of the funds
disbursed from the escrow account. The post-effective amendment must
also include the terms of the reconfirmation offer mandated by Rule
419. The reconfirmation offer must include certain prescribed
conditions that must be satisfied before the funds and securities can
be released from escrow. (See the next section, "Reconfirmation of
offering," for a detailed listing of those conditions.)
Reconfirmation of offering
- --------------------------
The reconfirmation offer must commence after the effective date of the
post- effective amendment. Under Rule 419, the terms of the
reconfirmation offer must include the following conditions:
The prospectus contained in the post-effective amendment will be
sent to each investor whose securities are held in the escrow account
within 5 business days after the effective date of the post-effective
amendment.
Each investor will have no fewer than 20 and no more than 45
business days from the effective date of the post-effective amendment
to notify us in writing that the investor elects to remain an investor.
If you do not receive written notification or if you receive
notification that an investor has decided not to reconfirm an
investment within 45 business days following the effective date, the
proportionate portion of the funds, less the cost of this Offering,
which is estimated to be $2,500, held in the escrow account on your
behalf will be returned to you within 5 business days by first class
mail or other equally prompt means.
As previously stated, the acquisition will be closed only if
investors representing 80% of the total proceeds from the offering
elect to reconfirm their investment, that is, if the maximum number of
shares have been sold, proceeds equaling $120,000, and if the minimum,
$20,000.
If a closed acquisition has not occurred by August, 2003, 365 days
from the date of this prospectus, the funds held in the escrow account
shall be returned to all investors on a proportionate or pro-rata basis
within 5 business days by first class mail or other equally prompt
means.
Release of securities and funds
- --------------------------------
The funds will be released to us, and the securities will be released
to you, only after the escrow agent has received a signed
representation from us and any other evidence acceptable by the escrow
agent that:
We have executed an agreement for the acquisition of an
acquisition candidate;
The fair market value of the business to be acquired represents at
least 80% of the minimum offering proceeds;
/19/
We have filed the required post-effective amendment;
The post-effective amendment has been declared effective;
We have satisfied all of the prescribed conditions of the
reconfirmation offer; and
The transaction to acquire the business has closed.
[Balance intentionally left blank.]
/20/
DILUTION
The dilution to investors in this offering is constituted by the
difference between the public offering price per share and the pro
forma net tangible book value per share, of common stock of Eagle Golf
Corp., after this offering.
Net tangible book value per share is determined by dividing the net
tangible book value of the company by the number of outstanding shares
of common stock. The net tangible book value of the company is equal
to the total tangible assets less the total liabilities.
Dilution arises mainly from the arbitrary decision by us as to the
offering price per share. Dilution of the value of the shares purchased
by the public in this offering will also be due, in part, to the lower
book value of the shares presently outstanding, and in part, to
expenses incurred in connection with the public offering.
Net tangible book value is equal to the net tangible assets of the
company. The net tangible assets of the company are equal to the total
assets less the total liabilities and intangible assets. (See
"Financial Statements.")
As of June 30, 2002, Eagle had unaudited net tangible book value of
$4,444. The net tangible book value is equal to the total tangible
assets less the total liabilities. The net tangible book value per
share of common stock is $0.001. (See "Certain Transactions.")
The information below sets forth the dilution to persons purchasing
shares in this offering without taking into account any changes in the
net tangible book value of Eagle after June 30, 2002, except the
sale of the minimum and maximum number of shares offered at the public
offering price and receipt of the net proceeds from that sale.
Dilution Table Minimum Maximum
Public Offering Price $ 0.050 $ 0.050
Net Tangible Book Value Per Share Before Offering $ 0.001 $ 0.001
Net Tangible Book Value Per Share After Offering $ 0.007 $ 0.024
Increase Per Share Attributable to Payment
by Public Investors $ 0.006 $ 0.023
Dilution Per Share to Public Investors
Percentage 86.00% 52.00%
There are no warrants, options, rights or convertible securities
currently outstanding.
/21/
USE OF PROCEEDS
-----------------
The gross proceeds of this offering if the maximum shares are sold,
will be $150,000 and if the minimum shares are sold, the gross proceeds
of this offering will be $25,000. While Rule 419, prior to the
reconfirmation of the offering permits 10% of the funds ($15,000 and
$2,500, respectively) remaining after payment of underwriting fees and
expenses and dealer compensation to be released from escrow to us, we
do not intend to request release of these funds. This offering is
contingent on the entire offering being sold and will be sold on a
first come, first served basis. If subscriptions exceed the amount
being offered, these excess subscriptions will be promptly refunded
without deductions for commissions or expenses. Accordingly, we will
receive these funds in the event a business combination is closed in
accordance with Rule 419.
Under Rule 419, after the reconfirmation offering and the closing of
the business combination, and assuming the successful completion of
this offering, $150,000, plus any dividends received but less any
amount returned to investors who did not reconfirm their investment
under Rule 419, will be released to us. For the minimum, that amount
will be $25,000 less the $2,500 for the offering preparation expenses.
This refund to investors would also take place if the minimum number of
shares is not obtained, if an acquisition is not consummated within 365
days, or if a substantial number of investors do not reconfirm their
investments.
We estimate the cost of finding and consummating a business combination
could run as much as $20,000. As we have not started the process of
investigating potential acquisition candidates, it is difficult to
determine the percent of proceeds to be used for this purpose.
We have considerable discretion over how to use a significant portion
of the net proceeds of this offering. We cannot assure investors that
our use of the net proceeds will not vary substantially due to
unforeseen factors. The proceeds if and when made available to use
will be used to pay the following expenses in the order stated:
Use of Proceeds Min. Use Allocation Max. Use Allocation
---------------- -------------------- ---------------------
Offering Expenses1 $2,500 $2,500
Escrow Account2 $22,500 $147,500
------- --------
Total Proceeds $25,000 $150,000
======= ========
(1) Offering costs include filing, printing, legal, accounting,
transfer agent and escrow agent fees.
(2) The proceeds received in this offering will be put into the escrow
account pending closing of a business combination and reconfirmation.
(See Exhibit 2.1 Escrow Agreement.)
Upon the consummation of a business combination and the reconfirmation
of the investors' purchase of the shares, the balance of the deposited
funds will be released to use. They may be used to offset the expenses
of consummating a business combination, including legal fees for the
preparation and filing of a post-effective amendment to the
registration statement.
No portion of the proceeds of the offering will be paid to our
officer/director or his affiliates or associates. Expenses will be
paid from our working capital.
/22/
Working capital is expected to include incidental expenses related to
the marketing of our Company as a vehicle for a merger candidate
seeking to become fully reporting, as well as for incidental
operational expenses including basic office supplies. To the extent
that these funds are not used, they will be deposited in an interest-
bearing money market account that will be available to the merger
candidate upon consummation of a merger or acquisition.
If this capital is insufficient, the Company may seek to obtain
additional financing through offerings of equity and/or debt
securities. It is unlikely that we will seek loan financing as the
costs of our operations are negligible and we do not expect to incur
any significant additional costs. However, if we are able to raise
only the minimum amount of $25,000, and no additional funds are
secured, then we face the risk that our company might be under-funded,
placing all investments substantially at risk. Under those
circumstances, we might attempt to borrow funds. Any loan we undertook
would be repaid in lump sum from the proceeds we expect to derive from
the sale of the company to a merger candidate upon receipt of final
payment.
Other Arrangements
- -------------------
Eagle has no agreement or understanding, express or implied, with its
officer/director or any of his affiliates or associates regarding
employment with the Company or compensation for services. It has no
plan, agreement, or understanding, express or implied, with his, or any
affiliates regarding the issuing of any shares of authorized and
unissued common stock.
The existing officer/director does reserve the right to acquire shares
in this offering. There is no understanding, however, between him and
Eagle regarding the sale of all or a portion of the common stock he
currently holds in connection with any future participation by Eagle in
a business, or any other plans, understandings, or arrangements by
which he or his affiliates would receive funds, stock, or other assets
in such a connection. Nor have any advances have been made or
contemplated by Eagle to Mr. Bothmann or anyone connected to him.
Except for reimbursement of offering costs and expenses he may have
incurred on Eagle's behalf, no portion of the net proceeds of the
offering may be paid to our officer/director or any of his associates
directly or indirectly, as consultant fees, officer salaries, director
fees, purchase of their shares, or other payments. No portion of the
net proceeds will be used to make loans to any person. We will not
borrow funds and use the proceeds acquired from the lender to make
payments to its officer/director or any of her associates.
Eagle has no agreement or understanding with any consultant or advisor
to provide services in connection with any future business acquisition.
Though no concrete plans to do so are currently in place, the
possibility exists that management may find it to be in the Company's
best interests to retain the services of such a consultant.
Under no circumstances will Eagle retain the services of its own
officer/director or one of his affiliates or associates as a
consultant. Compensation to a consultant may take various forms,
including one-time cash payments, payments based on a percentage of
revenues or product sales volume, payments involving issuance of
securities (including those of Eagle) or any combination of these or
other compensation arrangements.
We estimate that any fees for consultant services paid in cash will not
exceed 10% of the amount of the securities it issues to acquire a
business. We will not have funds to pay a retainer in connection with
any consulting arrangement, and no fee will be paid unless and until an
acquisition is completed in accordance with Rule 419.
/23/
The following tables set forth the percentage of equity to be purchased
by public investors in the offering compared to the percentage equity
to be owned by the present stockholder, and the comparative amounts
paid for the shares by the public investors as compared to the total
consideration paid by the present stockholder of Eagle Golf Corp.
Assuming the Minimum Number of Shares Sold
--------------------------------------------
Approx Approx
Percentage Percentage
Shares of Total of Total
Purchased Shares Total Dollars Dollars
----------- ----------- --------------- -----------
Public
Stockholders 500,000 12.0% 25,000 88.0%
Present
Stockholder 3,500,000 88.0% 3,500 12.0%
----------- ------- --------- -------
Totals 4,000,000 100.0% 28,500 100.0%
Assuming the Maximum Number of Shares Sold
--------------------------------------------
Public
Stockholders 3,000,000 46.0% 150,000 98.0%
Present
Stockholder 2,000,000 54.0% 3,500 2.0%
----------- -------- --------- -------
Totals 5,000,000 100.0% 153,500 100.0%
[Balance of this page intentionally left blank.]
/24/
CAPITALIZATION
The following table sets forth our capitalization as of December 31,
2001, and pro-forma as adjusted to reflect a minimum and maximum
offering.
Pro-Forma2 Pro-Forma3
Actual1 Minimum Offering Maximum Offering
Short-Term Debt $ 0 $ 0 $ 0
Long-Term Debt $ 0 $ 0 $ 0
(Excluding short-term
portion)
Total Debt $ 0 $ 0 $ 0
Stockholders' Equity
Common Stock $ 3,500 $ 4,000 $ 6,500
Excess Paid-In-Capital $ 15,606 $ 40,606 $ 165,606
Deferred Offering Costs $ 0 $ (2,500) $ (2,500)
Accumulated Deficit $ (14,656) $ (14,656) $ (14,656)
Total Stockholders'
Equity/Deficit $ 4,444 $ 25,556 $ 145,556
Total Capitalization $ 4,444 $ 25,556 $ 145,556
NOTES TO CAPITALIZATION:
1 See "Part F/S: Eagle Golf Corp., Financial Statements."
2 The pro-forma minimum offering estimates assumes the minimum
subscription of 500,000 shares of common stock.
3 The pro-forma maximum offering estimates assumes the subscription
of the entire 3,000,000 shares of common stock.
[Balance of this page intentionally left blank.]
/25/
PLAN OF DISTRIBUTION
----------------------
General
We are offering a minimum of 500,000 and a maximum of 3,000,000 shares
at the purchase price of $0.05 per share on a direct participation
basis. If the minimum number of shares is not sold during the offering
period, the proceeds received will be returned to investors within a
period of ten days. This offering will expire 365 days from the date
of this prospectus. The offering will not be extended. The Company
may allocate among or reject any offers to purchase, in whole or in
part. Moreover, our officer/director may purchase shares on the same
terms, though not with an intention to resell such shares shortly
thereafter, as shares owned by our officer would be restricted.
The shares will be offered and sold only to residents in the state of
Nevada. (For details, see "Special State Law Considerations," below,
especially as to limitations this places on resale or transfer of
shares.) Our executive officer, Hans Bothmann, will sell all shares in
this offering. He will receive no compensation or commissions with
respect to them.
The proceeds received under this offering will be deposited in a non-
interest bearing escrow account with LaSalle Bank National Banking
Association, whose address is 135 South LaSalle Street, Suite 1960,
Chicago, Illinois 60603 (escrow agent). The escrow agreement is a
standard escrow agreement under the Rule 419. It states that all
checks must be made out to the escrow company or they will be returned,
sets up the terms and conditions of the account, and arranges the terms
by which funds will be disbursed if necessary within ten days of the
end of the offering period if the minimum has not been met. Though we
could request 10% of these funds under Rule 419 prior to the
reconfirmation, we do not intend to do so. Five Hundred ($500) Dollars
has been paid to LaSalle Bank National Banking Association to set up
the non-interest-bearing account.
Shares will be sold in reliance upon the safe harbor provisions of Rule
3a4(1) of the Securities Exchange Act of 1934. Eagle has an
underwriting agreement with NevWest Securities Corporation to
underwrite this offering.
This offering is intended to be made solely by the delivery of this
prospectus and the accompanying subscription application to prospective
investors. Eagle's officer/director will not participate in the making
of this offering other than by the delivery of this prospectus or by
responding to inquiries by prospective purchasers. His responses will
be limited to the information contained in the Registration Statement
of which this prospectus is a part. Mr. Bothmann is not registered as
a broker-dealer, nor is he an associated person of any other brokers or
dealers.
The Company will pay its own legal and accounting fees and other
expenses incurred in connection with the offering. If the Company is
required to return funds to potential investors, the company will be
unable to return up to $2,500 in funds, as these funds will be used for
the offering expenses.
Though no plans to do so are in effect, we reserve the right to use
broker-dealer(s) in the sale of these securities. We will amend the
registration statement via post-effective amendment if in fact we do
require the services of a broker-dealer(s) if or when the broker-dealer
sells a portion of the offering. Prior to the involvement of the
broker-dealer, we would secure a no objection position from the NASD.
Stock certificates will not be issued until the escrow agent releases
funds from the reconfirmed investments to us from the escrow account.
Until stock certificates are issued to the subscribers, the subscribers
will not be considered shareholders of the Company.
Subscribers will have no right to a return of their subscription
payments held in the escrow account until the Company decides not to
accept such subscription payment.
/26/
PROPOSED BUSINESS
-------------------
History and Organization
- -------------------------
We are a Nevada corporation incorporated on February 20, 1996 for the
purpose of acquiring or merging with an unspecified operating business.
We are a blank check company as defined in Rule 419. Eagle Golf Corp.
was organized for the purpose of seeking, investigating, and ultimately
acquiring an interest in a business with long-term growth potential.
Persons should not purchase shares in the offering if they expect short-
term earnings or appreciation in the value of our Company. It is
emphasized that the business objectives discussed here are extremely
general and are not intended to be restrictive on the discretion of the
management of Eagle.
Persons purchasing shares in the offering will be entrusting their
funds to Eagle's management, subject to the requirements of Rule 419.
The net proceeds of the offering are not specifically allocated to
identified purposes or allocated to the acquisition of any specific
type of business venture. Decisions concerning these matters may be
made by management without shareholder action, except for the right of
each investor to recover his pro rata portion of the deposited funds in
accordance with Rule 419. (See "Use Of Proceeds").
Management anticipates that it may be able to participate in only one
potential business venture, due primarily to our limited financing.
Selection of a Business
- ------------------------
We anticipate that businesses for possible acquisition will be referred
by various sources, including our officer/director, professional
advisors, securities broker-dealers, venture capitalists, members of
the financial community, and others who may present unsolicited
proposals. We will seek businesses from all known sources, but will
rely principally on personal contacts of the officer/director and his
affiliates, as well as indirect associations between him and other
business and professional people. While it is not presently
anticipated that we will engage unaffiliated professional firms
specializing in business acquisitions or reorganizations, such firms
may be retained if management deems it in our best interest. (See
"Other Arrangements" under "Use Of Proceeds," above.)
Process of Selection
- ---------------------
We will not restrict our search to any particular business, industry,
or geographical location, and we reserve the right to evaluate and
enter into any type of business in any location. We may participate in
a newly organized business venture. On the other hand, we may select a
more established company entering a new phase of growth or in need of
additional capital to overcome existing financial problems.
In seeking a business venture, the decision of management will not be
controlled by an attempt to take advantage of any anticipated or
perceived appeal of a specific industry, management group, product, or
industry, but will be based on the business objective of seeking long-
term capital appreciation in the real value of Eagle. We will not
acquire or merge with a business or corporation in which our
officer/director or any of his associates has any direct or indirect
ownership interest.
/27/
Factors To Be Considered in the Selection Process
- --------------------------------------------------
The analysis of new businesses will be undertaken by or under the
supervision of our officer/director. In analyzing prospective
businesses, he will consider, to the extent applicable, the available
technical, financial, and managerial resources, working capital and
other prospects for the future, the nature of present and expected
competition; the quality and experience of management services which
may be available and the depth of that management; the potential for
further research, development, or exploration; the potential for growth
and expansion; the potential for profit; the perceived public
recognition or acceptance of products, services, or trade or service
marks; name identification; and other relevant factors.
The decision to participate in a specific business may be based on
management's analysis of the quality of the other firm's management and
personnel, the anticipated acceptability of new products or marketing
concepts, the merit of technological changes, and other factors which
are difficult, if not impossible, to analyze through any objective
criteria. It is anticipated that the results of operations of a
specific firm may not necessarily be indicative of the potential for
the future because of the requirement to substantially shift marketing
approaches, expand significantly, change product emphasis, change or
substantially augment management, and other factors.
Time Frame of the Selection Process
- ------------------------------------
The period within which we may participate in a business on completion
of this offering cannot be predicted and will depend on circumstances
beyond our control, including the availability of businesses, the time
required to complete our investigation and analysis of prospective
businesses, the time required to prepare appropriate documents and
agreements providing for our participation, and other circumstances.
It is anticipated that the analysis of specific proposals and the
selection of a business will take several months. Even after we have
located a prospective acquisition target, it will still have to comply
with the reconfirmation mandate of Rule 419, which may take months.
Persons should not purchase shares in this offering if they expect a
short-term appreciation in the value of Eagle or its securities.
Other Ramifications of Rule 419 on the Selection Process
- ---------------------------------------------------------
It is possible that we may propose to acquire a business in the
development stage. A business is in the development stage if it is
devoting most of its efforts to establishing a new business, and
planned principal operations have either not commenced or not yet
resulted in significant revenues. Under Rule 419, we must acquire a
business or assets for which the fair value of the business represents
at least 80% of the offering proceeds. Accordingly, our ability to
acquire a business in the development stage may be limited to the
extent it cannot locate such businesses with fair value high enough to
satisfy the requirements of Rule 419.
We will be subject to requirements of Rule 419 and certain reporting
requirements under the Exchange Act and will, therefore, upon
effectiveness, be required to furnish audited financial statements for
the company(s) acquired, covering one, two, or three years, depending
on the relative size of the acquisition. Consequently, acquisition
prospects that do not have or are unable to obtain the audited
statements to meet these requirements will not be appropriate for
acquisition. We anticipate that we will voluntarily prepare and file
periodic reports under the Exchange Act, notwithstanding the fact that
that obligation may be suspended under sections 15(d) of the Exchange
Act.
/28/
Acquisition of a Business
- --------------------------
In implementing a structure for a particular business acquisition, we
may become a party to a merger, consolidation, or other reorganization
with another corporation or entity; joint venture; license; purchase
and sale of assets; or purchase and sale of stock, the exact nature of
which cannot now be predicted. Notwithstanding the above, we do not
intend to participate in a business through the purchase of minority
stock positions. On the consummation of a transaction, it is likely
that our present management and shareholder will not be in control of
the Company. In addition, a majority or all our directors may, as part
of the terms of the acquisition transaction, resign and be replaced by
new directors without vote of our shareholders.
The possible ramifications of transactions like those mentioned here
could significantly effect investments. (See "RISK FACTORS" in
connection with these and other possible effects).
In connection with our acquisition of a business, for example, our
present shareholder, officer/director may, as a negotiated element of
the acquisition, sell all or a portion of the common stock he holds at
a significant premium over his original investment in us. As a result
of such sales, affiliates of the entity participating in the business
reorganization with us would acquire a higher percentage of equity
ownership in it.
Although our present shareholder did not acquire his shares of common
stock with a view toward any subsequent sale in connection with
business reorganization, it is not unusual for affiliates of the entity
participating in the reorganization to negotiate to purchase shares
held by the present shareholders. This reduces the number of
restricted securities held by persons no longer affiliated with the
company. This in turn reduces the adverse impact that might be exerted
on the public market in the company's common stock as a result of
substantial sales of those shares once the restrictions no longer
apply.
Public investors will not receive any portion of the premium that may
be paid in those circumstances. Furthermore, our shareholders may not
be afforded an opportunity to approve or consent to any particular
stock buy-out transaction.
While the actual terms of a transaction to which we may be a party
cannot be predicted, it may be expected that the parties to the
business transaction will find it desirable to structure the
acquisition as a so-called tax-free event under sections 351 or 368(a)
of the Internal Revenue Code of 1986. In order to obtain tax-free
treatment under section 351 of the Code, it would be necessary for the
owners of the acquired business to own 80% or more of the stock of the
surviving entity. In that case, Eagle's shareholders, including
investors in this offering, would retain less than 20% of the issued
and outstanding shares of the surviving entity. Section 368(a)(1) of
the Code provides for tax-free treatment of certain business
reorganization between corporate entities where one corporation is
merged with or acquires the securities or assets of another.
Generally, we will be the acquiring corporation in such business
reorganization, and the tax-free status of the transaction will not
depend on the issuing of any specific amount of stock of the surviving
entity. Consequently, there is a substantial possibility that the
shareholders of Eagle, immediately prior to the transaction, would
retain less than 50% of the issued and outstanding shares of the
surviving entity. Therefore, regardless of the form of the business
acquisition, it may be anticipated that the investors in this offering
will experience a significant reduction in their percentage of
ownership in the company.
/29/
Notwithstanding the fact that we are technically the acquiring entity
in these circumstances, generally accepted accounting principles would
ordinarily require that such a transaction be accounted for as if the
Company had been acquired by the other entity owning the business and,
therefore, will not permit a write-up in the carrying value of the
assets of the other company.
The manner in which we participate in a business will depend on the
nature of the business, our needs and desires and those of the other
parties involved in the negotiations, the management of the business,
and the relative negotiating strengths of Eagle and the other
management team. We will participate in a business only after the
negotiation and execution of appropriate written agreements. Although
the exact terms of these agreements cannot be predicted, generally they
will:
Require specific representations and warranties by all of the
parties involved;
Specify certain events of default;
Detail the terms of closing and the conditions which must be
satisfied by each of the parties;
Outline the manner of bearing costs if the transaction is not
closed, set forth remedies on default; and
Include miscellaneous other terms.
One of the conditions will most likely be compliance with Rule 419, and
reconfirmation by investors representing at least 80% of the gross
proceeds of the offering. As of the date of the amended filing, no
probable acquisition candidates have been identified.
Evaluation Criteria
- --------------------
Despite his non-experience as a professional business analyst, our
officer/director, Hans Bothmann, will carefully examine businesses for
acquisition.
Management anticipates the selection of an acquired business will be
complex and risky because of the competition for such business
opportunities among all segments of the financial community. The
nature of our search for the acquisition of a business requires maximum
flexibility since we will be required to consider various factors and
divergent circumstances which may preclude meaningful direct comparison
among the various business enterprises, product or services
investigated. We will have virtually unrestricted flexibility in
identifying and selecting a prospective acquired business. Besides
determining its fair market value, management will consider the
following:
The acquired business' net worth;
The acquired business' total assets;
The acquired business' cash flow;
Costs associated with effecting the business combination;
Equity interest and possible management participation in the
acquired business;
Earnings and financial condition of the acquired business;
Growth potential of the acquired business and the industry in
which it operates;
Experience and skill of management and availability of additional
personnel of the acquired business;
Capital requirements of the acquired business;
Competitive position of the acquired business;
Stage development of the product, process or service of the
acquired business;
Degree of current or potential market acceptance of the product,
process or service of the acquired business; and
Regulatory environment of the industry in which the acquired
business operates.
/30/
These criteria are not intended to be exhaustive. As Mr. Bothmann
searches through the candidates for acquisition, other factors he
considers relevant may apply.
Although we believe that locating and investigating specific business
proposals will take several months, the exact duration of the process
is difficult to predict. However, we cannot exceed the 365-day time
schedule set forth in Rule 419. The time and costs required to select
and evaluate an acquired business candidate, including conducting a due
diligence review, and to structure and consummate the business
combination, including negotiating relevant agreements and preparing
requisite documents for filing in keeping with applicable securities
laws and state corporate laws, cannot presently be stated with
certainty. (See "Investors' Rights and Substantive Protection Under
Rule 419.")
Leverage
- ---------
We may be able to participate in a business involving the use of
leverage. Leveraging a transaction involves the acquisition of a
business through incurring indebtedness for a portion of the purchase
price of that business, which is secured by the assets of the business
acquired.
One method by which leverage may be used is to locate an operating
business available for sale and arrange for the financing necessary to
purchase it. Acquisition of a business in this fashion would enable us
to participate in a larger venture than our limited funds would
otherwise permit, or use less of our funds to acquire a business and
thus commit our remaining funds to the operations of the business
acquired. (See "A leveraged buy-out could expose us to a high risk of
business failure." under Risk Factors.)
The likelihood that we could obtain a conventional bank loan for a
leveraged transaction would depend largely on the business being
acquired and its perceived ability to generate sufficient revenues to
repay the debt. Generally, businesses suitable for leveraging are
limited to those with income-producing assets that are either in
operation or can be placed in operation relatively quickly. We cannot
predict whether it will be able to locate any such business. As a
general matter it may be expected that Eagle will have few, if any,
opportunities to examine businesses where leveraging would be
appropriate, or to acquire financing with acceptable terms.
Tax Considerations
- -------------------
As a general rule, Federal and state tax laws and regulations have a
significant impact upon the structuring of business combinations. We
will evaluate the possible tax consequences of any prospective business
combination and will endeavor to structure the business combination so
as to achieve the most favorable tax treatment to the acquired
business, our respective stockholders, and us. The IRS or other
appropriate state tax authorities may, however, attempt to re-
characterize the tax treatment of a particular business combination.
(See "There may be tax consequences to our activities which may
adversely effect the company or our investors," under Risk Factors).
Form and Structure of Acquisition
- ----------------------------------
Of the various methods and forms by which we may structure a
transaction to acquire another business, management is likely to use,
without limitation, one of the following forms: (1) a leveraged buyout
transaction in which most of the purchase price is provided by
borrowings from one or more lenders or from the sellers in the form of
a deferred purchase price; (2) a merger or consolidation of the
acquired corporation into or with the company; (3) a merger or
consolidation of the acquired business corporation
/31/
into or with a subsidiary of the company organized to facilitate the
acquisition (a subsidiary merger), or a merger or consolidation of such
a subsidiary into or with the acquired corporation (a reverse subsidiary
merger); (4) an acquisition of all or a controlling amount of the stock
of the acquired corporation followed by a merger of the acquired business
into us; (5) an acquisition of the assets of a business by us or a
subsidiary organized for such a purpose; (6) a merger or consolidation
of the company with or into the acquired business or such a subsidiary;
or (7) a combination of any of the above.
The actual form and structure for a business combination may also be
dependent upon numerous other factors pertaining to the acquired
business and its stockholders, as well as potential tax accounting
treatments afforded the business combination.
As part of an acquisition, we may choose to issue additional securities
that could add numerous complications depending on whether or not these
would need to be registered. Dilution, change of management,
additional costs, time delays or depressed prices for our stock could
result, discussions of which are included in the Risk Factors section
of this prospectus.
We are endeavoring to conduct our operations so as not to require
registration under the Investment Company Act of 1940.
Daily Operations
- -----------------
We expect to use attorneys and accountants as necessary, and do not
anticipate a need to engage any full-time employees during the phase
devoted to seeking and evaluating business opportunities. The need for
employees and their availability will be addressed along with the
decisions specific to acquiring or participating in a specific business
opportunity. We have allocated a portion of the offering proceeds for
general overhead. Although there is no current plan to hire employees
on a full-time or part-time basis, some portion of working capital may
be used to pay any part-time employees hired.
Until an active business is commenced or acquired, we will have no
employees or day-to-day operations. We are unable to make any estimate
as to the future number of employees, which may be necessary. If an
existing business is acquired it is possible that we would hire its
existing staff.
Competition
- ------------
We will be involved in intense competition with other business
entities, many of which will have a competitive edge over us by virtue
of their more substantial financial resources and prior experience in
business. We face as well numerous other smaller blank check companies
at the same stage of development as we are. (See "Competition", in
Risk Factors).
Offices
- --------
Our offices are located at 7601 West Laredo Street, Las Vegas, NV
89117. According to an oral agreement, which may be terminated by
either party on 30 days prior written notice, we will use these offices
on a rent-free basis until we consummate a business combination or the
Rule 419 Escrow is otherwise terminated. We are a Blank Check Company
and currently have no employees other than our officer and director.
/32/
PLAN OF OPERATION
-------------------
We are a Blank Check Company, and have neither engaged in any
operations nor generated any revenues to date. As of June 30,
2002, we have no significant expenses, with the exception of
incorporation fees, accounting fees, SEC filing fees, and escrow
establishment fees.
Virtually all of the expenses that will be funded from the money in our
treasury or, if additional funds are required, that may be funded by
management will derive from our efforts to identify a suitable
acquisition candidate and close the acquisition. Management may agree
to fund our cash requirements until an acquisition is closed. So long
as management does so, we will have sufficient funds to satisfy our
cash requirements and do not expect to have to raise additional funds
during the entire Rule 419 escrow period of up to 365 days from the
date of this prospectus. This is primarily because we do not
anticipate incurring any significant expenditures. Before the
conclusion of this offering, we anticipate our expenses to be limited
to accounting fees, legal fees, telephone, mailing, filing fees, and
transfer agent fees.
We may seek additional financing. At this time, however, we believe
that the funds to be provided by management will be sufficient for
funding our operations until we find an acquisition and therefore do
not expect to issue any additional securities before the closing of a
business combination.
[Balance of this page intentionally left blank.]
/33/
DESCRIPTION OF CAPITAL STOCK
------------------------------
Authorized Capital Stock Under Our Shares of Capital Stock Outstanding
Articles of Incorporation After Offering
20,000,000 shares of common stock 6,500,000 shares of common stock
Assuming successful completion of
maximum offering
4,000,000 shares of common stock
Assuming successful completion of
minimum offering
All significant provisions of our capital stock are summarized in this
prospectus. You should note that applicable Nevada law and our
articles of incorporation and bylaws govern the following description.
We have filed copies of these documents as exhibits to the registration
statement related to this prospectus. If you wish to obtain more
detailed information regarding this topic, please refer to the Index
for Part II on page 54 for a complete list of these exhibits.
Authorized Stock
EAGLE GOLF CORP is authorized to issue 20,000,000 shares of Common
Stock, par value $0.001 per share, of which 3,500,000 shares are issued
and outstanding, and 5,000,000 shares of preferred stock, par value
$0.001 (the Preferred Stock), of which no shares have been issued.
Common Stock
- -------------
Holders of common stock are entitled to one vote per share on each
matter submitted to a vote at any meeting of shareholders. Shares of
common stock do not carry cumulative voting rights; and, therefore,
holders of a majority of the outstanding shares of common stock will be
able to elect the entire board of directors, and, if they do so,
minority shareholders would not be able to elect any members to the
board of directors. Our board of directors has authority, without
action by our shareholders, to issue all or any portion of the
authorized but unissued shares of common stock, which would reduce the
percentage ownership in the company of its shareholders and which may
dilute the book value of the common stock.
Our shareholders have no pre-emptive rights to acquire additional
shares of common stock. The common stock is not subject to redemption
and carries no subscription or conversion rights. In the event of our
liquidation, the holders of shares of common stock are entitled to
share equally in corporate assets after satisfaction of all
liabilities. The shares of common stock, when issued, will be fully
paid and non- assessable.
Holders of common stock are entitled to receive such dividends, as the
board of directors may from time to time declare out of funds legally
available for the payment of dividends.
NOTE: We have not paid dividends on our common stock and do not
anticipate that we will pay dividends anytime soon. This caution is
repeated: You should not expect to receive any dividends on shares in
the near future, even after a merger. This investment is inappropriate
for you if you need dividend income from an investment in shares.
/34/
Preferred Stock
- ---------------
Our board of directors, without your approval, is authorized to issue
preferred stock. They can issue different classes of preferred stock,
with some or all of the following rights or any other legal rights they
think are appropriate, such as:
Voting;
Dividends;
Required or optional repurchase by us;
Conversion into common stock, with or without additional payment;
and
Payments preferred stockholders will receive before common
stockholders if we go out of business.
The issuance of preferred stock could provide us with flexibility for
possible acquisitions and other corporate purposes, but it also could
render your vote meaningless because preferred stockholders could own
shares with a majority of the votes required on any issue. Because we
issue preferred stock, someone interested in buying our Company may not
follow through with their plans because they could find it more
difficult to acquire, or be discouraged from acquiring, a majority of
our outstanding stock.
Warrants
- ---------
The Company has no warrants.
Transfer Agent
- ---------------
Upon the closing of this offering, the transfer agent for Eagle Golf
Corp. securities will be Shelley Godfrey, Pacific Stock Transfer
Company, 500 E. Warm Springs Road, Suite 240, Las Vegas, Nevada 89119,
(702) 361-3033.
Reports to Stockholders
- ------------------------
The Company intends to furnish its stockholders with annual reports
containing audited financial statements as soon as practicable after
the end of each fiscal year. The Company's fiscal year ends on
December 31. In addition, we intend to issue unaudited reviewed
interim reports and financial statements on a quarterly basis.
SHARES ELIGIBLE FOR FUTURE SALE
---------------------------------
Of the shares outstanding after the offering, the 3,000,000 shares sold
in this offering will have been registered with the SEC and can be
freely resold, except if they are acquired by our officer/director or
other persons or entities that he controls or that control him.
Generally, Rule 144 provides that directors, executive officers, and
persons or entities that they control or who control them may sell
shares of common stock in any three-month period in a limited amount.
However, the SEC has taken the position that resales cannot be made
pursuant to Rule 144 for blank check companies. Therefore, the
3,500,000 outstanding shares of common stock held by sole
officer/director cannot be sold pursuant to Rule 144, but must be
registered.
/35/
MANAGEMENT
--------------
The following table and subsequent discussion sets forth information
about our director and executive officer. Mr. Bothmann was elected to
serve as a director and President at the time of the founding of Eagle
Golf Corp. on its date of inception, February 20, 1996. He is
currently the sole officer/director of EAGLE GOLF CORP.
Name Age Position Term
Hans U. Bothmann 70 President, CEO, CFO Since February
and Director of 1996
Eagle Golf Corp.'s officer/director is elected annually to serve for
one year until his successor(s) is duly elected and qualified. Mr.
Bothmann will not be compensated for the hours he spends handling
Eagle's affairs; as such, he will devote himself full-time to Eagle
only at such time as that becomes practical and necessary.
Biographical Information
- -------------------------
Set forth below is biographical information for Mr. Hans Bothmann. See
RISK FACTORS for further discussion of the possible ramifications of
relying on a sole officer/director with a relative lack of experience:
We are dependent on one officer with limited formal business
experience.
Hans Bothmann, President, CEO, CFO and Director - has enjoyed a long
- ------------------------------------------------- and successful career
specializing in real estate and land purchase and management.
Mr. Bothmann relocated to the United States from Toronto,
Canada in 1970, where he had operated a successful real estate,
mortgage and general insurance brokerage office. From 1970 to 1979,
Mr. Bothmann resided in Miami, Florida, where he owned and operated a
licensed real estate office and investment company specializing in
purchasing and restoring income-producing properties such as single-
family houses, condos, and several ocean front hotels in Coral Gables
and Miami Beach. Since 1979, Mr. Bothmann has been a resident of Las
Vegas, Nevada, where he has been extremely active and successful in
arranging business and financial ventures, as well as purchasing and
investing in trust feeds and other financial instruments. From 1980 to
1982, Mr. Bothmann was a stock and bond broker for Paine Webber. After
leaving Paine Webber, Mr. Bothmann purchased and operated Loan Star
Mortgage Corporation, a licensed, full service mortgage and trust deed
company, until he sold the company in 1994. In addition, from 1993 to
1994, Mr. Bothmann was a consultant and sales manager for Allied
Services Corporation of Las Vegas, a builder and franchiser of private
and postal centers located in shopping centers nationwide. The sole
officer and director of the Company, he remains active in community
affairs.
Since 1994, Mr. Bothmann has been involved and responsible for managing
the stock bond options trust deed & real estate holdings and investments
for his & his family's accounts.
Mr. Bothmann is not presently associated with any blank check issuer
other than the Company, nor is he presently seeking acquisition targets
though he will begin to do so once the present offering has achieved
its purpose. He will, in fact, be the primary person involved in
locating an acquisition candidate by searching the New York Times, the
Wall Street Journal, other business publications and the Internet for
acquisition candidates and in all other ways open to her seeking
appropriate leads. The Company currently does not have employment
agreements with its executive officer. This is the first time that Mr.
Bothmann has been involved in a 419 Company.
There are no agreements or understandings for any officer or director
to resign at the request of another person. None of the officers or
directors is acting on behalf of or will act at the direction of any
other person. There are no agreements, arrangements or understandings
between management and anyone else by which other management is to be
selected for a particular office or position. We reserve the right to
engage outside consultants and professionals on an as needed basis,
though we have not done so to this point.
/36/
CONFLICTS OF INTEREST
-----------------------
Our president, treasurer, chief financial and accounting officer and
director, Hans Bothmann, does not serve in any capacity for any other
blank check offerings.
In addition, in order to mitigate any potential conflict, the
officer/director of Eagle has promised in writing not to participate as
an officer or director in any blank check company that files a
registration statement under the Securities Act of 1933, prior to the
date the Company identifies a business it proposes to acquire which
meets the acquisition criteria of Rule 419, or the date six months
following the date of this prospectus, whichever occurs first. Note
that, technically, if the latter date were to occur before Eagle has
identified a company suitable for acquisition, he could in fact
participate in another blank check company before that happens.
Our director will hold office until the next annual meeting of
shareholders and the election of his successor. Our director receives
no compensation for serving on the board other than reimbursement of
reasonable expenses incurred in attending meetings. Officers are
appointed by the board and serve at their discretion.
Potential investors will recall that, as stated above, its present
shareholder, officer/director may, in connection with Eagle's
acquisition of a business and as a negotiated element of the
acquisition, sell all or a portion of the common stock he holds at a
significant premium over his original investment in Eagle Golf Corp.
As a result of such sales, affiliates of the entity participating in
the business reorganization with Eagle would acquire a higher
percentage of equity ownership in it. It should be noted that his
shares are not being registered on this registration statement, and
therefore, he cannot sell his shares when this registration statement
is declared effective. No such sales, however, can be consummated
before the registration statement has been made effective.
Executive Compensation
- -----------------------
As previously stated, Mr. Bothmann receives no salary for her efforts
on Eagle's behalf, nor will he receive bonuses, stock options,
consulting fees, finder's fees, or in any other form.
Management Control
- -------------------
Our officer/director has pledged not to divest himself of ownership
and/or control of the Company prior to an acquisition or merger
transaction.
Statement Concerning Indemnification
- -------------------------------------
Our director is bound by the general standards for director provisions
in Nevada law. These provisions allow him wide latitude in decision-
making, including consideration of our long-term prospects and
interests and the social, economic, legal or other effects of any
proposed action on potential employees, suppliers, customers,
communities in which we may operate and the economy.
We have agreed to indemnify our director, meaning that we will pay for
damages He incurs for properly acting as director. It is the belief of
the SEC, however, that this indemnification may not be given for
violations of the Securities Act that governs the distribution of our
securities, and is therefore unenforceable.
/37/
What happens, therefore, in the event that a claim for indemnification
is asserted by our officer/director for liabilities incurred while
acting on our behalf in connection with the securities being
registered?
Simply put, if he incurred or paid the expenses in the successful
defense of a legal action, suit or proceeding, we will pay them.
Otherwise, unless our counsel determines that the matter has been
settled by controlling legal precedent, we will submit to a court of
appropriate jurisdiction the question of whether indemnification by us
is against public policy as expressed in the Act, and will abide by its
final adjudication of the issue. (For a fuller discussion of this
issue, see the first item of Part II of this prospectus, Item 24,
Indemnification Of Directors and Officers, which includes references to
the relevant section of Nevada law and to SEC policy.)
PRINCIPAL SHAREHOLDER
-----------------------
The following table sets forth information about our current
shareholder. The person named below has sole voting and investment
power with respect to the shares. The numbers in the table reflect
shares of common stock held as of the date of this prospectus. The
numbers in this table assume 6,500,000 shares of common stock
outstanding (maximum offering) and 4,000,000 shares of common stock
outstanding (minimum offering) following the offering:
Name and Shares of Pre- Minimum Maximum
Address of Common Offering Offering Offering
Beneficial Stock Percentage Percentage Percentage
Owner
Hans U. 3,500,000 100% 88% 54%
Bothmann1
1 Hans Bothmann, 7601 West Laredo, Las Vegas, NV, 89117.
Under blank check company rules, none of these shares will be available
for resale unless they are registered with the U. S. Securities and
Exchange Commission. (See, "Market for Our Common Shares," below).
Except for the securities being registered here, these shares are
restricted securities, as that term is defined in the Act. They are
subject to restrictions regarding resale; the certificates issued for
them have been stamped with a restrictive legend and will be subject to
stop transfer orders. His shares are not being registered in this
Registration and cannot be sold until they are registered.
Mr. Bothmann may be deemed our promoter, as that term is defined under
the Securities Act.
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/38/
UNDERWRITING
--------------
NevWest Securities Corporation ("NevWest"), a duly licensed
broker/dealer, is acting in conjunction with this Offering as the
placement agent for the Company. No entity regulating NevWest has
passed on the merits or given its approval to any securities offered
hereby or the terms of the Offering, nor has any such entity passed
upon the accuracy or completeness of any offering memorandum or other
selling literature. NevWest has not underwritten this Offering and is
not obliged to commit to the purchase of any securities for resale. As
such, NevWest may not be construed as an underwriter in conjunction
with this Offering. The representations made in this Memorandum are
exclusively the representations of the Company as relied upon by
NevWest in this Offering. The Company warrants that in authorizing the
use of this Memorandum, it has caused to be undertaken a sufficient
review of the Memorandum by competent counsel and no provision
contained herein shall result in any duty incumbent upon NevWest, its
officers, directors, agents, and employees to ascertain the legal
and/or regulatory sufficiency of this Memorandum.
NevWest makes no representations in conjunction with this Offering
outside the scope of those contained in this Memorandum. In the course
of presenting the information contained in the Memorandum, NevWest
reiterates the disclosures contained therein in a good faith reliance
on the Company and the information and/or documentation provided.
NevWest does not endorse or recommend this investment or conversely,
endorse or recommend non-participation. NevWest agents or brokers
working in conjunction with this Offering have no authorization to make
any representations outside the scope of those contained in this
Memorandum.
Each offeree is advised to consider carefully the merit of this
Offering and, if necessary, seek independent advice or counsel from
other sources. No discussion, discourse, or communication with NevWest
should be construed as an endorsement or assessment of the merit of
this Offering or the suitability of such for any Offeree. This
Offering involves speculative securities and due care should be given
in considering the substantial risk associated with any investment in
the Company by each offeree contemplating purchase.
The Company warrants that it has taken prudent steps necessary to
ensure that this Memorandum contains no material misrepresentations or
omissions and hereby acknowledges that NevWest is not responsible for
ensuring the accuracy or sufficiency of any documentation or
disclosures herein.
The Company ensures that any material or documentation provided to
NevWest and any representations made to NevWest, its officers,
directors, employees, or agents are accurate in sum and substance as
may be reasonably known or should be expected to be known by the
Company in facilitating NevWest's efforts in directly, or indirectly,
selling or causing to be sold securities of the Company offered for
sale pursuant to the Offering on a best efforts basis.
The Company hereby expressly acknowledges that NevWest is under no
obligation to purchase any securities in a manner which may be
construed as a firm underwriting or commitment and that the sum and
substance of this relationship is strictly characterized by the term(s)
"agent," "finder," and "best efforts" as these terms are generally
defined by applicable rules and regulations as promulgated by the SEC
or NASD. There is no obligation on the part of NevWest to purchase or
raise the minimum proceeds indicated.
/39/
CERTAIN TRANSACTIONS
----------------------
The following table sets forth information regarding all
securities sold by us since our inception on February 20, 1996.
Name and Shares of Date Amount
Address of Common Purchased Paid
Beneficial Stock
Owner
Hans U. 2,000,000 February 20, 1996 2,000
Bothmann1
Hans U. 1,500,000 February 15, 2002 1,500
Bothmann1
1 Hans Bothmann, 7601 West Laredo, Las Vegas, NV, 89117.
These shares are restricted securities, as that term is defined in
the rules and regulations promulgated under the Securities Act of 1933
and are subject to certain restrictions regarding resale. Certificates
evidencing all of the above-referenced securities have been stamped
with a restrictive legend and will be subject to stop transfer orders.
/40/
WHERE CAN YOU FIND MORE INFORMATION?
---------------------------------------
We have not previously been required to comply with the reporting
requirements of the Exchange Act. We have filed a registration
statement with the SEC on Form SB-2 to register the offer and sale of
the shares. This prospectus is part of that registration statement,
and, as permitted by the SEC's rules, does not contain all of the
information in the registration statement. For further information
about us and the shares offered under this prospectus, you may refer to
the registration statement and to the exhibits and schedules filed as a
part of the registration statement. You can review the registration
statement and its exhibits and schedules at the public reference
facility maintained by the SEC at Judiciary Plaza, Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the regional offices of the
SEC at 7 World Trade Center, Suite 1300, New York, New York 10048 and
Citicorp Center, Suite 1400, 500 West Madison Street, Chicago, Illinois
60661. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference room. The registration statement is also
available electronically on the World Wide Web at http://www.sec.gov.
You can also call or write us at any time with any questions you may
have. We would be pleased to speak with you about any aspect of our
business and this offering.
MARKET FOR OUR COMMON STOCK
-----------------------------
Prior to now, there has been no trading market for our common stock.
Under the requirements of Rule 15g-8 of the Exchange Act, a trading
market will not develop prior to or after the effectiveness of this
prospectus or while the common stock under this offering is maintained
in escrow.
Eagle's present management has not and does not anticipate being in
contact with any broker-dealers regarding the making of a market for
our common stock prior to the execution of an acquisition agreement;
that task is more properly to be initiated by the management of the
entity that will exist post-acquisition.
There are no outstanding options or warrants to purchase, or securities
convertible into, our common equity. The 3,500,000 shares of our
common stock currently outstanding are restricted securities as that
term is defined in the Securities Act. Under blank check company rules
established by the SEC, these shares must be registered with the SEC
before they can be resold. It is to be noted that no such sale can be
contemplated or take place prior to the registration statement being
declared effective.
Special State Law Considerations
- ---------------------------------
The shares have not been registered in the state of Nevada because of
specific exemptions in their laws relating to the limited availability
of the offering. The shares cannot be sold, transferred or otherwise
disposed of to any person or entity unless subsequently registered in
the state Nevada, if that registration is ultimately required.
Registration there is not necessary if fewer than twenty-five people
purchase the shares in a given offering. We may never reach that
point. The following paragraph refers you to the applicable statutes
of that state.
The shares have not been registered under the Nevada Uniform Securities
Act, in the event that sales are not made to twenty-five (25) or more
persons in the state of Nevada in accordance with the exemption for
limited offers or sales of securities set forth in Nevada Revised
Stature Section 90.530(11) of the Nevada Uniform Securities Act.
/41/
REPORTS TO STOCKHOLDERS
-------------------------
We intend to furnish our stockholders with annual reports containing
audited financial statements as soon as practicable at the end of each
fiscal year. Our fiscal year ends on December 31.
Method of Subscribing
- ----------------------
Prospective investors should make their checks payable to LaSalle Bank
National Banking Association fbo Eagle Golf Corp., whose address is 100
West Washington Phoenix, AZ 85003 and remit the checks and
subscription agreements to Southwest Escrow at their address listed
above. Subscriptions may not be withdrawn once made except in
accordance with applicable law. The Company reserves the right to
reject any subscription in whole or in part in its sole discretion for
any reason whatsoever notwithstanding tender of payment, and to
withdraw this blank check offering at any time prior to acceptance by
us for the subscriptions received.
The escrow agent, as described, will hold funds.
- ------------------------------------------------
No offers to sell will be made and no offers to subscribe will be
accepted until the registration statement has been declared effective.
LEGAL MATTERS
---------------
Thomas C. Cook, Esq., our attorney, will attest to the validity of the
issuing of the shares offered here for Eagle Golf Corp.
EXPERTS
---------
The financial statement of Eagle Golf Corp. as of June 30, 2002 is
included in this Prospectus and has been prepared by G. Brad Beckstead,
CPA, an independent auditor. Along with his audit, Mr. Beckstead has
also included his expert opinion.
[Balance of this page intentionally left blank.]
/42/
PART F/S
FINANCIAL STATEMENTS
EAGLE GOLF CORPORATION
(A Development Stage Company)
Balance Sheet
as of
December 31, 2001 And 2000
and
Statement of Operations,
Changes in Stockholders' Equity, and
Cash Flows
for the years ended
December 31, 2001 and 2000
and
for the period
June 7, 1999 (Date of Inception)
through
December 31, 2001
INDEX TO FINANCIAL STATEMENTS
PAGE
INDEPENDENT AUDITOR'S REPORT (G. Brad Beckstead, CPA) F-1
BALANCE SHEET F-2
STATEMENT OF OPERATIONS F-3
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY F-4
STATEMENT OF CASH FLOWS F-5
FOOTNOTES F-6
/43/
G. BRAD BECKSTEAD
Certified Public Accountant
330 E. Warm Springs
Las Vegas, NV 89119
702.257.1984
702.362.0540 (fax)
INDEPENDENT AUDITOR'S REPORT
February 28, 2002
Board of Directors
Eagle Golf Corporation
Las Vegas, NV
I have audited the Balance Sheets of Eagle Golf Corporation (the "Company")
(A Development Stage Company), as of December 31, 2001 and 2000, and the
related Statements of Operations, Stockholders' Equity, and Cash Flows for
the years ended December 31, 2001 and 2000 and for the period June 7, 1999
(Date of Inception) to December 31, 2001. These financial statements are
the responsibility of the Company's 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. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall 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 Eagle Golf Corporation
(A Development Stage Company) as of December 31, 2001 and 2000, and the
results of its operations and cash flows for the years ended December 31, 2001
and 2000 and for the period June 7, 1999 (Date of Inception) to
December 31, 2001, 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 has had limited operations and have not commenced
planned principal operations. This raises substantial doubt about its ability
to continue as a going concern. Management's plan in regard to these matters
are also described in Note 3. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
G. Brad Beckstead, CPA
F-1
/44/
Eagle Golf Corporation
(a Development Stage Company)
Balance Sheet
December 31
Assets 2001 2000
--------- ---------
Current assets:
Cash $ - $ -
Due from shareholder 1,079 1,079
--------- ---------
Total current assets 1,079 1,079
--------- ---------
$ 1,079 $ 1,079
========= =========
Liabilities and Stockholders' Equity
Current liabilities $ - $ -
--------- ---------
Stockholders' Equity:
Common stock, $0.001 par value; 20,000,000 shares
authorized, 2,000,000 shares issued and outstanding
as of 12/31/01 and 12/31/00, respectively 2,000 2,000
Preferred stock, $0.001 par value, 5,000,000 shares
authorized, no shares issued and outstanding - -
Additional paid-in capital 8,100 8,100
(Deficit) accumulated during development stage (9,021) (9,021)
--------- ---------
1,079 1,079
--------- ---------
$ 1,079 $ 1,079
========= =========
The accompanying Notes are an integral part of these financial statements.
/45/
Eagle Golf Corporation
(a Development Stage Company)
Statements of Operations
For the years ended June 7, 1999
-------------------------- (Inception) to
December 31, December 31, December 31,
2001 2000 2001
------------ ------------ ------------
Revenue $ - $ - $ -
------------ ------------ ------------
Expenses:
General and administrative
expenses - 8,864 9,021
Amortization expense - - -
------------ ------------ ------------
Total expenses - 8,864 9,021
------------ ------------ ------------
Net (loss) $ - $ (8,864) $ (9,021)
============ ============ ============
Weighted average number of
common shares outstanding 2,000,000 2,000,000 2,000,000
============ ============ ============
Net (loss) per share $ (0.00) $ (0.00) $ (0.00)
============ ============ ============
The accompanying Notes are an integral part of these financial statements.
/46/
Eagle Golf Corporation
(a Development Stage Company)
Statements of Changes in Stockholders' Equity
(Deficit)
Common Stock Accumulated
------------ Additional During Total
Paid-in Development Stockholders'
Shares Amount Capital Stage Equity(Deficit)
-------- -------- ------- ---------- ------------
December 31, 1999
Founders shares
issued for cash 2,000,000 $ 2,000 $ - $ - $ 2,000
December 31, 1999
Donated capital 8,100 8,100
Net (loss)
June 7, 1999
(inception) to
December 31, 1999 - - - (157) (157)
-------- -------- ------- ---------- ------------
Balance, 12/31/99 2,000,000 $ 2,000 $ 8,100 $ (157) $ 9,943
Net (loss)
January 1, 2000 to
December 31, 2000 (8,864) (8,864)
-------- -------- ------- ---------- ------------
Balance, 12/31/00 2,000,000 $ 2,000 $ 8,100 $ (9,021) $ 1,079
Net (loss)
January 1, 2001 to
December 31, 2001 - -
Balance, 12/31/00 2,000,000 $ 2,000 $ 8,100 $ (9,021) $ 1,079
=========== ======== ======= ========== ============
The accompanying Notes are an integral part of these financial statements.
/47/
Eagle Golf Corporation
(a Development Stage Company)
Statements of Cash Flows
For the years ended June 7, 1999
----------------------- (Inception) to
December 31, December 31, December 31,
2001 2000 2001
--------- --------- -------------
Cash flows from operating activities
Net (loss) $ - $ (8,864) $ (9,021)
Adjustments to reconcile net (loss)
(used) by operating activities:
Decrease in organizational costs $ - 8,752 -
(Increase) in due to shareholder - (1,079) (1,079)
--------- --------- -------------
Net cash (used) by operating
activities - (1,191) (10,100)
--------- --------- -------------
Cash flows from investing activities - - -
--------- --------- -------------
Net cash provided (used) by
investing activities - - -
--------- --------- -------------
Cash flows from financing activities
Issuance of common stock - - 10,100
--------- --------- -------------
Net cash provided by financing
activities - - 10,100
--------- --------- -------------
Net decrease in cash (1,191) -
Cash - beginning - 1,191 -
--------- --------- -------------
Cash - ending $ - $ $ -
========= ========= =============
Supplemental disclosures:
Interest paid $ - $ - $ -
========= ========= =============
Income taxes paid $ - $ - $ -
========= ========= =============
Non-cash transactions:
Stock issued for services provided $ - $ - $ -
========= ========= =============
Number of shares issued for services - - -
========= ========= =============
The accompanying Notes are an integral part of these financial statements.
/48/
Eagle Golf Corporation
(a Development Stage Company)
Notes
6
Note 1 - History and organization of the company
The Company was organized June 7, 1999 (Date of Inception) under
the laws of the State of Nevada, as Eagle Golf Corporation. The
Company has no operations and in accordance with SFAS #7, the
Company is considered a development stage company. The Company
is authorized to issue 20,000,000 shares of $0.001 par value
common stock and 5,000,000 shares of $0.001 par value preferred
stock.
Note 2 - Accounting policies and procedures
Use of estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Cash and cash equivalents
For the purpose of the statements of cash flows, all highly
liquid investments with an original maturity of three months or
less are considered to be cash equivalents. There were no cash
equivalents as of December 31, 2001 and 2000.
Revenue recognition
The Company recognizes revenue on the accrual basis.
Advertising costs
The Company expenses all costs of advertising as incurred.
There were no advertising costs included in general and
administrative expenses as of December 31, 2001 and 2000.
Fair value of financial instruments
Fair value estimates discussed herein are based upon certain
market assumptions and pertinent information available to
management as of December 31, 2001 and 2000. The respective
carrying value of certain on-balance-sheet financial
instruments approximated their fair values. These financial
instruments include cash and accounts payable. Fair values
were assumed to approximate carrying values for cash and
payables because they are short term in nature and their
carrying amounts approximate fair values or they are payable on
demand.
Impairment of long lived assets
Long lived assets held and used by the Company are reviewed for
possible impairment whenever events or circumstances indicate
the carrying amount of an asset may not be recoverable or is
impaired. No such impairments have been identified by
management at December 31, 2001 and 2000.
Reporting on the costs of start-up activities
Statement of Position 98-5 (SOP 98-5), "Reporting on the Costs
of Start-Up Activities," which provides guidance on the
financial reporting of start-up costs and organizational costs,
requires most costs of start-up activities and organizational
costs to be expensed as incurred. SOP 98-5 is effective for
fiscal years beginning after December 15, 1998. With the
adoption of SOP 98-5, there has been little or no effect on the
Company's financial statements.
Loss per share
Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS #128) "Earnings
Per Share". Basic loss per share is computed by dividing
losses available to common stockholders by the weighted average
number of common shares outstanding during the period. As of
December 31, 2001 and 2000, the Company had no dilutive common
stock equivalents, such as stock options or warrants.
/49/
Dividends
The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid or declared since
inception.
Segment reporting
The Company follows Statement of Financial Accounting Standards
No. 130, "Disclosures About Segments of an Enterprise and
Related Information." The Company operates as a single segment
and will evaluate additional segment disclosure requirements as
it expands its operations.
Income taxes
The Company follows Statement of Financial Accounting Standard
No. 109, "Accounting for Income Taxes" ("SFAS No. 109") for
recording the provision for income taxes. Deferred tax assets
and liabilities are computed based upon the difference between
the financial statement and income tax basis of assets and
liabilities using the enacted marginal tax rate applicable when
the related asset or liability is expected to be realized or
settled. Deferred income tax expenses or benefits are based on
the changes in the asset or liability each period. If
available evidence suggests that it is more likely than not
that some portion or all of the deferred tax assets will not be
realized, a valuation allowance is required to reduce the
deferred tax assets to the amount that is more likely than not
to be realized. Future changes in such valuation allowance are
included in the provision for deferred income taxes in the
period of change.
Deferred income taxes may arise from temporary differences
resulting from income and expense items reported for financial
accounting and tax purposes in different periods. Deferred
taxes are classified as current or non-current, depending on
the classification of assets and liabilities to which they
relate. Deferred taxes arising from temporary differences that
are not related to an asset or liability are classified as
current or non-current depending on the periods in which the
temporary differences are expected to reverse.
Recent pronouncements
The FASB recently issued Statement No. 137, "Accounting for
Derivative Instruments and Hedging Activities-Deferral of
Effective Date of FASB Statement No. 133". The Statement
defers for one year the effective date of FASB Statement No.
133, "Accounting for Derivative Instruments and Hedging
Activities". The rule now will apply to all fiscal quarters of
all fiscal years beginning after June 15, 2000. In June 1998,
the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." The Statement will
require the company to recognize all derivatives on the balance
sheet at fair value. Derivatives that are not hedges must be
adjusted to fair value through income, if the derivative is a
hedge, depending on the nature of the hedge, changes in the
fair value of derivatives will either be offset against the
change in fair value of the hedged assets, liabilities, or firm
commitments through earnings or recognized in other
comprehensive income until the hedged item is recognized in
earnings. The ineffective portion of a derivative's change in
fair value will be immediately recognized in earnings. The
company does not expect SFAS No. 133 to have a material impact
on earnings and financial position.
In December 1999, the Securities and Exchange Commission
released Staff Accounting Bulletin No. 101, Revenue Recognition
in Financial Statements (SAB No. 101), which provides guidance
on the recognition, presentation and disclosure of revenue in
financial statements. SAB No. 101 did not impact the company's
revenue recognition policies.
Year end
The Company has adopted December 31 as its fiscal year end.
/50/
Note 3 - Going concern
The Company's financial statements are prepared using the
generally accepted accounting principles applicable to a going
concern, which contemplates the realization of assets and
liquidation of liabilities in the normal course of business.
However, the Company has not commenced its planned principal
operations and it has not generated any revenues. In order to
obtain the necessary capital, the Company plans to raise funds
via securities offering registered on Form SB-2. If the
securities offering does not provide sufficient capital, a
shareholder of the Company has agreed to provide sufficient funds
as a loan over the next twelve-month period. However, the
Company is dependent upon its ability to secure equity and/or
debt financing and there are no assurances that the Company will
be successful, without sufficient financing it would be unlikely
for the Company to continue as a going concern.
The officers and directors are involved in other business
activities and may, in the future, become involved in other
business opportunities. If a specific business opportunity
becomes available, such persons may face a conflict in selecting
between the Company and their other business interests. The
Company has not formulated a policy for the resolution of such
conflicts.
Note 4 - Income taxes
The Company accounts for income taxes under Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes" ("SFAS No. 109"), which requires use of the liability
method. SFAS No. 109 provides that deferred tax assets and
liabilities are recorded based on the differences between the tax
bases of assets and liabilities and their carrying amounts for
financial reporting purposes, referred to as temporary
differences. Deferred tax assets and liabilities at the end of
each period are determined using the currently enacted tax rates
applied to taxable income in the periods in which the deferred
tax assets and liabilities are expected to be settled or
realized.
The provision for income taxes differs from the amount computed
by applying the statutory federal income tax rate to income
before provision for income taxes. The sources and tax effects
of the differences are as follows:
U.S federal statutory rate (34.0%)
Valuation reserve 34.0%
Total
-%
As of December 31, 2001 and 2000, the Company has a net operating
loss carryforward of approximately $9,021 for tax purposes, which
will be available to offset future taxable income. If not used,
this carryforward will expire in 2021.
Note 6 - Stockholder's equity
The Company is authorized to issue 20,000,000 shares of its
$0.001 par value common stock and 5,000,000 shares of its $0.001
par value preferred stock.
During December 31, 1999, the Company issued 2,000,000 shares of
its $0.001 par value common stock to an officer and director in
exchange for cash in the amount of $2,000.
On December 31, 1999, a director donated additional paid-in
capital in the amount of $8,100.
There have been no other issuances of common and/or preferred
stock.
/51/
Note 7 - Related party transactions
During December 31, 1999, the Company issued 2,000,000 shares of
its $0.001 par value common stock to an officer and director in
exchange for cash in the amount of $2,000.
On December 31, 1999, a director donated additional paid-in
capital in the amount of $8,100.
Office space and services are provided without charge by a
director and shareholder. Such costs are immaterial to the
financial statements and, accordingly, have not been reflected
therein. The officers and directors of the Company are involved
in other business activities and may, in the future, become
involved in other business opportunities. If a specific business
opportunity becomes available, such persons may face a conflict
in selecting between the Company and their other business
interests. The Company has not formulated a policy for the
resolution of such conflicts.
Note 8 - Warrants and options
There are no warrants or options outstanding to acquire any
additional shares of common or preferred stock.
/52/
PART F/S
FINANCIAL STATEMENTS
EAGLE GOLF CORPORATION
(A Development Stage Company)
Balance Sheet
as of
June 30, 2002 And December 31, 2001
and
Statement of Operations,
For the Three Months and Six Months Ending
June 30, 2002 and June 30, 2001
and
For the Period
June 7, 1999 (Inception) to June 30, 2002
and
Cash Flows
For the Six Months Ending
June 30, 2002 and 2001
and for the peroid
June 7, 1999 (Inception) to June 30, 2002
INDEX TO FINANCIAL STATEMENTS
PAGE
INDEPENDENT ACCOUNTANT'S REVIEW REPORT F-1
BALANCE SHEET F-2
STATEMENT OF OPERATIONS F-3
STATEMENT OF CASH FLOWS F-4
FOOTNOTES F-5
/53/
Beckstead and Watts, LLP
Certified Public Accountants
3340 Wynn Road, Suite C
Las Vegas, NV 89102
702.257.1984
702.362.0540 fax
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
August 28, 2002
Board of Directors
Eagle Golf Corporation
(a Development Stage Company)
Las Vegas, NV
We have reviewed the accompanying balance sheet of Eagle Golf
Corporation (a Nevada corporation) (a development stage company)
as of June 30, 2002 and the related statements of operations for
the three-months and six-months ended June 30, 2002 and 2001 and
for the period June 7, 1999 (Inception) to June 30, 2002, and
statements of cash flows for the six-months ended June 30, 2002
and 2001 and for the period June 7, 1999 (Inception) to June 30,
2002. These financial statements are the responsibility of the
Company's management.
We conducted our reviews in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data, and making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing
standards, which will be performed for the full year with the
objective of expressing an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such
an opinion.
Based on our reviews, we are not aware of any material
modifications that should be made to the accompanying financial
statements referred to above for them to be in conformity with
generally accepted accounting principles in the United States of
America.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in
Note 2 to the financial statements, the Company has had limited
operations and has not commenced planned principal operations.
This raises substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are
also described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of
this uncertainty.
G. Brad Beckstead, CPA has previously audited, in accordance with
generally accepted auditing standards, the balance sheet of Eagle
Golf Corporation (a development stage company) as of December 31,
2001, and the related statements of operations, stockholders'
equity, and cash flows for the year then ended (not presented
herein) and in his report dated February 28, 2002, he expressed
an unqualified opinion on those financial statements.
/S/ Beckstead and Watts, LLP
Beckstead and Watts, LLP
The accompanying Notes are an integral part of these financial statements.
F-1
/54/
Eagle Golf Corporation
(a Development Stage Company)
Balance Sheet
(unaudited)
June 30, December 31,
Assets 2002 2000
--------- ---------
Current assets:
Cash and equivalents $ 3,365 $ -
Due from shareholder 1,079 1,079
--------- ---------
Total current assets 4,444 1,079
--------- ---------
$ 4,444 $ 1,079
========= =========
Liabilities and Stockholders' Equity (Deficit)
Current liabilities $ - $ -
--------- ---------
Stockholders' Equity:
Preferred stock, $0.001 par value, 5,000,000 shares
authorized, no shares issued and outstanding - -
Common stock, $0.001 par value; 20,000,000 shares
authorized, 3,500,000 shares issued and outstanding
as of 6/30/02 and 12/31/01, respectively 3,500 3,500
Additional paid-in capital 15,600 8,100
(Deficit) accumulated during development stage (14,656) (9,021)
--------- ---------
4,444 1,079
--------- ---------
$ 4,444 $ 1,079
========= =========
The accompanying Notes are an integral part of these financial statements.
F-2
/55/
Eagle Golf Corporation
(a Development Stage Company)
Statement of Operations
(unaudited)
Three Months Six Months June 7, 1999
Ending June 30, Ending June 30, (Inception) to
-------------- ---------------- June 30,
2002 2001 2002 2001 2002
------ ------ ------- ------- -------------
Revenue $ - $ - $ - $ - $ -
------ ------ ------- ------- -------------
Expenses:
General and administrative 135 - 1,635 - 10,656
expenses
COnsulting services - - 4,000 - 4,000
------ ------ ------- ------- -------------
Total expenses (135) - 5,635 - 14.656
------ ------ ------- ------- -------------
Net income (loss) $ (135) $ - $(5,635) $ - $ (14,656)
====== ====== ======= ======= =============
Weighted average number of
common shares outstanding
basic & fully diluted 3,500,000 3,500,000 3,500,000 3,500,000
========= ========= ========= =========
Net (loss) per share
basic & fully diluted $ - $ - $ - $ -
====== ====== ======= =======
The accompanying Notes are an integral part of these financial statements.
F-3
/56/
Eagle Golf Corporation
(a Development Stage Company)
Statement of Cash Flows
(unaudited)
Six Months Ending June 7,1999
June 30, (Inception) to
--------------------- June 30,
2002 2001 2002
--------- --------- -------------
Cash flows from operating activities
Net (loss) $ (5,635) $ - $ (14,656)
Adjustments to reconcile net
(loss) to net cash (used) by
operating activities:
(Increase) in due from shareholder - - (1,079)
--------- --------- -------------
Net cash (used) by operating
activities (5,635) - (15,735)
--------- --------- -------------
--------- --------- -------------
Cash flows from investing activities - - -
--------- --------- -------------
Cash flows from financing activities
Issuance of common stock 9,000 - 19,100
--------- --------- -------------
Net cash provided by financing
activities 9,000 - 19,100
--------- --------- -------------
Net increase in cash 3,365 - 3,365
Cash - beginning - - -
--------- --------- -------------
Cash - ending $ 3,365 $ - $ 3,365
========= ========= =============
Supplemental disclosures:
Interest paid $ - $ - $ -
========= ========= =============
Income taxes paid $ - $ - $ -
========= ========= =============
The accompanying Notes are an integral part of these financial statements.
F-4
/57/
Eagle Golf Corporation
(a Development Stage Company)
Notes
Note 1 - Basis of presentation
The interim financial statements included herein, presented in
accordance with United States generally accepted accounting
principles and stated in US dollars, have been prepared by the
Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations,
although the Company believes that the disclosures are adequate to
make the information presented not misleading.
These statements reflect all adjustments, consisting of normal
recurring adjustments, which, in the opinion of management, are
necessary for fair presentation of the information contained
therein. It is suggested that these interim financial statements
be read in conjunction with the financial statements of the Company
for the year ended December 31, 2001 and notes thereto included in
he Company's Form SB2. The Company follows the same accounting
policies in the preparation of interim reports.
Results of operations for the interim periods are not indicative
of annual results.
Note 2 - Going concern
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As shown in the accompanying
financial statements, the Company has incurred a net loss of $14,656 for
the period from June 7, 1999 (inception) to June 30, 2002, and has no
sales. The future of the Company is dependent upon its ability to
obtain financing and upon future profitable operations from the
development of its new business opportunities. Management has plans
to seek additional capital through private placements and public
offerings of its common stock. The financial statements do not
include any adjustments relating to the recoverability and classification
of recorded assets, or the amounts of and classification of liabilities
that might be necessary in the event the Company cannot continue in existence.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. These financial statements do not include
any adjustments that might arise from this uncertainty.
Note 3 - Stockholder's equity
The Company is authorized to issue 5,000,000 shares of its $0.001 par value
preferred stock and 20,000,000 shares of its $0.001 par value common stock.
During February 2002, certain shareholders donated $9,000 to the Company
as contributed capital.
There have been no other issuances of common stock.
/58/
Note 4 - Related party transactions
Office space and services are provided without charge by a director and
shareholder. Such costs are immaterial to the financial statements and,
accordingly, have not been reflected therein. The officers and directors
of the Company are involved in other business activities and may, in the
future, become involved in other business opportunities. If a specific
business opportunity becomes available, such persons may face a conflict
in selecting between the Company and their other business interests.
The Company has not formulated a policy for the resolution of such conflicts.
/59/
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
----------------------------------------------------
Except as set forth in the following part of this document, there is no
charter provision, bylaw, contract, arrangement or statute under which
any officer or director of the registrant is insured or indemnified in
any manner against any liability which he or she may incur in his or
her capacity as such.
Nevada Law
- ----------
Pursuant to the provisions of Nevada Revised Statutes 78.751, the
Corporation shall indemnify its directors, officers and employees as
follows:
Every director, officer, or employee of the corporation shall be
indemnified by the corporation against all expenses and liabilities,
including counsel fees, reasonably incurred by or imposed upon his/her
in connection with any proceeding to which he/she may be made a party,
or in which he/she may become involved, by reason of being or having
been a director, officer, employee or agent of the corporation or is or
was serving at the request of the corporation as a director, officer,
employee or agent of the corporation, partnership, joint venture, trust
or enterprise, or any settlement thereof, whether or not he/she is a
director, officer, employee or agent at the time such expenses are
incurred, except in such cases wherein the director, officer, employee
or agent is adjudged guilty of willful misfeasance or malfeasance in
the performance of his/her duties; provided that in the event of a
settlement the indemnification herein shall apply only when the Board
of Directors approves such settlement and reimbursement as being for
the best interests of the Corporation.
The Corporation shall provide to any person who is or was a director,
officer, employee or agent of the Corporation or is or was serving at
the request of the Corporation as a director, officer, employee or
agent of the corporation, partnership, joint venture, trust or
enterprise, the indemnity against expenses of a suit, litigation or
other proceedings which is specifically permissible under applicable
law.
The Securities and Exchange Commission's Policy on Indemnification
- -------------------------------------------------------------------
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to any provisions contained in its
Certificate of Incorporation, or bylaws, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether indemnification by it is
against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
/60/
ITEM 25. DISCLOSURE OF ANY PREVIOUS INVOLVEMENT OF ANY OFFICER OR
-------------------------------------------------------------------
DIRECTOR OF THE ISSUER IN ANY SIMILAR OFFERING
------------------------------------------------
Mr. Bothmann, as the only officer and director has not had any previous
involvement with any similar offering/419 offering.
ITEM 26. SHAREHOLDER APPROVAL AND INFORMATIONAL STATEMENT
-----------------------------------------------------------
We undertake to obtain the approval of a majority of disinterested
shareholders if we propose to:
1) Spend more than 50 percent of the net offering proceeds in a
transaction or series of related transactions;
2) Issue new shares of stock equivalent, after completion of the
transaction or series of related transactions, to more than 50 percent
of the issued and outstanding stock;
3) Change, without a meeting of the shareholders and within any
12-month period, more than one-half the members of the board of
directors; or
4) Change the criteria for acquisitions set forth in the prospectus;
We undertake to distribute an informational statement, before any vote
of the shareholders conducted pursuant to items 1-4 mentioned in the
immediately preceding paragraph, setting forth:
1) All material facts regarding the proposal, including specific
disclosure of the manner in which the criteria for selection set forth
in the offering prospectus have been applied;
2) A reasonably detailed description of any business or asset to be
acquired in the proposed transaction;
3) A detailed disclosure of any related-party transaction, finders'
fee, consulting fee or agreement expected to be entered into or paid
within the 12 months following the proposed transaction with or to any
person who is an officer, director, promoter or principal shareholder
of the issuer; and
4) A pro forma balance sheet, prepared in accordance with generally
accepted accounting principles, which gives effect to the proposed
transaction and discloses the dilution to shareholders resulting from
the transaction and the book value of the issuer immediately before and
immediately after the transaction.
ITEM 27. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
------------------------------------------------------
The estimated expenses in connection with this offering are as follows:
Use of Proceeds Min. Use Allocation Max. Use
Allocation
Offering Expenses1 $2,500 $2,500
Escrow Account2 $22,500 $117,500
-------- ---------
Total Proceeds $25,000 $120,000
1.Offering costs include filing, printing, legal, accounting,
transfer agent and escrow agent fees.
2.The proceeds received in this offering will be put into the
escrow account pending closing of a business combination and
reconfirmation. (See Exhibit 2.1 Escrow Agreement).
/61/
There will be no compensation paid or due or owing to any officer or
director.
ITEM 28. RECENT SALES OF UNREGISTERED SECURITIES
--------------------------------------------------
The registrant has sold securities in the manner set forth below
without registration under the Securities Act of 1933 (the Act). On
about February 20, 1996, the company raised $2,000.00 through the sale
of 2,000,000 shares of common stock at a price of $0.001 per share
and on February 15, 2002, the company raised $1,500.00 through the sale
of 1,500,000 shares of common stock at a price of $0.001 per share as
follows:
Name and Address of Shares of Date Amount
Beneficial Owner Common Stock Purchased Paid
Hans U. 2,000,000 February 20, 1996 2,000
Bothmann1
Hans U. 1,500,000 February 15, 2002 1,500
Bothmann1
1 Hans Bothmann, 7601 West Laredo, Las Vegas, NV, 89117.
These shares are restricted securities, as that term is defined in the
rules and regulations promulgated under the Securities Act of 1933 and
are subject to certain restrictions regarding resale. Certificates
evidencing all of the above-referenced securities have been stamped
with a restrictive legend and will be subject to stop transfer orders.
ITEM 29. EXHIBITS
-------------------
The following exhibits are filed with this Registration Statement:
EXHIBITS
SEC REFERENCE
NUMBER TITLE OF DOCUMENT
1.1 Form of Underwriting Agreement
2.1 Escrow Agreement
3.1 Articles of Incorporation
3.2 Amended Articles of Incorporation
3.3 Bylaws
5 Attorney Legal Opinion and Consent Letter
23.1 Independent Auditor's Consent
99 Subscription Agreement
All other Exhibits called for by Rule 601 of Regulation S-B are not
applicable to this filing. Information pertaining to our Common Stock
is contained in our Articles of Incorporation and By-Laws.
/62/
ITEM 30. UNDERTAKINGS
-----------------------
(1) To file, during any period in which offers and sales of the
securities offered are made, a post-effective amendment to this
Registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the Act); and
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the Registration statement (or the most recent post-
effective amendment thereof) that, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the Registration statement
or any material change to such information in the Registration
statement.
(2) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the
termination of the offering.
(4) That all such post-effective amendments will comply with the
applicable form, rules and regulations of the Securities and Exchange
Commission in effect at the time of the filing.
(5) In the event any material changes or transactions are not mentioned
arise, we have undertaken the responsibility to amend this prospectus
and the registration statement, of which this prospectus is a part,
through the filing of post-effective amendments, indicating the
existence of any such material changes or transactions which are not
reflected or contained previously, if these changes occurs within 90
days of the effective date.
SIGNATURES
------------
According to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form SB-2 and has duly
caused this the Registration statement to be signed on its behalf by
the undersigned hereunto duly authorized in the City of Las Vegas on
this day, August 28, 2002.
EAGLE GOLF CORPORATION
------------------------
(Registrant)
/s/ Hans U. Bothmann
______________________________
Hans U. Bothmann
President, CEO, CFO and Director
/63/