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Harp & Eagle Ltd · 10QSB · For 6/30/02

Filed On 12/10/02 11:28am ET · SEC File 0-33353 · Accession Number 950134-2-15379

  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

12/10/02  Harp & Eagle Ltd                  10QSB       6/30/02    2:17                                     Bowne of Dallas I..01/FA

Quarterly Report -- Small Business · Form 10-QSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10QSB       Quarterly Report -- Small Business                    16     63K 
 2: EX-99.1     Certification of Ceo and Cfo                           1      6K

10QSB · Quarterly Report -- Small Business
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) Changes in Securities and Use of Proceeds Exhibits and Reports on Form 8-K Financial Statements (Unaudited) Management's Discussion and Analysis of Financial Condition and Results of Operations Other Information
1	1st Page
2	Item 1. Financial Statements (Unaudited)
11	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
13	Item 2. Changes in Securities and Use of Proceeds
"	Item 5. Other Information
"	Item 6. Exhibits and Reports on Form 8-K

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As filed with the Securities and Exchange Commission on December 10, 2002.
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 FORM 10-QSB

----------

(Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF              
 THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF  
 THE SECURITIES EXCHANGE ACT OF 1934

               For the transition period from ______ to ______

 COMMISSION FILE NO. 0-33353

HARP & EAGLE, LTD.
 (Exact name of small business issuer as specified in its charter)

         WISCONSIN                                      39-1980178
 (State or other jurisdiction of                        (I.R.S. Employer
    incorporation or organization)                      Identification Number)

1234 NORTH ASTOR STREET                                       
 MILWAUKEE, WISCONSIN                                    53202
(Address of principal executive offices)                       (Zip Code)       

(414) 272-5273
(Issuer's telephone number, including area code)

NOT APPLICABLE
(Former name, former address and former fiscal year, if 
changed since last report)

----------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 [ ]

As of November 30, 2002, 717,766 shares of the small business issuer's common 
stock, par value $0.0001 per share, were outstanding. 

 Transitional Small Business Disclosure Format (Check One:) Yes [ ] No [X]

================================================================================

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 PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)                                       

Consolidated Balance Sheets                         

Consolidated Statements of Operations               

      Consolidated Statements of Changes in Stockholders' Equity

Consolidated Statements of Cash Flows               

Notes to Consolidated Financial Statements          

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HARP & EAGLE, LTD. AND SUBSIDIARIES 

 Consolidated Balance Sheets

                                                        [Enlarge/Download Table]

                                                           (Unaudited)                    
                                                          June 30, 2002  December 31, 2001
                                                          -------------  -----------------
     ASSETS                                                                               
Current assets                                                                            
                                                                                          
  Cash and cash equivalents                                 $  368,623       $  105,383   
  Accounts receivable                                                -            3,639   
  Due from related party                                        39,871           16,883   
  Inventory                                                     12,997           11,925   
  Prepaid expenses                                             116,213           25,106   
                                                            ----------       ----------   

Total current assets                                           537,704          162,936   
                                                            ----------       ----------   
Property and equipment                                                                    
  Land                                                         214,464          218,750   
  Buildings and improvements                                 1,266,951        1,006,709   
  Furniture, fixtures and equipment                            311,964          351,448   
                                                            ----------       ----------   

                                                             1,793,379        1,576,907   
  Less accumulated depreciation                                195,487          160,255   
                                                            ----------       ----------   

Net property and equipment                                   1,597,892        1,416,652   
                                                            ----------       ----------   
Other assets                                                                              
  Goodwill, net of accumulated amortization of $3,537 at                                  
    June 30,2002 and $3,101 at December 31,2001                 13,901           14,337   
  Amounts receivable from shareholder                           19,411           19,411   
  Costs of issuing stock                                             -          201,396   
  Deferred tax asset                                            13,500           25,000   
  Investment in affiliated company                             330,350          326,300   
                                                            ----------       ----------   

Total other assets                                             377,162          586,444   
                                                            ----------       ----------   

                                                            $2,512,758       $2,166,032   
                                                            ==========       ==========   

See notes to consolidated financial statements                                  

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                                                                [Download Table]

                                            (Unaudited)                    
                                           June 30, 2002  December 31, 2001
                                           -------------  -----------------
     LIABILITIES AND                                                       
       STOCKHOLDERS' EQUITY                                                
                                                                           
Current liabilities                                                        
  Notes payable - related parties           $    50,000       $   112,700  
  Notes payable - other                               -            33,000  
  Current maturities of long-term debt          375,220           371,252  
  Accounts payable                               66,540           152,910  
  Accrued liabilities:                                                     
    Interest                                     19,400            17,135  
    Other                                        66,912            71,420  
  Customer deposits                             350,080           123,134  
                                            -----------       -----------  

Total current liabilities                       928,152           881,551  

Long-term debt, less current maturities         548,182           508,102  
                                            -----------       -----------  

Total liabilities                             1,476,334         1,389,653  
                                            -----------       -----------  

Commitments and contingencies                                              

Stockholders' equity                                                       
  Preferred stock                                     -                 -  
  Common stock                                      215               195  
  Additional paid-in capital                  1,277,446         1,185,175  
  Retained earnings (accumulated deficit)      (179,095)         (212,556) 
  Foreign currency translation adjustment       (62,142)         (196,435) 
                                            -----------       -----------  

Total stockholders' equity                    1,036,424           776,379  
                                            -----------       -----------  

                                            $ 2,512,758       $ 2,166,032  
                                            ===========       ===========  

See notes to consolidated financial statements. 

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HARP & EAGLE, LTD. AND SUBSIDIARIES 

 Consolidated Statements of Operations

                                                        [Enlarge/Download Table]


                                                    (Unaudited)                   (Unaudited)           
                                            Three months ended June 30,     Six months ended June 30,   
                                             2002                 2001       2002                2001   
                                             ----                 ----       ----                ----   

                                                                                                        
Sales                                     $ 383,802           $ 468,662   $ 635,735           $ 678,159 

Cost of sales                                60,409              32,936     104,667              54,610 

Operating expenses                          278,323             374,755     457,559             562,341 
                                          ---------           ---------   ---------           --------- 

Income from operations                       45,070              60,971      73,509              61,208 
                                          ---------           ---------   ---------           --------- 

Other income (expense)                                                                                  
  Interest income                             1,225                 957       1,676               4,302 
  Interest expense                          (13,853)            (17,616)    (30,224)            (34,327)
                                          ---------           ---------   ---------           --------- 

Other expense, net                          (12,628)            (16,659)    (28,548)            (30,025)
                                          ---------           ---------   ---------           --------- 

Income before provision for income taxes     32,442              44,312      44,961              31,183 

Income tax expense                            8,500               3,897      11,500                 391 
                                          ---------           ---------   ---------           --------- 

Net income                                $  23,942           $  40,415   $  33,461           $  30,786 
                                          =========           =========   =========           ========= 

Net income per common share               $    0.03           $    0.08   $    0.05           $    0.06 


See notes to consolidated financial statements.                                 

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HARP & EAGLE, LTD. AND SUBSIDIARIES 

Consolidated Statements of Changes in Stockholders' Equity (Unaudited)

                                                        [Enlarge/Download Table]


                                                                Common                    
                                               Preferred        Shares          Common    
                                                 Stock        Outstanding       Stock     
                                             --------------  ---------------  ------------
                                                                                          
Balance December 31, 200l                    $          -    $     649,661    $      195  

  Issuance of stock offering                            -           68,105            20  

  Comprehensive income:                                                                   
    Net income                                          -                -             -  
    Foreign currency translation adjustment             -                -             -  
                                             --------------  ---------------  ------------
  Total comprehensive income                                                              

Balance June 30,2002                         $          -    $     717,766    $      215  
                                             ==============  ===============  ============


Common stock-par value of $.0003; 10,000,000 shares authorized, 717,766 and     
 649,661 shares issued and outstanding at June 30, 2002 and December 31, 2001,
respectively.                                                               
Preferred stock - 2,000,OOO shares authorized, no shares have been issued.      

See notes to consolidated financial statements.                                 

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                                                                [Download Table]

                                 Retained        Accumulated                
 Additional        Stock         earnings/          Other                   
  Paid-In      Subscriptions   (Accumulated    Comprehensive                
  Capital       Receivable       Deficit)            Loss            Total  
----------     ------------    ------------    --------------     ----------
                                                                            
$1,185,175       $      -       $ (212,556)      $ (196,435)      $  776,379
                                                                  ----------

    92,211                                                            92,291
                                                                  ----------

         -              -           33,461                            33,461
         -              -                -          134,293          134,293
----------       --------       ----------       ----------       ----------
                                                                     167,754
                                                                  ----------

$1,277,446       $      -       $ (179,095)      $  (62,142)      $1,036,424
==========       ========       ==========       ==========       ==========

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HARP & EAGLE, LTD. AND SUBSIDIARIES 

 Consolidated Statements of Cash Flows

                                                        [Enlarge/Download Table]

                                                              (Unaudited)            
                                                     Six months ended June 30,2002   
                                                     2002                     2001   
                                                  ---------                --------- 
                                                                                     
Operating activities                                                                 
  Net income                                      $  33,461                $  30,786 
  Adjustments to reconcile net income to net                                         
   cash provided (used) by operating activities:                                     
     Amortization of goodwill                           436                      581 
     Depreciation                                    34,966                   16,268 
     Deferred tax expense                            11,500                        - 
     Noncash compensation of officer                      -                      900 
     Decrease (increase) in                                                          
       Accounts receivable                            3,639                     (863)
       Inventory                                     (1,072)                  (5,850)
       Prepaid expenses                             (91,107)                 (62,385)
     Increase (decrease) in:                                                         
       Accounts payable                              86,370                   16,929 
       Accrued liabilities                           (2,243)                 (77,184)
       Customer deposits                            226,946                   30,493 
                                                  ---------                --------- 
Net cash provided (used) by                                                          
  operating activities                              130,156                  (84,183)
                                                  ---------                --------- 

Investing activities                                                                 
  Purchases of property and                                                          
   equipment                                        (45,054)                (201,048)
  Investment in unconsolidated subsidiary            (4,050)                       - 
  Decrease in amounts receivable                                                     
   from shareholder                                 (85,688)                       - 
                                                  ---------                --------- 
  Net cash used for investing                                                        
   activities                                      (134,792)                (201,048)
                                                  ---------                --------- 

See notes to consolidated financial statements.                                 

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 HARP & EAGLE, LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows, Continued

                                                        [Enlarge/Download Table]

                                                          (Unaudited)                
                                                 Six months ended June 30,2002       
                                                2002                       2001      
                                           --------------             -------------- 
                                                                                     
Financing activities                                                                 
  Proceeds from long term debt             $           -               $     248,577 
  Retirement of long term debt                    (64,770)                   (42,700)
  Issuance of common stock                        344,442                          - 
  Costs of issuing stock                          (50,755)                   (39,573)
                                           --------------             -------------- 

Net cash provided by financing activities         228,917                    166,304 
                                           --------------             -------------- 
Effect of exchange rate changes                                                      
  on cash                                          38,960                    (17,848)
                                           --------------             -------------- 
Cash and cash equivalents                                                            
  Net increase (decrease)                         263,240                   (136,775)
  Beginning of period                             105,383                    260,485 
                                           --------------             -------------- 

  End of period                            $      368,623             $      123,710 
                                           ==============             ============== 

Supplemental cash flow information                                                   
  Cash paid for interest                   $       27,959             $       82,433 

  Cash paid for taxes                      $            -             $            - 

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HARP & EAGLE, LTD. AND SUBSIDIARIES 

Notes to Consolidated Financial Statements

Notes 1-Basis of presentation                                                   

In management's opinion, the financial information, which is unaudited, reflects
all adjustments (consisting of normal recurring adjustments) necessary for a    
fair presentation of the financial information as of and for the three month    
periods ended June 30, 2002 and 2001, in conformity with accounting principles  
generally accepted in the United States of America. The financial statements    
include the accounts of Harp & Eagle, Ltd. (Company), was formed in September   
1999 under the laws of the state of Wisconsin for the purpose of acquiring all  
of the issued and outstanding common stock of Castledaly Acquisition Corporation
(Castledaly). In 2000, the Company acquired approximately 63% of the outstanding
common stock of Castledaly in a series of transactions. The acquisition of      
Castledaly has been accounted for in a manner similar to a pooling of interest  
since it was acquired from a company under joint control and common management. 
In 2001, the Company acquired the remaining 37% ownership interest of           
Castledaly. Castledaly owns 100% of its subsidiary, Castledaly Manor Limited    
(Manor), which owns and operates an Irish manor house inn located in the village
of Castledaly, Ireland. Operating results for the three-month period ended June 
30, 2002 are not necessarily indicative of the results that may be expected for 
future periods.                                                                 

The business of the Company, accounting policies followed, and other information
are contained in the notes to the consolidated financial statements for the     
Company as of and for the years ended December 31, 2001 and 2000, filed as part 
of the Company's annual report on Form 10-KSB. These consolidated financial     
statements should be read in conjunction with the annual consolidated financial 
statements.                                                                     

Note 2-Earnings per share                                                       

Earnings per share has been computed based on the weighted average shares       
outstanding for the periods below:                                              

                                                                [Download Table]


                                              Income          Shares      Per-Share 
                                            (Numerator)    (Denominator)    Amount  
                                            -----------    -------------    ------  
                                                                                    
Basic income per common share:                                                      
  Income available to common stockholders:                                          
    Three months ended June 30, 2002        $      23,942       706,310   $      .03
                                            =============                 ==========
    Three months ended June 30, 2001        $      40,415       504,339   $      .08
                                            =============                 ==========
    Six months ended June 30, 2002          $      33,461       678,142   $      .05
                                            =============                 ==========
    Six months ended June 30, 2001          $      30,786       504,339   $      .06
                                            =============                 ==========

During December, 2000 the Company granted options to purchase approximately     
33,332 shares of common stock to four individuals, all of whom are officers,    
directors and/or employees of the Company. These options were granted pursuant  
to a plan adopted by the board of directors. All of these options are           
exercisable for a period of ten years, at the price of $3.00 per share; however,
such options will not become fully vested and exercisable until July 1, 2007.   
The exercise price of these options was determined by the Company to reflect the
fair value of the common stock as of December 31, 2000. These options have been 
cancelled                                                                       

Note 3-Reclassification                                                         

For comparability, prior period figures have been reclassified, where           
appropriate, to conform with the financial statement presentation used for the  
second quarter 2002.                                                            

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ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION            
AND RESULTS OF OPERATIONS                           

    You should read the following commentary in conjunction with the financial
statements and related notes contained elsewhere in this report.                

FORWARD-LOOKING STATEMENTS                                                      

     Certain information in this report, including the following discussion, may
include forward-looking statements within the meaning of Section 27A of the     
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  
We intend the disclosure in these sections and throughout this report to be     
covered by the safe harbor provisions for forward-looking statements. All       
statements regarding our expected financial position and operating results,     
business strategy, financing plans, and the outcome of any contingencies are    
forward-looking statements. These statements can sometimes by identified by our 
use of words such as "may", "believe", "plan", "will", "anticipate", "estimate",
"expect", "intend", and other phrases of similar meaning. Known and unknown     
risks, uncertainties and other factors could cause the actual results to differ 
materially from those contemplated by the statements. Forward-looking           
information is based on various factors and was derived using numerous          
assumptions.                                                                    

BACKGROUND                                                                      

Our Castledaly Manor inn and restaurant facility, located on 37 acres 
outside of Athlone, in County Westmeath, Ireland, is housed in a renovated manor
house and stable blocks which were originally constructed as a working estate in
the early 18th Century. During 1997, a group of Wisconsin investors organized   
Castledaly Acquisition Corporation which purchased one-half of the outstanding  
"ordinary shares" of Castledaly Manor, Ltd., an Irish limited company; an Irish 
entrepreneur owned the balance. Castledaly Manor, Ltd. owns 100% of the equity  
in Castledaly Manor. An Irish limited company, which is comparable to a typical 
business corporation in the United States, provides limited liability to its    
shareholders; its equity shares, which are comparable to common stock, are      
referred to as "ordinary shares."                                               

    During 1999, Castledaly Acquisition Corporation acquired 100% ownership of
Castledaly Manor, Ltd. During 2000 and 2001, Harp & Eagle acquired all of the   
outstanding common stock of Castledaly Acquisition Corporation, thereby becoming
the sole owner of Castledaly Manor.                                             

Originally, Castledaly Manor had 11 rooms available for rent. Early in
2001, it expanded by renovation of the stable blocks behind the manor house,    
thereby adding an additional 12 guest rooms; with these additional rooms, the   
inn now has 23 guest rooms available for rent. We opened the new rooms for      
occupancy in April 2001.                                                        

RESULTS OF OPERATIONS                                                           

Sales and costs of sales                                                        

     Sales decreased in the second quarter of 2002 over the comparable period of
2001 from $468,662 to $383,802, a decrease of $84,860, or 18%. We believe that  
this drop in sales reflects an increase in our tour price as of April 1, 2002,  
resulting in a number of tour patrons choosing to travel during the first       
quarter at the substantially lower price. Our tour volume was also adversely    
affected by the continuing impact of the September 11 terrorist attack on travel
worldwide. We receive approximately 54% of our sales revenue from airline       
tickets, 29% from room rentals, and 17% from food and beverage sales.           

Cost of sales increased in the second quarter 2002 over the comparable
period of 2001 from $32,936 to $60,409, an increase of $27,473, or 83%, due     
primarily to increased costs associated with the greater capacity of Castledaly 
Manor, such as utilities, food/beverage and other expenses incurred to supply   
and maintain the expanded facility.                                             

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  As a result of decreased sales and increased cost of sales, gross profit
decreased $112,333, from $435,726 to $323,393, or 26%, for the period ended June
30, 2002 as compared to the period ended June 30, 2001.                         

Operating Expenses                                                              

 Our operating expenses decreased in the second quarter of 2002 from the
comparable period in 2001 by $96,432, or 26%, from $374,755 to $278,323. For the
second quarter of 2002, 65% of our aggregate operating expenses were incurred   
for airline tickets (which approximates our cost for such tickets), 24% for room
rentals, 9% for food and beverage sales, and 2% for other miscellaneous         
expenses. Commencing as of April 1, 2001, the rentable-room capacity of         
Castledaly Manor more than doubled, as described above. However, the enlarged   
facility did not require comparable increases in costs, predominantly due to    
certain "economies of scale." The same number of employees as had been required 
to operate the pre-expansion Castledaly Manor were able to operate and maintain 
the enlarged facility in approximately the same amount of time at substantially 
equal cost, and our expenses associated with the operation of 11 rooms,         
principally wages of housekeeping personnel, did not increase materially when we
grew to 23 rooms.                                                               

Net Income                                                                      

     Due to decreased sales, coupled with increased costs of sales, as described
above, we reported net income for the second quarter of 2002 of $23,942,        
compared to $40,415 for the second quarter of 2001, a decrease of $16,473, or   
41%.                                                                            

Changes in Assets and Liabilities                                               

From December 31, 2001 to June 30, 2002, our liabilities rose         
significantly, due principally to an increase in customer deposits from $123,134
at December 31, 2001 to $350,080 at June 30, 2002, an increase of $226,946, or  
184%. We believe that such increase in customer deposits was due to factors     
described above, including our greater capacity at Castledaly Manor, the        
increase in our room and tour charges and the tendency of tour patrons to       
postpone travel following the September 11 terrorist attack. While we           
experienced a substantial increase in tour reservations during the second       
quarter of 2002, many trips were delayed. However, these postponed tours are    
anticipated to be reflected in increased sales during subsequent quarters.      

FINANCIAL CONDITION                                                             

     Our principal source of liquidity from operations has been and remains cash
earnings from rental of hotel rooms, and food and liquor sales.                 

 To provide additional liquidity, we have obtained a revolving term loan
credit facility from a U.S. commercial bank, under which we may borrow up to a  
maximum of $350,000 at a rate of interest equal to the U.S. prime rate plus     
0.5%. Pursuant to the current agreement, the lending commitment terminates April
30, 2003, and any loan balance outstanding shall be paid on that date; however, 
we have not experienced difficulty in renewing and extending previous credit    
agreements and anticipate that the current agreement will be extended on        
acceptable terms. Amounts outstanding under such credit facility are guaranteed 
by County Clare, Ltd., a related party, and by a stockholder of Harp & Eagle. As
of June 30, 2002, approximately $338,117 was outstanding under this credit      
facility, all of which we intend to repay with proceeds of our ongoing initial  
public offering. Following any such repayment, we may if we choose to do so,    
re-borrow up to $350,000 on the same terms described above.                     

INFLATION AND OTHER FACTORS THAT MAY AFFECT FUTURE RESULTS.                     

We have not been affected by inflation in the past, and do not expect 
inflation to have a significant effect on operations in the foreseeable future. 

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PART II. OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.                             

See Schedule A, attached.                                     

ITEM 5.  OTHER INFORMATION.                                                     

        The registrant completed the sale of the required 60,000-share minimum
offering within the period provided under the terms of its initial public       
offering. The first disbursement of escrowed offering proceeds occurred on April
11, 2002, and the registrant's initial public offering remains ongoing as of the
filing date of this report.                                                     

       The registrant secured the renewal until April 30, 2003 of the credit
facility provided by a commercial bank, as described under Part I, Item 2 of    
this report, on the same terms which existed prior to April 30, 2002.           

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                                       

(a) Exhibits                                                          

Number                               Description          

    99.1      Certification of Chief Executive Officer and Chief
                    Financial Officer pursuant to 18 U.S.C. Section 1350, as
                     adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.                            

(b) Reports on Form 8-k                                               

     No reports on Form 8-K were filed during the quarter for which this
report is filed.                                              

SIGNATURES

  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.                                          

                                HARP & EAGLE, LTD.

Dated:  December 10, 2002       By:          /s/ CARY JAMES O'DWANNY            
                                    --------------------------------------------
                                    Cary James O'Dwanny, President and Treasurer
                                (Principal Executive Officer
                             and
                                  Principal Financial Officer)

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CERTIFICATIONS

I, Cary James O'Dwanny, certify that:                                 

  1. I have reviewed this quarterly report on Form 10-QSB of Harp & Eagle,
Ltd.;                                                                           

     2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make 
the statements made, in light of the circumstances under which such statements  
were made, not misleading with respect to the period covered by this quarterly  
report; and                                                                     

 3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material   
respects the financial condition, results of operations and cash flows of the   
registrant as of, and for, the periods presented in this quarterly report.      

4. *                                                                  

5. *                                                                  

6. *                                                                  

Date: December 10, 2002                                                         

                                       /S/ CARY JAMES O'DWANNY
                                       ---------------------------------------
                                      Cary James O'Dwanny,
                                       President (Chief Executive Officer)
                                       and Treasurer (Chief Financial Officer)

----------                                                                      
* Omitted pursuant to transition provisions described in Section V of Securities
Act Release No. 33-8124.                                                    

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                                                                      SCHEDULE A

HARP & EAGLE, LTD.

 FORM 10-QSB
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002

Pursuant to Securities Act Rule 463, the following information (as    
identified in paragraphs (f)(2) through (f)(4) of Regulation S-B Item 701) is   
provided concerning the initial public offering ("Offering") of its common      
stock, par value $0.0001 per share ("Common Stock"), conducted by Harp & Eagle, 
Ltd. ("Company"), pursuant to a registration statement on Form SB-2 under the   
Securities Act of 1933 (File No. 333-55088), which initially became effective as
of December 11, 2001:                                                           

     (f)(2) through (f)(4)(i): The Offering commenced as of December 11,
2001, and remained ongoing as of June 30, 2002.               

  (f)(4)(ii): As of June 30, 2002, the managing underwriter of the
         Offering is J.E. Liss & Company, Inc. d/b/a Liss Financial Services, of
Milwaukee, Wisconsin.                                         

       (f)(4)(iii) through (f)(4)(iv): 1,000,000 shares of Common Stock were
         registered on Form SB-2, all of which are included in the Offering; all
 such shares were registered for the account of the Company; the
         aggregate price of the Common Stock registered (calculated at $6.00 per
      share, the initial public offering price) was $6,000,000; during the
         period from December 11, 2001 through June 30, 2002, 68,105 shares were
sold in the Offering.                                         

      (f)(4)(v): From December 11, 2001 through June 30, 2002, the Company
  incurred the following expenses in connection with the Offering:

Underwriting commissions           $   35,350 
Underwriters' expense allowances        8,838 
  Other expenses                         97,155  *
                                  ----------
              Total expenses         $  141,343  *
                                  ==========
* Estimate                                                    

   Approximately $26,500 of the above expenses consisted of fees and
  expense reimbursements paid to Kranitz & Philipp, counsel to the
     Company. Richard A. Kranitz, a partner in Kranitz & Philipp, is the
         Secretary and a director of the Company. Apart from the foregoing, none
       of the above expenses were paid, directly or indirectly, to directors
   or officers of the Company, or to their affiliates, or to persons
     owning ten percent or more of any class of equity securities of the
Company, or to affiliates of the Company.                     

     (f)(4)(vi) through (f)(4)(vii):  After deducting the total expenses
      reported above, net proceeds of the Offering received by the Company
         from December 11, 2001 through June 30, 2002 were $267,287. Of such net
       proceeds, $95,700 was applied to debt reduction (including $45,700 to
         affiliates of the Company), $50,000 was applied to the purchase of real
estate, and the balance was held in Company accounts pending  
      application. Apart from the $45,700 applied to repay indebtedness to
   affiliates, no net proceeds were paid, directly or indirectly, to
     directors or officers of the Company, or to their affiliates, or to
         persons owning ten percent or more of any class of equity securities of
the Company, or to affiliates of the Company.                 

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 INDEX TO EXHIBITS

Exhibit                                                             
Number                             Description                      
------                             -----------                      

99.1           Certification of Chief Executive Officer and Chief 
                    Financial Officer pursuant to 18 U.S.C. Section 1350, as
                     adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.                            

Exhibit Index

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Dates Referenced Herein and Documents Incorporated By Reference

		Referenced-On Page
This 10QSB Filing	Date	First	Last	Other Filings

	12/31/00	10
	4/1/01	12
	6/30/01	10	12
	12/11/01	15		SC 13D
	12/31/01	3	12	10KSB, NT 10-K
	4/1/02	11
	4/11/02	13
	4/30/02	13
For The Period Ended	6/30/02	1	15
	11/30/02	1
Filed On / Filed As Of	12/10/02	1	14
	4/30/03	12	13
	7/1/07	10

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Filing Submission - Alternative Formats (Word / Rich Text, HTML, Plain Text, SGML, XML, et al.)

Harp & Eagle Ltd · 10QSB · For 6/30/02

Filed On 12/10/02 11:28am ET · SEC File 0-33353 · Accession Number 950134-2-15379

Quarterly Report -- Small Business · Form 10-QSBFiling Table of Contents

10QSB · Quarterly Report -- Small BusinessDocument Table of Contents

Dates Referenced Herein and Documents Incorporated By Reference

Quarterly Report -- Small Business · Form 10-QSB
Filing Table of Contents

10QSB · Quarterly Report -- Small Business
Document Table of Contents