Fuse Science, Inc. - Quarter Report: 2008 December (Form 10-Q)

Unassociated Document

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

For Quarter Ended: December 31, 2008

Commission File Number: 814-00742

DOUBLE EAGLE HOLDINGS, LTD.

(Exact name of small business issuer as specified in its charter)

NEVADA		87-0460247
(State or other jurisdiction of		(IRS Employer
incorporation or organization)		Identification No.)

7633 E 63RD PLACE, SUITE 220, TULSA, OK 74133

(Address of principal executive office)

(918) 461-1667

(Issuer's telephone number)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer x Smaller reporting company ¨.

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

The number of shares outstanding of registrant's common stock, par value $0.001 per share, as of December 31, 2008 was 50,925,820.

DOUBLE EAGLE HOLDINGS, LTD.

INDEX

		Page
		No.

Part I	Financial Information	3

Item 1:	Condensed Financial Statements	3

	Statements of Net Assets as of December 31, 2008 and September 30, 2008	3
	Statements of Operations – For the Three Months Ended December 31, 2008 and 2007	4
	Statements of Cash Flows – For the Three Months Ended December 31, 2008 and 2007	5
	Statements of Changes in Net Assets – For the Three Months Ended December 31, 2008 and 2007	6
	Financial Highlights - For the Three Months Ended December 31, 2008 and 2007	7
	Schedule of Investments as of December 31, 2008 and September 30, 2008	8
	Notes to Financial Statements	10
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3:	Quantitative and Qualitative Disclosure about Market Risk	17
Item 4:	Controls and Procedures	17

Part II	Other Information	18

Item 1:	Legal Proceedings	18
Item 1A:	Risk Factors	18
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3:	Defaults Upon Senior Securities	18
Item 4:	Submission of Matters to a Vote of Security Holders	18
Item 5:	Other Information	18
Item 6:	Exhibits	18
Signatures		19
Exhibits

PART 1: FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

DOUBLE EAGLE HOLDINGS, LTD.

Condensed Statements of Net Assets

December 31, 2008 and September 30, 2008

	December 31,			September 30,
	2008			2008
	(Unaudited)
ASSETS
Investments in portfolio companies:
Unaffiliated issuers (cost $404,953 at December 31, 2008 and at
September 30, 2008)	$	368,923		$	575,923
Affiliated issuers (cost $507,922 at December 31, 2008 and $496,422 at
September 30, 2008)		379,922			368,422
Total investments		748,845			944,345
Cash and cash equivalents		5,729			10,570
Accounts receivable - portfolio companies		84,373			57,970
TOTAL ASSETS		838,947			1,012,885
LIABILITIES
Accounts payable		35,441			21,839
Accrued expenses		-			166
Advance from shareholder		25,000			20,000
TOTAL CURRENT LIABILITIES		60,441			42,005
NET ASSETS	$	778,506		$	970,880

Commitments and contingencies

COMPOSITION OF NET ASSETS:
Common stock, $.001 par value; authorized 100,000,000 shares; 50,925,820
shares and 50,592,487 shares issued and outstanding at December 31, 2008
and September 30, 2008, respectively	$	50,926		$	50,592
Additional paid-in capital		9,946,023			9,936,356
Accumulated deficit:
Accumulated net operating loss		(9,059,413	)		(9,064,038	)
Net realized gain (loss) on investments		5,000			5,000
Net unrealized appreciation (depreciation) of investments		(164,030	)		42,970
NET ASSETS	$	778,506		$	970,880

NET ASSET VALUE PER SHARE	$	0.0153		$	0.1523

See accompanying notes to condensed financial statements.

DOUBLE EAGLE HOLDINGS, LTD.

Condensed Statements of Operations

Three Months Ended December 31, 2008 and 2007

(Unaudited)

	2008			2007
Income from operations:
Management income:
Affiliate	$	15,000		$	-
Non-affiliate		7,500			-
		22,500			-
Interest income:
Affiliate		2,839			100
Non-affiliate		4,162			1,513
		7,001			1,613
Total income		29,501			1,613
Expenses:
Officer and employee compensation and benefits		6,000			1,500
Professional fees		14,000			55,140
Shareholder services and communications		1,832			2,457
Director fees		3,000			1,000
Other general and administrative expense		44			1,973
		24,876			62,070
Loss before income taxes and realized and unrealized losses		4,625			(60,457	)
Income taxes		-			-
Loss from operations		4,625			(60,457	)

Net realized and unrealized gains (losses):
Net realized gain (loss) on investments, net of income taxes
of $0		-			-
Change in unrealized appreciation (depreciation) of portfolio
investments, net of deferred income taxes of $0		(207,000	)		(43,125	)
Net realized and unrealized gains (losses)		(207,000	)		(43,125	)
Net increase (decrease) in net assets from operations	$	(202,375	)	$	(103,582	)

Net increase (decrease) in net assets from operations
per share, basic and diluted	$	(0.0040	)	$	(0.0087	)

Weighted average shares outstanding		50,795,385			11,876,691

See accompanying notes to condensed financial statements.

DOUBLE EAGLE HOLDINGS, LTD.

Condensed Statements of Cash Flows

Three Months Ended December 31, 2008 and 2007

(Unaudited)

	2008			2007
Operating activities:
Net increase (decrease) in net assets from operations	$	(202,375	)	$	(103,582	)
Adjustments to reconcile net increase (decrease) in net assets
from operations to net cash used in operating activities:
Change in unrealized (appreciation) depreciation of
portfolio investments		207,000			43,125
Investments in portfolio companies		(11,500	)		(142,477	)
Changes in operating assets and liabilities:
Accounts receivable from portfolio companies		(26,403	)		(1,613	)
Accounts payable and accrued expenses		13,436			31,632
Net cash used in operating activities		(19,842	)		(172,915	)
Investing activities:
Net cash used in investing activities		-			-
Financing activities:
Common stock issued for cash		10,000			359,500
Loan from shareholder		5,000			-
Net cash used in investing activities		15,000			359,500
Net increase (decrease) in cash and cash equivalents		(4,842	)		186,585
Cash and cash equivalents, beginning of period		10,570			8,350
Cash and cash equivalents, end of period	$	5,728		$	194,935

Supplemental Cash Flow Information:
Cash paid for interest and income taxes:
Interest	$	-		$	-
Income taxes		-			-

Non-cash investing and financing activities:
Common stock issued to acquire investment		-			320,000
Common stock issued for stock subscription receivable		-			6,000

See accompanying notes to condensed financial statements.

DOUBLE EAGLE HOLDINGS, LTD.

Condensed Statements of Changes in Net Assets

Three Months Ended December 31, 2008 and 2007

(Unaudited)

	2008			2007
Changes in net assets from operations:
Net earnings (loss) from operations	$	4,625		$	(60,457	)
Net realized gain (loss) on sale of investments, net		-			-
Change in net unrealized appreciation (depreciation)
of investments, net		(207,000	)		(43,125	)
Net increase (decrease) in net assets from operations		(202,375	)		(103,582	)

Capital stock transactions:
Common stock sold for cash		10,000			359,500
Rounding		1			-
Common stock issued for investment		-			320,000
Net increase in net assets from stock transactions		10,001			679,500
Net increase in net assets		(192,374	)		575,918
Net assets (liabilities), beginning of period		970,880			(185,282	)
Net assets, end of period	$	778,506		$	390,636

See accompanying notes to condensed financial statements.

DOUBLE EAGLE HOLDINGS, LTD.

Financial Highlights

Three Months Ended December 31, 2008 and 2007

(Unaudited)

	2008			2007

PER SHARE INFORMATION
Net asset (liability) value, beginning of period	$	0.0192		$	(0.0291	)
Net increase (decrease) from operations		0.0001			(0.0051	)
Net change in realized gains (losses) and unrealized
appreciation (depreciation) of investments, net		(0.0041	)		(0.0036	)
Net increase (decrease) from stock transactions		0.0001			0.0572
Net asset value, end of period	$	0.0153		$	0.0194

Per share market value:
Beginning of period	$	0.04		$	0.12
End of period		0.10			0.23
Investment return, based on change in market price
during the period (1)		150.0	%		91.7	%

RATIOS/SUPPLEMENTAL DATA
Net assets (liabilities), end of period	$	778,506		$	390,636
Average net assets (liabilities)		925,614			56,376
Annualized ratio of expenses to average net assets		10.8	%		440.00	%
Annualized ratio of net increase (decrease) in net assets from
operations to average net assets		-87.5	%		-735.00	%
Shares outstanding at end of period		50,925,820			20,085,821
Weighted average shares outstanding during period		50,795,385			11,876,691

(1) Periods of less than one year are not annualized

See accompanying notes to condensed financial statements.

Double Eagle Holdings, Ltd.

Schedules of Investments

As of December 31, 2008

							Percent
Shares/	Quarter		Original		Fair		Net
Interest	Acquired		Cost		Value		Assets

UNAFFILIATED PORTFOLIO INVESTMENTS

NON-INCOME PRODUCING INVESTMENTS
750,000	Mar-07	EffTec International, Inc. (Pink Sheets:EFFI);	$	125,000	$	45,000		6	%
	Jun-07	EffTec has developed an Internet-based chiller
		tool which it is installing and selling to its customer
		base
500	Jul-08	Alt Energy, Inc. (private) oil and gas development and
		production company		24,500		24,500		3	%
150,000	Jul-08	North American Energy Resources, Inc. (OTCBB:NAEN)
		Oil and gas development and production company		35,529		79,500		10	%

				185,029		149,000		19	%
LOAN INVESTMENTS
Loan	Sep-07	Line of credit with EffTec International, Inc. with		51,500		51,500		7	%
	Dec-07	interest at 12%; due September 30, 2008; EffTec has
		developed and sells an Internet-based chiller tool
Loan	Dec-07	Line of credit with ZATSO, LLC (private) with interest
		at 6%; due September 30, 2009; Zatso is an Internet
		based game developer		168,423		168,423		22	%
				219,923		219,923		29	%
		Total unaffiliated portfolio investments		404,952		368,923		48	%

AFFILIATED PORTFOLIO INVESTMENTS
	Dec-07	Ultimate Social Network, Inc. (private); Ultimate owns
		The Ultimate College Model contest website. The
		contest allows men and women enrolled in college to
		post their pictures and enter a weekly modeling
		contest. Members participate by rating contestants.
60,000 [60%]		Stock investment		320,000		192,000		25	%
Loan		6% line-of-credit due September 30, 2009		187,922		187,922		24	%
		Total affiliated portfolio investments		507,922		379,922		49	%

		Total investments at December 31, 2008	$	912,874		748,845		97	%
		Cash and other assets, less liabilities				29,661		4	%
		Net assets at December 31, 2008			$	778,506		101	%

See accompanying notes to financial statements.

Double Eagle Holdings, Ltd.

Schedules of Investments

As of September 30, 2008

							Percent
Shares/	Quarter		Original		Fair		Net
Interest	Acquired		Cost		Value		Assets

UNAFFILIATED PORTFOLIO INVESTMENTS

NON-INCOME PRODUCING INVESTMENTS
750,000	Mar-07	EffTec International, Inc. (Pink Sheets:EFFI);	$	125,000	$	16,500		2	%
	Jun-07	EffTec has developed an Internet-based chiller
		tool which it is installing and selling to its customer
		base
500	Jul-08	Alt Energy, Inc. (private) oil and gas development and
		production company		24,500		24,500		3	%
150,000	Jul-08	North American Energy Resources, Inc. (OTCBB:NAEN)
		Oil and gas development and production company		35,529		315,000		32	%

				185,029		356,000		37	%
LOAN INVESTMENTS
Loan	Sep-07	Line of credit with EffTec International, Inc. with		51,500		51,500		5	%
	Dec-07	interest at 12%; due September 30, 2008; EffTec has
		developed and sells an Internet-based chiller tool
Loan	Dec-07	Line of credit with ZATSO, LLC (private) with interest
		at 6%; due September 30, 2009; Zatso is an Internet
		based game developer		168,423		168,423		17	%
				219,923		219,923		22	%
		Total unaffiliated portfolio investments		404,952		575,923		59	%

AFFILIATED PORTFOLIO INVESTMENTS
	Dec-07	Ultimate Social Network, Inc. (private); Ultimate owns
		The Ultimate College Model contest website. The
		contest allows men and women enrolled in college to
		post their pictures and enter a weekly modeling
		contest. Members participate by rating contestants.
60,000 [60%]		Stock investment		320,000		192,000		20	%
Loan		6% line-of-credit due September 30, 2009		176,422		176,422		18	%
		Total affiliated portfolio investments		496,422		368,422		38	%

		Total investments at September 30, 2008	$	901,374		944,345		97	%
		Cash and other assets, less liabilities				26,535		3	%
		Net assets at September 30, 2008			$	970,880		100	%

See accompanying notes to financial statements.

DOUBLE EAGLE HOLDINGS, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1: ORGANIZATION

HISTORY OF BUSINESS

Double Eagle Holdings, Ltd. (the “Company”) was originally incorporated in 1985 in Nevada. Its securities now trade on the Over-The-Counter Bulletin Board under the symbol DEGH.

Double Eagle Holdings, Ltd. filed a notification under Form N54a with the U.S. Securities and Exchange Commission, (the “SEC”) on April 5, 2007, indicating its election to be regulated as a business development company (a “BDC”) under the Investment Company Act of 1940 (the “1940 Act”). Accordingly, commencing with the Form 10-Q for June 30, 2007, the Company began filing as a BDC.

On January 20, 2009, the Company filed a notification under Form N54C with the SEC indicating its election to withdraw from being regulated as a BDC under the 1940 Act. Accordingly, commencing with the quarterly report for the quarter ending March 31, 2009, the Company will file as an operating company and will file consolidated financial reports with its majority owned subsidiaries.

BASIS OF PRESENTATION

The financial statements included herein at December 31, 2008 and September 30, 2008 and for the three months ended December 31, 2008 and 2007, include the accounts of the Company.

The financial statements included in this report have been prepared by the Company pursuant to the rules and regulations of the SEC for interim reporting and include all adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation. These financial statements have not been audited.

Although the nature of the Company’s operations and its reported financial position, results of operations, and its cash flows are dissimilar for the periods prior to and subsequent to its becoming an investment company, its financial position as of December 31, 2008 and September 30, 2008 and its operating results, cash flows and changes in net assets for the three months ended December 31, 2008 and 2007 are presented in the accompanying financial statements pursuant to Article 6 of Regulation S-X. In addition, the accompanying footnotes, although different in nature as to the required disclosures and information reported therein, are also presented as they relate to each of the above referenced periods.

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 for interim reporting. The Company believes that the disclosures contained herein are adequate to make the information presented not misleading. However, these financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report for the year ended September 30, 2008, which is included in the Company's Form 10-K for the year ended September 30, 2008. The financial data for the interim periods presented may not necessarily reflect the results to be anticipated for the complete fiscal year.

The operating results for the three months ended December 31, 2008 and 2007, reflects the Company’s results as a BDC under the 1940 Act.

GOING CONCERN

The Company has not established sources of revenue sufficient to fund the development of business, projected operating expenses and commitments for the next twelve months. The Company had earnings from operations of $4,625 and recognized an unrealized loss on investments of $207,000 during the three months ended December 31, 2008. At December 31, 2008, current assets, excluding investments, are $90,102, of which $84,373 is accounts receivable for management fees and accrued interest from portfolio companies. Current liabilities are $60,441.

The Company expects to raise necessary capital from the private placement of its restricted common stock. The Company has demonstrated an ability to raise funds as needed to fund operations and investments to complete its business plan. However, there can be no assurance that the planned sale of common stock will provide sufficient funding to develop the Company’s current business plan.

These conditions raise some doubt about the Company’s ability to continue as a going concern. However, the funds raised to date substantially eliminate the likelihood that the Company will not continue as a going concern.

BUSINESS DEVELOPMENT COMPANY

Double Eagle Holdings, Inc. filed a notification under Form N54a with the SEC on April 5, 2007, indicating its election to be regulated as a BDC under the 1940 Act. Accordingly, commencing with the Form 10-Q for June 30, 2007, the Company began filing as a BDC. In connection with this election, the Company adopted corporate resolutions and operated as a closed-end management investment company as a BDC. Under this election, the Company was organized to provide investors with the opportunity to participate, with a modest amount in venture capital, in investments that are generally not available to the public and that typically require substantially larger financial commitments. In addition, the Company provided professional management and administration that might otherwise be unavailable to investors if they were to engage directly in venture capital investing. The Company decided to be regulated as a BDC under the 1940 Act, and operated as a non-diversified company as that term is defined in Section 5(b)(2) of the 1940 Act. The Company at all times conducted its business so as to retain its status as a BDC. The Company may not change the nature of its business so as to cease to be, or withdraw its election as, a BDC without the approval of the holders of a majority of its outstanding voting stock as defined under the 1940 Act.

With the approval of a majority of its outstanding voting stock, the Company elected to cease being regulated as a BDC under the 1940 Act and filed Form N54C on January 20, 2009 to withdraw its election.

FISCAL YEAR

Fiscal 2009 refers to periods in the year ending September 30, 2009. Fiscal 2008 refers to periods in the year ended September 30, 2008.

NOTE 2: INVESTMENTS

VALUATION OF INVESTMENTS

As required by the SEC's Accounting Series Release ("ASR") 118, the investment committee of the Company is required to assign a fair value to all investments. To comply with Section 2(a) (41) and Rule 2a-4 under the 1940 Act, it is incumbent upon the Board of Directors to satisfy themselves that all appropriate factors relevant to the value of securities for which market quotations are not readily available have been considered and to determine the method of arriving at the fair value of each such security. To the extent considered necessary, the Board of Directors may appoint persons to assist them in the determination of such value and to make the actual calculations pursuant to the Board of Directors’ direction. The Board of Directors must also, consistent with this responsibility, continuously review the appropriateness of the method used in valuing each issue of security in the Company's portfolio. The Directors must recognize their responsibilities in this matter and whenever technical assistance is requested from individuals who are not Directors, the findings of such individuals must be carefully reviewed by the Directors in order to satisfy themselves that the resulting valuations are fair.

The Company’s Board of Directors has valued its investments as follows at December 31, 2008:

UNAFFILIATED PORTFOLIO INVESTMENTS

EffTec International, Inc. (EFFI) has developed Internet-based software for chillers which monitors chiller operating data, calculates performance, diagnoses the cause of chiller inefficiencies, notifies plant contacts when problems occur and recommends corrective action when necessary. The Company currently owns 750,000 shares with a cost of $125,000. Based on the closing price on December 31, 2008, the Board of Directors has valued the investment at $45,000.

On April 1, 2008, the Company amended its line-of-credit with EFFI. The amended line of credit has an interest rate of 12% and a balance of $51,500 at December 31, 2008, and is convertible into EFFI common stock. The Board of Directors has valued this investment at $51,500.

Alt Energy, Inc. (Private) is an oil and gas development and production company with operations in northeastern Oklahoma. The Company issued 500,000 shares of its common stock to acquire 500 shares (5%) of Alt. At the time of the transaction, the Company’s shares were valued at $24,500. The Board of Directors has valued this recent investment at its cost of $24,500 at December 31, 2008.

North American Energy Resources, Inc. (OTCBB: NAEN) is an oil and gas development and production company with operations in northeastern Oklahoma. Our investment came from converting our note receivable and accrued interest in the total amount of $35,529 from Signature Energy, Inc. into 150,000 shares of NAEN. NAEN acquired Signature at the end of July 2008. The Board of Directors has valued the stock at the closing price on December 31, 2008 of $79,500.

The Company has a 6% line-of-credit with ZATSO, LLC with a balance of $168,423 at December 31, 2008. ZATSO is an Internet based game developer. The Board of Directors has valued this investment at $168,423 at December 31, 2008.

AFFILIATED PORTFOLIO INVESTMENTS

The Company acquired 60,000 shares (60%) of Ultimate Social Network, Inc. (“USN”) in December 2007 in exchange for 6,400,000 shares of its common stock. The investment was valued at the price at which the Company was selling its shares pursuant to its 1-E of $0.05 per share. In addition the Company has a 6% line-of-credit with USN with a balance of $187,922 at December 31, 2008. USN presently owns “The Ultimate College Model” contest website which has been operating on a test basis since March 2007. The Ultimate College Model contest allows men and women that are enrolled in any college or university to post their pictures and enter into the weekly modeling contest. People that join as members of the website participate by rating the contestants and voting for their favorites. The website also allows for online chatting between members and contestants. The Board of Directors valued the stock at $192,000, a 40% discount to the initial cost, which is based on recent market activity, and the loan at its book value of $187,922, at December 31, 2008.

ITEM 2:

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD LOOKING STATEMENTS

From time to time, the Company may publish forward-looking statements relative to such matters as anticipated financial performance, business prospects, technological developments and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. All statements other than statements of historical fact included in this section or elsewhere in this report are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act of 1934. Important factors that could cause actual results to differ materially from those discussed in such forward-looking statements include: 1. General economic factors including, but not limited to, changes in interest rates and trends in disposable income; 2. Information and technological advances; 3. Competition; and 4. Success of marketing, advertising and promotional campaigns.

CRITICAL ACCOUNTING ESTIMATES AND POLICIES

Management's Discussion and Analysis of Financial Condition and Results of Operations discusses our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. On an on-going basis, we will evaluate our estimates and judgments, including those related to revenue recognition, valuation of investments in portfolio companies, accrued expenses, financing operations, contingencies and litigation. We will base our estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The most significant accounting estimates inherent in the preparation of our financial statements include estimates as to the appropriate carrying value of certain assets and liabilities which are not readily apparent from other sources, such as the investments in portfolio companies. These accounting policies are described at relevant sections in this discussion and analysis and in the "Notes to Financial Statements" included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2008.

PLAN OF OPERATION

On April 5, 2007, we filed a notification under Form N54a with the SEC indicating our election to be regulated as a BDC under the 1940 Act.

On January 20, 2009, we filed a notification under Form N54C with the SEC indicating our withdrawal of our election to be regulated as a BDC under the 1940 Act.

Subsequent to the filing of the Form N-54C with the SEC, the Company intends to pursue a business model whereby it would acquire majority ownership stakes in Internet development companies (the "New Business Model"). In this regard, the Company would remain active in its two majority owned Internet development companies, Ultimate Social Network, Inc. and Zatso, LLC.

Under the New Business Model, the Company will at all times conduct its activities in such a way that it will not be deemed an "investment company" subject to regulation under the 1940 Act. Thus, it will not hold itself out as being engaged primarily in the business of investing, reinvesting or trading in securities. In addition, the Company will conduct its business in such a manner as to ensure that it will at no time own or propose to acquire investment securities having a value exceeding 40 percent of the Company's total assets at any one time.

LIQUIDITY AND CAPITAL RESOURCES

During the three months ended December 31, 2008, net assets decreased to $778,506 from $970,880 at September 30, 2008. The primary reason for the decrease is the reduction in the value of our investment in North American Energy Resources, Inc.

Our withdrawal from being regulated and reporting as a BDC eliminates the availability of the 1-E to raise capital through sale of free trading common shares. We will need some capital in 2009 which we expect to raise through private placements of our restricted common stock.

RESULTS OF OPERATIONS

Comparison of three months ended December 31, 2008 and 2007 –

Revenues – We accrued interest income from our loan investments in the amount of $7,001 ($2,839 from an affiliate) during the three months ended December 31, 2008, and billed management fees of $22,500 ($15,000 from an affiliate) to portfolio companies. We had interest income in the prior year period of $1,613 ($100 from an affiliate).

Costs and expenses decreased from $62,070 in the fiscal 2008 period to $24,876 in the fiscal 2009 period. Professional fees declined $41,000, accounting for the majority of the difference.

The Company recognized unrealized depreciation of $207,000 and 43,125 on its portfolio company investments during fiscal 2009 and 2008, respectively.

Net Asset Value

As a BDC, certain of our activities and disclosures are made in reference to Net Asset Value (“NAV”) which is the value of our portfolio assets less debt and preferred stock. This may be viewed, simply and generalized, as the value of our assets available to our common stock holders. As of the date of the financial information in this report, the value of our portfolio of assets including investments and securities in portfolio companies and cash is $838,947 and from this, are subtracted liabilities and debts of $60,441. The preferred stock has been redeemed; accordingly, there is no amount to subtract for the rights of preferred shareholders. The NAV is therefore $778,506. The Net Asset Value per Share (“NAV/S”) is calculated by dividing the NAV by the number of common shares outstanding (50,925,820). The NAV/S is $0.0153.

Our Plan of Operation for the Next Twelve Months

Management’s Analysis of Business

Off Balance Sheet Arrangements

None.

Contractual Obligations

None.

ITEM 3:

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss arising from changes in market rates and prices. We are primarily exposed to equity price risk, which arises from exposure to securities that represent an ownership interest in our portfolio companies. The value of our equity securities and our other investments are based on quoted market prices or our Board of Directors’ good faith determination of their fair value (which is based, in part, on quoted market prices). Market prices of common equity securities, in general, are subject to fluctuations, which could cause the amount to be realized upon the sale or exercise of the instruments to differ significantly from the current reported value. The fluctuations may result from perceived changes in the underlying economic characteristics of our portfolio companies, the relative price of alternative investments, general market conditions and supply and demand imbalances for a particular security.

ITEM 4:

CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

The Company’s Chief Executive Officer has reviewed and evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 240.13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934) as of December 31, 2008. Based on that review and evaluation, which included inquiries made to certain other employees of the Company, the CEO concluded that the Company’s current disclosure controls and procedures, as designed and implemented, are effective in ensuring that information relating to the Company required to be disclosed in the reports the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, including insuring that such information is accumulated and communicated to the Company’s management, including the CEO, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in Internal Controls

There have been no significant changes in internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation described above, including any corrective actions with regard to significant deficiencies and material weaknesses.

PART II – OTHER INFORMATION

ITEM 1:

LEGAL PROCEEDINGS

None.

ITEM 1A:

RISK FACTORS

Not applicable.

ITEM 2:

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the three months ended December 31, 2008, we issued 333,333 shares of our restricted common stock in exchange for $10,000 in cash, in a private placement.

All of the shares issued were sold pursuant to an exemption from registration under Section 4(2) promulgated under the Securities Act of 1933, as amended.

ITEM 3:

DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4:

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

ITEM 5:

OTHER INFORMATION

We do not currently employ a Chief Financial Officer. Mr. M.E. Durschlag, Chief Executive Officer, also serves as Chief Financial Officer.

ITEM 6:

EXHIBITS

(a) EXHIBITS

31.1

Certification pursuant to 18 U.S.C. Section 1350 Section 302 of the Sarbanes-Oxley Act of 2002

32.1

Certification pursuant to 18 U.S.C. Section 1350 Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	DOUBLE EAGLE HOLDINGS, LTD.


February 12, 2009	By: /s/M.E. Durschlag
	M.E. Durschlag, President,
	Chief Executive Officer and
	Chief Financial Officer