Unassociated Document
UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C.
20549
SCHEDULE 14C
(RULE 14c-101)
SCHEDULE 14C
INFORMATION
INFORMATION STATEMENT PURSUANT TO
SECTION 14(c)
OF THE SECURITIES EXCHANGE ACT OF
1934
Check the appropriate
box:
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Preliminary information
statement
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Confidential, for Use of the
Commission Only (as permitted by Rule
14c-5(d)(2))
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o
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Definitive information
statement
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DOUBLE EAGLE HOLDINGS,
LTD.
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(NAME OF REGISTRANT AS SPECIFIED
IN ITS
CHARTER)
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Payment of Filing Fee (Check the
appropriate box):
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Fee computed on table below per
Exchange Act Rules 14c-5(g) and
0-11.
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to which transaction
applies:
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(2)
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Aggregate number of securities to
which transaction applies:
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(3)
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Per unit price or other underlying
value of transaction computed pursuant to Exchange Act Rule 0-11
(set forth the amount on which the filing fee is calculated and state
how it was determined):
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of transaction:
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Fee paid previously with
preliminary materials.
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Check box if any part of the fee
is offset as provided by Exchange Act Rule 0-11 (a) (2) and identify the
filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule
and the date of its filing.
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(1)
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Form, Schedule or Registration
Statement No.:
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DOUBLE EAGLE HOLDINGS,
LTD.
7633 E 63RD PLACE, SUITE 220
TULSA,
OK 74133
INFORMATION
STATEMENT
DECEMBER 15, 2008
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE
REQUESTED NOT TO SEND US A
PROXY
This information statement is being
provided on behalf of the board of directors (the "Board") of Double Eagle
Holdings, Ltd. (the "Company") to record holders of shares of our common stock
("Shareholders") as of the close of business on the record date of December 15,
2008. This information statement provides notice that the Board has
recommended, and holders of a majority of the voting power of our outstanding
common stock have voted, to approve the following items:
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PROPOSAL 1: Authorization to the
Board to withdraw the Company's election to be treated as a business
development company ("BDC") under the Investment Company Act of 1940, as
amended (the "1940 Act").
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This information statement describes, in
more detail, the action being taken and the circumstances surrounding the
Board's recommendation of the actions. The action will become effective as of
the filing of the Form N-54C by the Company with the Securities and Exchange
Commission (the "SEC").
The Company will bear the expenses
relating to this information statement, including expenses in connection with
preparing and mailing this information statement and all documents that now
accompany or may in the future supplement it.
Only one information statement is being
delivered to multiple shareholders sharing an address, unless the Company has
received contrary instructions from one or more of the shareholders. The Company
will undertake to deliver promptly upon written or oral request a separate copy
of the information statement to a shareholder at a shared address to which a
single copy of the information statement was delivered. You may make a written
or oral request by sending a written notification to the Company's principal
executive offices stating your name, your shared address and the address to
which the Company should direct the additional copy of the information statement
or by calling the Company's principal executive offices. If multiple
shareholders sharing an address have received one copy of this information
statement and would prefer the Company mail each shareholder a separate copy of
future mailings, you may send notification to or call the Company's principal
executive offices. Additionally, if current shareholders with a shared address
received multiple copies of this information statement and would prefer us to
mail one copy of future mailings to shareholders at the shared address,
notification of that request may also be made by mail or telephone call to the
Company's principal executive offices.
The information statement is being
provided to you for informational purposes only. Your vote is not required to
approve the action described above. This information statement does not relate
to an annual meeting or special meeting in lieu of an annual meeting. You are
not being asked to send a proxy and you are requested not to send one. The
approximate mailing date of this information statement is _______________.
We appreciate your continued interest in
Double Eagle Holdings, Ltd.
Very truly yours,
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/s/ M.E. “Hank”
Durschlag
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President, Chief Executive Officer
and
Chief Financial
Officer
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INFORMATION
STATEMENT
DOUBLE EAGLE HOLDINGS,
LTD.
7633 E 63RD PLACE, SUITE 220
TULSA,
OK 74133
BOARD MEETING
The Board of the Company determined that
it was in the best interest of the Company and its shareholders to withdraw
its election to be regulated as a business development company ("BDC")
under the Investment Company Act of 1940, as amended (the "1940 Act"). The holders
of a majority of the voting power of the Company's outstanding common stock
have voted to approve the recommendation of the Board. This information statement
is being provided to shareholders to inform them of the circumstances
surrounding and the reasons for the actions being taken.
PROPOSAL
On April 5, 2007, the Company filed a notification of
election to be regulated as a BDC under the 1940 Act on Form
N-54A. The Company elected BDC status intending to provide equity and debt
investment capital to fund growth, acquisitions and recapitalizations of
small market companies primarily located in the United
States.
At the time it became a BDC, the Company
determined that it was necessary to raise additional capital to carry out
the Company's business plan. Accordingly, from the time the Company became a BDC
to the present, the Company has conducted several offerings of shares of its
common stock pursuant to Regulation E under the Securities Act of 1933, as amended
(the "Securities Act"), and filed two offering circulars and related
notifications on Form 1-E with the Securities and Exchange Commission (the
"SEC"). The staff of the SEC (the
"SEC Staff") reviewed the Company's offering
circulars and related notification on Form 1-E and issued comment letters. As a result, the Company understands
that it may have been out of compliance with
certain of the rules and regulations under the 1940 Act relating to BDCs. The
SEC Staff also informed the Company that its Form 1-E filings failed to
include all of the information required to be communicated to potential
investors, including all of the financial statements required by Form
1-E, and that the Company failed to file reports on Form 2-E following each
Regulation E offering it conducted setting forth therein information regarding the
number of shares of common stock it sold in each such offering and other related
information. Subsequently, the Company filed reports on Form 2-E pertaining to its
only Regulation E offering
pursuant to which shares were sold.
Furthermore, the Company is not in
compliance with the following additional provisions of the 1940
Act:
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RULE 38a-1 UNDER THE 1940 ACT -
which requires the Company to adopt and implement written policies and
procedures reasonably designed to prevent violation of the federal
securities laws by the Company and the designation of a chief compliance officer to be
responsible for administration of policies and
procedures.
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Moreover, given that the Company has not
undertaken a detailed examination of its compliance with the 1940 Act, it is
possible that the Company may not be in compliance with other provisions of the
1940 Act.
The Board of Directors, including the
Directors who are not interested persons of the Company, reviewed the facts
surrounding these compliance failures and their implications for the Company.
Accordingly, after careful consideration of the 1940 Act requirements applicable to
BDCs, an evaluation of the Company's ability to operate as a going concern in
an investment company regulatory environment, the costs associated with
complying with the 1940 Act, the Company's past difficulty in complying
with the 1940 Act and a thorough assessment of potential alternative
business models, the Board has determined that continuation as a BDC is not in the
best interest of the Company and its shareholders at the present time. A
majority of the voting power of the Company's outstanding common stock has
voted to approve the recommendation of the Board, that the Company file a Form
N-54C and withdraw its election to be registered as a BDC. The Board will file
a Form N-54C to effect the withdrawal at such time as the Board determines
that it is in the best interest of the Company and its shareholders to do so.
As of the date hereof, the Board believes that the Company meets the requirements
for filing the notification to withdraw its election to be regulated as a
BDC.
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.
It is anticipated that the Company's
current executive officer and directors will continue in such capacities
following the Company's filing of the Form N-54C with the SEC.
To the extent that the Company violated
certain rules and regulations under the 1940 Act or the Securities Act, such
violations may cause the Company to incur certain liabilities. Importantly, the
filing of a Form N-54C in order to withdraw the Company's election to be
regulated as a BDC does not absolve the Company from liability with respect to
any such violations. Such liabilities cannot be estimated by management as of
this time. However, such liabilities, if incurred, could have a significant
impact on the Company's ability to continue as a going concern.
RISKS ASSOCIATED WITH THE WITHDRAWAL OF
ELECTION
TO BE REGULATED AS A
BDC
When the Company ceases to be a BDC, the
shareholders will lose certain protections, including the
following:
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The Company will no longer be
subject to the requirement that it maintain a ratio of assets to
senior securities of at least
200%;
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The Company will no longer be
prohibited from protecting director or officer against any liability to
the Company or Company's shareholders arising from willful malfeasance,
bad faith, gross negligence, or reckless disregard of the duties
involved the conduct of that person's office;
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The Company will no longer be
required to provide and maintain bond issued by a reputable fidelity
insurance company to protect against larceny and
embezzlement;
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The Company will no longer be
required to ensure that a majority the directors are persons who are not
"interested persons," as term is defined in Section 2(a)(19) of the
1940 Act, and persons that would be prevented from acting in the
capacity employee, officer or director of the Company if it were a BDC (as
persons convicted of certain malfeasance) will be able to on
the Company's board;
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The Company will no longer be
subject to provisions of the 1940 Act regulating transactions between
BDCs and certain affiliates restricting the Company's ability to issue
warrants and options;
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The Company will no longer be
prohibited from issuing its for
services;
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The Company will be able to change
the nature of its without having to obtain the approval of its
shareholders;
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The Company will no longer be
subject to provisions of the 1940 Act prohibiting the issuance of
securities at below net asset value book value;
and
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The Company will no longer be
required to disclose its net value per share on the face of its financial
statements.
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The Company will no longer be
subject to the other provisions protections set forth in Sections
55 through 64 of the 1940 Act and the rules and regulations promulgated
thereunder.
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However, the Board will still be subject
to customary principles of fiduciary duty under the Nevada General
Corporation Law with respect to the Company and its shareholders.
In addition, withdrawal of the Company's
election to be treated as a BDC will not affect the Company's registration
under Section 12(g) of the Securities Exchange Act of 1934 (the "Exchange
Act"). Under the Exchange Act, the Company is required to file periodic reports on
Form 10-K, Form 10-Q, Form 8-K, proxy statements and other reports required
under the Exchange Act.
EFFECT ON THE FINANCIAL STATEMENTS AND
TAX STATUS
The withdrawal of the Company's election
to be regulated as a BDC will result in a change in its method of accounting.
BDC financial statement presentation and accounting uses the value method of
accounting used by investment companies, which allows BDCs to value their
investments at value as opposed to historical cost. In addition, entities in which the
Company owns majority ownership stakes are not consolidated; rather,
investments in those entities are reflected on the balance sheet as an investment in a
majority-owned portfolio company at value. Currently the Company holds
loan and equity investments in five companies, two of which are majority
owned. The two majority owned companies will be consolidated with the
Company. One of the other investments will be carried at cost and the
other two investments will be carried as marketable equity securities and will
continue to have unrealized gains and losses recorded in the statement of
operations.
Operating companies use either the
fair-value or historical-cost methods of accounting for financial statement
presentation and accounting for securities held, depending on how the investment is
classified and how long the company intends to hold the investment. In
addition, operating companies consolidate the accounts of majority-owned
entities. Subsequent to the withdrawal of the
Company's election to be regulated as a BDC, the value of the Company's investments
in its two majority-owned entities would be eliminated and such entities'
financial accounts would be consolidated with those of the
Company.
The Company does not believe that
withdrawing its election to be regulated as a BDC will have any impact on its federal
income tax status, because the Company never elected to be treated as a
regulated investment
company under Subchapter
M of the Internal Revenue Code. Instead,
the Company has always been subject to corporate level federal income tax on
its income (without regard to any distributions it makes to
its shareholders) as a "regular" corporation
under Subchapter C of the Internal Revenue
Code.
INTEREST OF CERTAIN PERSONS IN MATTERS
TO BE ACTED UPON
Except in their capacity as shareholders
(which interest does not differ to that of other shareholders), none of the
Company's officers, directors, or any of their respective affiliates has any
interest in the withdrawal of the Company's election to be regulated as a
BDC.
VOTING SECURITIES AND PRINCIPAL HOLDERS
THEREOF
Although shareholders are not being
asked to approve or disapprove or otherwise vote on any matter discussed in this
information statement, the following generally describes voting rights of
shareholders.
As of the record date, December 15, 2008, there are 50,592,487 shares of common stock outstanding. Each share represents
one vote. There are currently no arrangements known to the Company, the
operation of which may result in a change in control of the
Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS
The following table indicates all
persons who, as of December
15, 2008, the
record date, are known by us to own
beneficially more than 5% of any class of our outstanding voting securities. As of
December 15,
2008, there were
50,592,487 shares of our common stock outstanding.
Except as otherwise indicated below, to the best of our knowledge, each person
named in the table has sole voting and investment power with respect to the
securities beneficially owned by them as set forth opposite their
name.
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Name and Address
of
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Amount and Nature
of
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Title of
Class
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Beneficial Owner
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Beneficial
Owner
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% of Class
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Common
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Adam Adler
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4,000,000 |
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7.91 |
% |
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Common
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Avenel Financial Group,
Inc.
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2,580,000 |
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5.10 |
% |
** The
address for each beneficial owner is in care of Double Eagle Holdings, Ltd.,
7633 E 63rd Place,
Suite 220, Tulsa, OK 74133.
SECURITY OWNERSHIP OF
MANAGEMENT
The following table indicates the
beneficial ownership of our voting securities of all Directors of the Company and all
Executive Officers who are not Directors of the Company, and all officers and
directors as a group, as of December 15, 2008 the record date. As of December 15, 2008, there were 50,592,487 shares of our common stock outstanding. The address of all officers
and directors is in care of the Company at 7633 E 63rd Place, Suite 220, Tulsa,
OK 74133.
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Name and Address
of
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Amount and Nature
of
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Title of
Class
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Beneficial
Owner
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Beneficial
Owner
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% of Class
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Common
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M.E. "Hank" Durschlag
(a)
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1,000,000 |
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1.98 |
% |
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Common
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Ross E. Silvey
(b)
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- |
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0.00 |
% |
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Common
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Erik S. Phillips
(b)
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- |
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0.00 |
% |
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Common
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All officers and directors
as
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1,000,000 |
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1.98 |
% |
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a Group (3
persons)
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(a)
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An "interested person" of the
Company, as such term is defined in Section 2(a)(19) of the 1940
Act.
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(b)
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Not an "interested person" of the
Company, as such term is defined in Section 2(a)(19) of the 1940
Act.
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SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Pursuant to Section 16(a) of the
Securities Exchange Act of 1934, the Company's directors and executive officers, and
any persons holding 10% or more of its common stock, are required to report
their beneficial ownership and any changes therein to the SEC and the Company.
Specific due dates for those reports have been established, and the Company has
been requested by the SEC to report herein any failure to file such reports by
those due dates. Based on the Company's review of such reports, the Company
believes M.E. “Hank”
Durschlag, its Chief
Executive Officer and President and a member of
its Board of Directors, Ross Silvey, a member of its Board of Directors,
and Erik S.
Phillips, a member of its
Board of
Directors, all failed to
timely file Form 3 and/or Form 4, as appropriate, with the
SEC. In December 2007, Messrs. Durschlag and Silvey filed their required Section
16(a) forms with the SEC and have now filed all reports
required to be filed with the SEC pursuant to Section 16(a) of the Securities Exchange
Act of 1934.
SHAREHOLDER
PROPOSALS
As a general matter, the Company does
not hold annual meetings of shareholders, and, therefore, the anticipated date of
a meeting of shareholders cannot be provided. Any shareholder proposal that
properly may be included in proxy solicitation materials for a meeting of
shareholders must be received by the Company a reasonable time prior to the
date voting instructions or proxy materials are mailed to
shareholders.
MORE INFORMATION
THE COMPANY WILL FURNISH, WITHOUT
CHARGE, A COPY OF ITS ANNUAL REPORT ON FORM 10-K AND ITS MOST RECENT QUARTERLY
REPORT ON FORM 10-Q TO A SHAREHOLDER, UPON REQUEST TO M.E. “HANK” DURSCHLAG, 7633 E
63RD PLACE, SUITE 220, TULSA,
OK 74133 OR BY
CALLING 918-461-1667, BY FIRST CLASS MAIL, WITHIN THREE
BUSINESS DAYS OF RECEIPT OF THE
REQUEST.
INQUIRIES
Shareholders may make inquiries by
contacting M.E. “Hank”
Durschlag at 918-461-1667.