UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D. C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2004
Commission file number 333-63432
ATLANTIC WINE AGENCIES INC.
(Exact name of small business issuer as specified in its charter)
Florida 65-110237
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
64 Knightsbridge
London, UK
SW1X
(Address of principal executive offices)
011-44-797-905-7708
(Issuer's telephone number)
Check whether the issuer (1) has 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___
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
The number of shares of the issuer's outstanding common stock, which is the only
class of its common equity, on August 18, 2004 was 104,063,027.
1
ITEM 1 FINANCIAL STATEMENTS
Description Page No.
FINANCIAL INFORMATION:
Financial Statements
Consolidated Balance Sheets at June 30, 2004
(Unaudited).......................................................................... 3
Consolidated Statement of Operations for the Three Months Ended June 30, 2004
and for the Period from April 18, 2001 to June 30, 2004 (Unaudited)................... 4
Consolidated Statements of Cash Flows for the Three Months Ended
June 30, 2004 and for the Period from April 18, 2001 to June 30, 2004 (Unaudited) ... 5
Notes to Consolidated Financial Statements (Unaudited).................................. 6
2
ITEM 1. FINANCIAL STATEMENTS
ATLANTIC WINE AGENCIES, INC. and SUBSIDIARIES
(Formerly New England Acquisitions, Inc.)
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
JUNE 30, 2004
CURRENT ASSETS
Cash $ 309,944
Accounts receivable 21,534
Inventory 300,359
-----------
Total Current Assets 631,837
OTHER ASSETS
Property, plant and equipment, net
2,635,621
Goodwill, net 496,270
-----------
$ 3,763,728
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 76,431
Accrued expenses 30,000
-----------
Total Current Liabilities 106,431
LONG-TERM DEBT
Due to principal stockholders 298,618
STOCKHOLDERS' EQUITY
Common stock authorized 150,000,000
shares; $0.00001 par value; issued
and outstanding 104,063,027 shares 1,041
Additional contributed capital 3,708,315
Other comprehensive income 128,544
Deficit accumulated during Development Stage (479,221)
-----------
Total Stockholders' Equity 3,358,679
-----------
$ 3,763,728
See accompanying notes to financial statements.
3
ATLANTIC WINE AGENCIES, INC. and SUBSIDIARIES
(Formerly New England Acquisitions, Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
Period
For the Three April 18, 2001
Months Ended (Inception) to
June 30, June 30,
2004 2004
------------ --------------
NET SALES $ 56,143 $ 56,143
COSTS AND EXPENSES
Cost of goods sold 128,107 128,107
Selling, general and administrative 148,849 398,341
Depreciation and amortization 5,543 5,543
------------ ------------
Total Costs and Expenses 282,499 531,991
------------ ------------
NET OPERATING LOSS (226,356) (475,848)
OTHER EXPENSE
Interest expense (9) (9)
------------ ------------
NET LOSS $ (226,365) $ (475,857)
============ ============
NET LOSS PER SHARE, basic and diluted $ (.003) $ (.09)
============
Weighted average number of common shares outstanding 67,799,291 5,461,682
============ ============
Note: The Company had no operating activities for the comparable period ending
June 30, 2003.
See accompanying notes to financial statements.
4
ATLANTIC WINE AGENCIES, INC. and SUBSIDIARIES
(Formerly New England Acquisitions, Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Period
For the Three April 18, 2001
Months Ended (Inception) to
June 30, June 30,
2004 2004
------------ --------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for period $ (226,365) $ (475,857)
Non-cash item included in net loss:
Stock based compensation -- 140,000
Depreciation and amortization 5,574 5,574
Changes in operating assets and liabilities:
Accounts receivable (4,610) (4,610)
Inventory (57,931) (57,931)
Accounts payable 58,872 58,872
Accrued expenses (13,500) 30,000
Increase in due to principal stockholders 298,618 298,618
----------- -----------
Net Cash (Used In) Provided by Operating
Activities 60,658 (5,334)
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of common stock -- 84,525
Cost of registering securities -- (18,533)
Cash acquired in acquisition 120,742 120,742
----------- -----------
Net Cash Provided by Financing Activities 120,742 186,734
----------- -----------
EFFECT OF EXCHANGE RATE CHANGES ON
CASH 128,544 128,544
----------- -----------
NET INCREASE IN CASH 309,944 309,944
CASH AT BEGINNING OF PERIOD -- --
----------- -----------
CASH AT END OF PERIOD $ 309,944 $ 309,944
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION
Cash paid for interest $ 9 $ 9
Non-cash investing and financing activities:
Issuance of common stock relating to the
change of control and settlement of
obligations to previous principal
stockholders. See Note C of Notes to
Financial Statements 56,226
Acquisition of New Heights 560 Holding, LLC:
Cash 120,742 120,742
Accounts receivable 16,924 16,924
Inventory 242,429 242,429
Property, plant, and equipment 2,637,020 2,637,020
Goodwill 449,059 449,059
Accounts payable 17,559 17,559
Common stock 3,500,000 3,500,000
See accompanying notes to financial statements.
5
ATLANTIC WINE AGENCIES, INC. and SUBSIDIARIES
(Formerly New England Acquisitions, Inc.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2004
NOTE A - BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements
have been prepared in accordance with generally accepted
accounting principles for interim financial information.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring
accruals) considered necessary in order to make the financial
statements not misleading have been included. Results for the
three months ended June 30, 2004 are not necessarily indicative
of the results that may be expected for the year ending March
31, 2005. For further information, refer to the financial
statements and footnotes thereto included in the Atlantic Wine
Agencies, Inc., formerly New England Acquisitions, Inc., annual
report on Form 10-KSB for the year ended March 31, 2004.
NOTE B - STOCKHOLDERS' EQUITY
On May 4, 2004, the Company acquired all of the issued and
outstanding shares of New Heights 560 Holdings, LLC, a Cayman
Islands Limited Liability corporation which controls Mount
Rozier Estate (pty) Limited and the Mount Rozier Properties
(pty) Limited for 100,000,000 shares of its common
stock. The companies own a world class vineyard in the
Stellenbosch region of Western Cape, South Africa and produces
high quality premium wines. The acquisition is being accounted
for as a purchase under SFAS No. 141, Business Combinations.
The allocation of the purchase price was as follows:
Value of 100,000,000 shares of common stock at
$0.035 per share $3,500,000
==========
Fair value of net assets acquired is as follows:
Land $2,596,154
Processing equipment 40,866
Intangibles 51,385
Inventories 242,429
Accounts receivable 16,924
Cash 120,742
Liabilities assumed (17,559)
Goodwill 449,059
-----------
$3,500,000
===========
6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
The following should be read in conjunction with our financial statements
and the related notes that appear elsewhere in this Annual Report. The
discussion contains forward-looking statements that reflect our plans,
estimates and beliefs. Our actual results could differ materially from
those discussed in the forward-looking statements. Factors that could cause
or contribute to these differences include, but are not limited to, those
discussed below.
We have not had any significant revenues since inception. Our sole
objective is to become an operating business.
Our ability to become and continue as a going concern is dependent upon
obtaining additional substantial capital. Because we have virtually no
funds and no commitments which would enable us to obtain funds, we may
exhaust our limited financial resources before we are ever able to commence
operations.
On December 16, 2003, the Company had a change in control of its issued and
outstanding common stock. On this date, Rosehill Investments Limited
acquired 11,937,200 shares of the Company's common stock pursuant to a
Stock Purchase Agreement among Rosehill Investments Limited and the
Company, Mr. Jonathan Reisman and Mr. Gary Cella. The agreement provided
for the shares to be sold as follows: 9,234,520 shares from the Company;
1,379,600 shares from Mr. Reisman and 1,323,100 shares from Mr. Cella
("Stock Sale").
As a result of the Stock Sale: (i) the directors of the Company resigned
and new directors were appointed; (ii) obligations to the Company's
auditors, lawyers and service providers were satisfied; and (iii) the
Company spun off its two subsidiaries to its shareholders of record
immediately prior to the Stock Sale.
On May 4, 2004, the Company acquired all of the issued and outstanding
shares of New Heights 560 Holdings LLC, a Cayman Islands limited liability
corporation ("New Heights"), in exchange for One Hundred Million shares of
its restricted common stock which is equal to 99.9% of the total
outstanding shares of the Company's common stock (this transaction shall be
referred to as the "Merger"). As a result of the Merger, the Company now
has two wholly owned subsidiaries, Mount Rozier Estates (Pty) Limited and
Mount Rozier Properties (Pty) Limited. Such companies own a world class
vineyard in the Stellenbosch region of Western Cape, South Africa. The
vineyard and surrounding properties consist of 105 hectares of arable land
for viticultural as well as residential and commercial purposes. In the
opinion of the management the site is a world class site in terms of
location, soil composition and future development potential.
DEVELOPMENT AND INTEGRATION OF BUSINESS MODEL
It is the Company's current intention to enter the South African
wine-growing and wine distribution business. Presently, the Company is
investigating potential acquisitions of assets and is in discussions with
possible joint venture candidates in South Africa and elsewhere.
ITEM 3. CONTROLS AND PROCEDURES.
(a) Our principal executive officer and principal financial officer has
evaluated the effectiveness of our disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) as of a date within 90
days prior to the filing date of this quarterly report and has concluded
that our disclosure controls and procedures are adequate.
(b) There were no significant changes in our internal controls or in
other factors that could significantly affect these controls subsequent to
the date of their evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.
(c) Not applicable
7
PART II
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibit Index
Exhibit 99.1 Certification of President and Principal Financial Officer
Exhibit 99.2 Certification of President and Principal Financial Officer
b. Reports on Form 8-K
On May 17, 2004, the Company filed an 8-K with the Securities and Exchange
Commission with respect to a change of control (file no. 333-63432) which
occurred on May 4, 2004. On May 4, 2004, the Company acquired all of the issued
and outstanding shares of New Heights 560 Holdings LLC, a Cayman Islands limited
liability corporation ("New Heights"), in exchange for One Hundred Million
shares of its restricted common stock which is equal to 99.9% of the total
outstanding shares of the Company's common stock (this transaction shall be
referred to as the "Merger"). As a result of the Merger, the Company now has two
wholly owned subsidiaries, Mount Rozier Estates (Pty) Limited and Mount Rozier
Properties (Pty) Limited. Such companies own a world class vineyard in the
Stellenbosch region of Western Cape, South Africa. The vineyard and surrounding
properties consist of 105 hectares of arable land for viticultural as well as
residential and commercial purposes. In the opinion of the management the site
is a world class site in terms of location, soil composition and future
development potential.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ATLANTIC WINE AGENCIES INC.
/s/ Harry Chauhan
-------------------
Name: Harry Chauhan
Title: President, Chief Financial Officer and Chairman of the Board
Date: August 18, 2004