UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 For the Quarter Ended March 31, 2002 OR [ ] Transition Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Commission File Number 0-26067 EAGLES NEST MINING COMPANY (Name of small business issuer in its charter) Nevada 87-0571300 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 253 Ontario #1, P.O. Box 3303, Park City, Utah 84060 (Address of principal executive offices) (Zip Code) Issuer's telephone no., including area code: (435) 649-5060 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. Class Outstanding as of May 14, 2002 Common Stock, $.001 par value 17,408,750 TABLE OF CONTENTS Page Number PART I. FINANCIAL INFORMATION Item 1. Financial Statements Balance Sheets, September 30, 2001 and March 31, 2002 3 Statements of Operations, Three Months and Six Months Ended March 31, 2002 and 2001 and From September 14, 1987 (Date of Inception) through March 31, 2002 4 Statements of Stockholders' Equity, From September 14, 1987 (Date of Inception) through March 31, 2002 5 Statements of Cash Flows, Three Months Ended March 31, 2002 and 2001 and From September 14, 1987 (Date of Inception) through March 31, 2002 8 Notes to Financial Statements 9 Item 2 Management's Discussion and Analysis or Plan of Operation 10 PART II. OTHER INFORMATION Item 1. Legal Proceedings 13 Item 2. Changes In Securities 13 Item 3. Defaults Upon Senior Securities 13 Item 4. Submission of Matters to a Vote of Securities Holders 13 Item 5. Other Information 13 Item 6. Exhibits and Reports on Form 8-K 13 SIGNATURES 13 PART I: Financial Information Item 1: Financial Statements EAGLES NEST MINING COMPANY (A Development Stage Company) FINANCIAL STATEMENTS March 31, 2002 and September 30, 2001 EAGLES NEST MINING COMPANY (A Development Stage Company) Balance Sheets <table> ASSETS -------- March 31, September 30, 2002 2001 ------------ ------------ (Unaudited) <s> <c> <c> CURRENT ASSETS Cash $ - $ - ------------ ------------ Total Current Assets - - ------------ ------------ TOTAL ASSETS $ - $ - ============ ============ The accompanying notes are an integral part of these financial statements. </table> EAGLES NEST MINING COMPANY (A Development Stage Company) Balance Sheets (Continued) <table> LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) ------------------------------------------------ March 31, September 30, 2002 2001 ------------ ------------ (Unaudited) <s> <c> <c> CURRENT LIABILITIES Accounts payable $ 7,027 $ 2,000 Due to stockholder 11,390 10,047 ------------ ------------ Total Current Liabilities 18,417 12,047 ------------ ------------ COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY (DEFICIT) Common stock at; $0.001 par value; 100,000,000 shares authorized 17,408,750 shares issued and outstanding 17,409 17,409 Additional paid-in capital 18,311 18,311 Deficit accumulated during the development stage (54,137) (47,767) ------------ ------------ Total Stockholders' Equity (Deficit) (18,417) (12,047) ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ - $ - ============ ============ The accompanying notes are an integral part of these financial statements. </table> EAGLES NEST MINING COMPANY (A Development Stage Company) Statements of Operations (Unaudited) <table> For Three For Six From Months Ended Months Ended Inception on March 31, March 31, September 14, 1987 -------------------- -------------------- to March 31, 2002 2001 2002 2001 2002 --------- --------- --------- --------- --------- <s> <c> <c> <c> <c> <c> REVENUES $ - $ - $ - $ - $ - EXPENSES 5,027 550 6,370 550 (49,479) --------- --------- --------- --------- --------- NET LOSS $ (5,027) $ (550) $ (6,370) $ (550) $ (49,479) ========= ========= ========= ========= ========= BASIC NET LOSS PER SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.00) ========= ========= ========= ========= Weighted Average Number of Shares Outstanding 17,408,750 1,392,700 17,408,750 1,392,700 ========= ========= ========== ========= The accompanying notes are an integral part of these financial statements. </table> EAGLES NEST MINING COMPANY (A Development Stage Company) Statements of Stockholders' Equity (Deficit) From Inception on September 14, 1987 through March 31, 2002 <table> Deficit Accumulated Common Stock Additional During the ---------------------- Paid In Development Shares Amount Capital Stage ---------- ---------- ---------- ---------- <s> <c> <c> <c> <c> Balance at inception on September 14, 1987 - $ - $ - $ - Common stock issued to directors, for services, on September 17, 1987, at $0.008 per share. 3,750,000 3,750 26,250 - Common stock issued for cash, on September 17, 1987, at $0.008 per share 27,500 28 192 - Common stock issued for cash, on January 12, 1988, at $0.008 per share 6,250 6 44 - Common stock issued to a director, for cash, on October 10, 1997, at $0.0004 per share 12,500,000 12,500 (7,500) - Common stock issued to directors, for services, on November 12, 1997, at $0.0004 per share 1,125,000 1,125 (675) - Net loss for the period from inception, on September 14, 1987, to September 30, 1999 - - - (37,470) --------- --------- --------- --------- Balance, September 30, 1999 17,408,750 17,409 18,311 (37,470) Net loss for the year ended September 30, 2000 - - - (3,200) --------- --------- --------- --------- Balance, September 30, 2000 17,408,750 $ 17,409 $ 18,311 $ (40,670) --------- --------- --------- --------- The accompanying notes are an integral part of these financial statements. </table> EAGLES NEST MINING COMPANY (A Development Stage Company) Statements of Stockholders' Equity (Deficit)(Continued) From Inception on September 14, 1987 through March 31, 2002 <table> Deficit Accumulated Additional During the Common Stock Paid In Development Shares Amount Capital Stage ---------- ---------- ---------- ---------- <s> <c> <c> <c> <c> Balance, September 30, 2000 17,408,750 $ 17,409 $ 18,311 $ (40,670) Net loss for the year ended September 30, 2001 - - - (7,097) --------- --------- --------- --------- Balance, September 30, 2001 17,408,750 $ 17,409 $ 18,311 $ (47,767) Net loss for the six months ended March 31, 2002 (Unaudited) - - - (6,370) --------- --------- --------- --------- Balance March 31, 2002 17,408,750 $ 17,409 $ 18,311 $ 54,137 ========= ========= ========= ========= </table> The accompanying notes are an integral part of these financial statements. EAGLES NEST MINING COMPANY (A Development Stage Company) Statements of Cash Flows (Unaudited) <table> From Inception on For the Three Months Ended September 14, March 31, 1987 Through -------------------------- March 31, 2002 2001 2002 ----------- ----------- ----------- <s> <c> <c> <c> CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (6,370) $ (550) $ (54,137) Adjustments to reconcile net loss to net cash (used) by operating activities: Stock issued for services - - 30,450 Changes in assets and liabilities: Increase(decrease)in accounts payable 5,027 550 7,027 ----------- ----------- ----------- Net Cash (Used) in Operating Activities (1,343) - (16,660) ----------- ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES - - - ----------- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Issuance of common stock for cash - - 5,270 Increase in accounts payable-related party 1,343 - 11,390 ----------- ----------- ----------- Net Cash Provided by Financing Activities 1,343 - 16,660 ----------- ----------- ----------- NET INCREASE (DECREASE) IN CASH - - - CASH AT BEGINNING OF PERIOD - - - ----------- ----------- ----------- CASH AT END OF PERIOD $ - $ - $ - =========== =========== =========== The accompanying notes are an integral part of these financial statements. </table> EAGLES NEST MINING COMPANY (A Development Stage Company) Notes to the Financial Statements March 31, 2002 and September 30, 2001 NOTE 1 - CONDENSED FINANCIAL STATEMENTS The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results and cash flows at March 31, 2002 and 2001 and for all periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's September 30, 2001 audited financial statements. The results of operations for periods ended March 31, 2002 and 2001 are not necessarily indicative of the operating results for the full years. NOTE 2 - GOING CONCERN The Company's financial statements are prepared using 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. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plans to obtain such resources for the Company include (1) obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses, and (2) seeking out and completing an agreement with an existing operating company. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Item 2 Management's Discussion and Analysis or Plan of Operation The following information should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this Form 10-QSB. The Company is considered a development stage company and presently has no assets or capital and no significant operations or income. The costs and expenses associated with the preparation and filing of its registration statement in 1999 and subsequent quarterly and annual reports have been paid for by a shareholder of the Company. It is anticipated that the Company will require only nominal capital to maintain the corporate viability of the Company and necessary funds will most likely be provided by the Company's officers and directors in the immediate future. However, unless the Company is able to facilitate an acquisition of or merger with an operating business or is able to obtain significant outside financing, there is substantial doubt about its ability to continue as a going concern. In the opinion of management, inflation has not and will not have a material effect on the operations of the Company until such time as the Company successfully completes an acquisition or merger. At that time, management will evaluate the possible effects of inflation on the Company related to it business and operations following a successful acquisition or merger. Plan of Operation During the next 12 months, the Company will actively seek out and investigate possible business opportunities with the intent to acquire or merge with one or more business ventures. Because the Company lacks funds, it may be necessary for the officers and directors to either advance funds to the Company or to accrue expenses until such time as a successful business consolidation can be made. Management intends to hold expenses to a minimum and to obtain services on a contingency basis when possible. Further, the Company's directors will defer any compensation until such time as an acquisition or merger can be accomplished and will strive to have the business opportunity provide their remuneration. However, if the Company engages outside advisors or consultants in its search for business opportunities, it may be necessary for the Company to attempt to raise additional funds. As of the date hereof, the Company has not made any arrangements or definitive agreements to use outside advisors or consultants or to raise any capital. In the event the Company does need to raise capital, most likely the only method available to the Company would be the private sale of its securities. Because of the nature of the Company as a development stage company, it is unlikely that it could make a public sale of securities or be able to borrow any significant sum from either a commercial or private lender. There can be no assurance that the Company will be able to obtain additional funding when and if needed, or that such funding, if available, can be obtained on terms acceptable to the Company. The Company does not intend to use any employees, with the possible exception of part-time clerical assistance on an as-needed basis. Outside advisors or consultants will be used only if they can be obtained for minimal cost or on a deferred payment basis. Management is confident that it will be able to operate in this manner and to continue its search for business opportunities during the next twelve months. Net Operating Loss The Company has accumulated approximately $23,700 of net operating loss carryforwards as of March 31, 2002, which may be offset against taxable income and income taxes in future years. The use of these losses to reduce future income taxes will depend on the generation of sufficient taxable income prior to the expiration of the net operating loss carryforwards. The carry-forwards expire in the year 2021. In the event of certain changes in control of the Company, there will be an annual limitation on the amount of net operating loss carryforwards which can be used. No tax benefit has been reported in the financial statements for the year ended September 30, 2001 because there is a 50% or greater chance that the carryforward will not be used. Accordingly, the potential tax benefit of the loss carryforward is offset by a valuation allowance of the same amount. Risk Factors and Cautionary Statements Forward-looking statements in this report are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The Company wishes to advise readers that actual results may differ substantially from such forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the statements, including, but not limited to, the following: the ability of the Company to search for appropriate business opportunities and subsequently acquire or merge with such entity, to meet its cash and working capital needs, the ability of the Company to maintain its existence as a viable entity, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. Recent Accounting Pronouncements In June 1998, the Financial Accounting Standards Board, or FASB, issued Statement of Financial Accounting Standards (SFAS) 133, Accounting for Derivative Instruments and Hedging Activities. The new standard establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires companies to record derivatives on the balance sheet as assets or liabilities, measured at fair value. Accounting for changes in the values of those derivatives depends on the intended use of the derivatives and whether they qualify for hedge accounting. SFAS 133, as amended by SFAS 137 and SFAS 138, was adopted as of April 1, 2001. Management believes the adoption of this statement will have no material impact on the Company's financial statements. In June 2001, the FASB issued SFAS 141, Business Combinations, and SFAS 142, Goodwill and Other Intangible Assets. SFAS 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001 as well as all purchase method business combinations completed after June 30, 2001. SFAS 141 also specifies criteria intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart from goodwill, noting that any purchase price allocatable to an assembled workforce may not be accounted for separately. SFAS 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of SFAS 142. SFAS 142 also requires that intangible assets with estimatable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of. The Company adopted SFAS 141 upon issuance and SFAS 142 effective April 1, 2001. The adoption of SFAS 141 and 142 did not affect the financial statements. On August 16, 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations, which is effective for fiscal years beginning after June 15, 2002. It requires that obligations associated with the retirement of a tangible long-lived asset be recorded as a liability when those obligations are incurred, with the amount of the liability initially measured at fair value. Upon initially recognizing an accrued retirement obligation, an entity must capitalize the cost by recognizing an increase in the carrying amount of the related long-lived asset. Over time, the liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, an entity either settles the obligation for its recorded amount or incurs a gain or loss upon settlement. Although management has not completed the process of determining the effect of this new accounting pronouncement, it currently expects that the effect of SFAS No. 143 the Company's financial statements, when it becomes effective, will not be significant. In October 2001, the FASB issued SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. Although SFAS 144 supersedes SFAS 121, it retains many of the fundamental provisions of SFAS 121. SFAS 144 also supersedes the accounting and reporting provisions of Accounting Principles Board Opinion No. 30, Reporting-the Results of Operations-Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions, for the disposal of a segment of a business. However, it retains the requirement in APB 30 to report separately discontinued operations and extends that reporting to a component of an entity that either has been disposed of, by sale, abandonment, or in a distribution to owners, or is classified as held for sale. SFAS 144 is effective for fiscal years beginning after December 15, 2001 and interim periods within those fiscal years. Management believes the adoption of SFAS 144 will not have a significant effect on the Company's financial statements. PART II Item 1. Legal Proceedings There are presently no material pending legal proceedings to which the Company or any of its subsidiaries is a party or to which any of its property is subject and, to the best of its knowledge, no such actions against the Company are contemplated or threatened. Item 2. Changes In Securities The Company has made an application to have its Common Stock traded in the over-the-counter market and quotations published on the OTC Bulletin Board. Its application has been finalized and a trading symbol has been assigned. The Company's trading symbol is EGNM. Item 3. Defaults Upon Senior Securities This Item is not applicable to the Company. Item 4. Submission of Matters to a Vote of Security Holders There were no matters submitted to a vote of the security holders during the three months ended March 31, 2002. Item 5. Other Information This Item is not applicable to the Company. Item 6. Exhibits and Reports on Form 8-K No report on Form 8-K was filed by the Company during the three month period ended March 31, 2002. SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. EAGLES NEST MINING COMPANY Date: May 14, 2002 By: /S/ J. Rockwell Smith ----------------------------------- J. Rockwell Smith C.E.O., President and Director Date: May 14, 2002 By: /S/ Jim Ruzicka ------------------------------------- Jim Ruzicka Secretary/Treasurer, and Director (Principal Accounting Officer)