UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[ ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 2006
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 Number: 333-120949
NASCENT WINE COMPANY, INC.
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(Exact name of registrant as specified in its charter)
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Nevada 82-0576512
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2355 Paseo de las Americas 92154
-------------------------- -----
San Diego, Ca.
(Address of principal executive offices) (Zip Code)
(619) 661 0458
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(Registrant's telephone number, including area code)
N/A
---
(Former name, former address and former fiscal year, if
-------------------------------------------------------
changed since last report)
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1052 Las Palmas Entrada
Henderson, Nevada 89012
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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: July 19, 2006 50,000,000 shares
outstanding
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NASCENT WINE COMPANY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
TABLE OF CONTENTS
PAGE
----
PART I - FINANCIAL INFORMATION 3
Unaudited Financial Statements 3
Consolidated Balance Sheets 4
Consolidated Statements of Operations 5
Consolidated Statement of Stockholders' Equity 6
Consolidated Statements of Cash Flows 7
Notes to Financial Statements 8
Management's Discussion and Plan of Operation 11
Controls and Procedures 13
PART II - OTHER INFORMATION 14
Use of Proceeds 14
Submission of Matters to a Vote of Security Holders 14
Other Information 15
Exhibits and Reports on Form 8-K 15
SIGNATURES 16
2
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UNAUDITED FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial reporting and pursuant to the rules and regulations of the
Securities and Exchange Commission ("Commission"). While these statements
reflect all normal recurring adjustments which are, in the opinion of
management, necessary for fair presentation of the results of the interim
period, they do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements. For
further information, refer to the financial statements and footnotes that are
included in the Company's December 31, 2005 annual report on Form 10-KSB
previously filed with the Commission on March 30, 2006, and subsequent
amendments made thereto.
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3
NASCENT WINE COMPANY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
JUNE 30, DECEMBER 31,
2006 2005
----------- -----------
ASSETS
Current assets:
Cash $ 352,589 $ 14,254
Inventory 286,355 1,789
----------- -----------
TOTAL CURRENT ASSETS 638,944 16,043
Property and equipment, net 40,451 2,675
----------- -----------
Other assets:
Acquisition of distribution rights of Miller Beer 8,543,750 --
Receivable from Piancone Group International, Inc. 201,955 --
Other deposits 39,104 --
----------- -----------
TOTAL ASSETS $ 9,464,204 $ 18,718
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 314,990 $ --
Accrued interest 18,762 --
Loans payable, less un-amortized debt interest 945,942 --
----------- -----------
TOTAL CURRENT LIABILITIES 1,279,694 --
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000 shares
authorized no shares issued and outstanding -- --
Common stock, $0.001 par value, 195,000,000 shares authorized
35,000,000 and 4,328,400 shares issued and outstanding
as of June 30, 2006 and December 31,2005, respectively 35,000 4,328
Additional paid-in capital 8,504,754 34,426
Accumulated other comprehensive loss (153) --
Deficit accumulated during development stage (355,091) (20,036)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 8,184,510 18,718
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 9,464,204 $ 18,718
=========== ===========
The accompanying notes are an integral part of these financial statements.
4
NASCENT WINE COMPANY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
FOR THE SIX MONTHS FOR THE THREE MONTH
ENDED ENDED DECEMBER 10, 2002
JUNE 30, JUNE 30, (INCEPTION) TO
2006 2005 2006 2005 JUNE 30, 2006
------------ ------------ ------------ ------------ ------------
REVENUES $ 389 $ -- $ -- $ -- $ 1,789
COST OF GOODS SOLD 243 -- -- -- 1,343
------------ ------------ ------------ ------------ ------------
GROSS PROFIT 146 -- -- -- 446
OPERATING EXPENSES
General and administrative expenses 265,408 6,679 253,475 3,872 285,744
------------ ------------ ------------ ------------ ------------
TOTAL OPERATING EXPENSES 265,408 6,679 253,475 3,872 285,744
------------ ------------ ------------ ------------ ------------
LOSS FROM OPERATIONS (265,262) (6,679) (253,475) (3,872) (285,298)
Other income (expense)
Interest income 911 -- 911 -- 911
Interest expense (70,704) -- (70,704) -- (70,704)
Provision for income taxes -- -- -- -- --
------------ ------------ ------------ ------------ ------------
NET LOSS $ (335,055) $ (6,679) $ (323,268) $ (3,872) $ (355,091)
============ ============ ============ ============= =============
NET (LOSS) PER SHARE - BASIC AND FULLY
DILUTED $ (0.01) $ (0.00) $ (0.01) $ (0.00)
============ ============= ============= =============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
BASIC AND FULLY DILUTED 23,687,845 3,500,000 29,807,692 3,500,000
============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
5
NASCENT WINE COMPANY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
COMMON STOCK
-----------------------------------------
(DEFICIT)
ACCUMULATED TOTAL
ADDITIONAL DURING STOCKHOLDERS'
NUMBER OF PAR VALUE PAID-IN COMPREHENSIVE DEVELOPMENT EQUITY
SHARES $.001 CAPITAL INCOME STAGE (DEFICIT)
----------- ----------- ----------- ----------- ----------- -----------
December 10, 2002 issued for
expenses 400,000 $ 400 $ 92 $ -- $ -- $ 492
Shares issued for cash 2,000,000 2,000 -- -- -- 2,000
Shares issued for fixed
assets 1,100,000 1,100 11 -- -- 1,111
Net loss -- -- -- -- (492) (492)
----------- ----------- ----------- ----------- ----------- -----------
Balance at December 31, 2002 3,500,000 3,500 103 -- (492) 3,111
Net loss -- -- -- -- (2,318) (2,318)
----------- ----------- ----------- ----------- ----------- -----------
Balance at December 31, 2003 3,500,000 3,500 103 -- (2,810) 793
Net loss
Donated capital -- -- 10,000 -- -- 10,000
Net loss -- -- -- -- (3,533) (3,533)
----------- ----------- ----------- ----------- ----------- -----------
Balance December 31, 2004 3,500,000 3,500 10,103 -- (6,343) 7,260
Donated capital -- -- 300 -- -- 300
Shares issued for cash 828,400 828 24,023 -- -- 24,851
Net loss -- -- -- -- (13,693) (13,693)
----------- ----------- ----------- ----------- ----------- -----------
Balance December 31, 2005 4,328,400 4,328 34,426 -- (20,036) 18,718
April 11, 2006 20 to 1 split 82,240,400 82,240 (82,240) -- -- --
Shares cancelled April 27, 2006 (69,068,800) (69,068) 69,068 -- -- --
Shares issued for Miller
Beer distribution license 17,500,000 17,500 7,857,500 -- -- 7,875,000
Warrants issued and attached
to debt -- -- 626,000 -- -- 626,000
Net loss -- -- -- -- (335,055) (335,055)
Adjustment for foreign
currency translation -- -- -- (153) -- (153)
------------
Comprehensive loss -- -- -- -- -- (335,208)
----------- ----------- ----------- ----------- ----------- -----------
Balance June 30, 2006 (Unaudited) 35,000,000 $ 35,000 $ 8,504,754 $ (153) $ (355,091) $ 8,184,510
=========== =========== =========== =========== =========== ===========
The accompanying notes to financial statements are an integral part of this statement
6
NASCENT WINE COMPANY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE SIX MONTH
ENDED
JUNE 30, DECEMBER 10, 2002
-------------------------- (INCEPTION) TO
2006 2005 JUNE 30, 2006
----------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (335,055) $ (6,679) $ (355,091)
Adjustment to reconcile net loss to net cash
used for operating activities:
Shares issued for expenses -- -- 492
Depreciation 164 214 1,353
Amortization of distribution rights 131,250 -- 131,250
Warrants issued for interest 51,942 -- 51,942
Changes in operating assets and liabilities:
Increase in accounts receivable (201,955) -- (201,955)
Increase in inventory (284,566) -- (286,355)
Increase in deposits (39,104) -- (39,104)
Increase in accrued interest 18,762 -- 18,762
Increase in accounts payable 314,990 -- 314,990
----------- ----------- -----------
NET CASH USED FOR OPERATING ACTIVITIES (343,572) (6,645) (363,716)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets (37,940) -- (40,694)
Acquisition of license to distribute Miller Beer (800,000) (800,000)
----------- ----------- -----------
NET CASH USED FOR INVESTING ACTIVITIES (837,940) -- (840,694)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in loans 1,520,000 -- 1,520,000
Issuance of common stock -- -- 26,852
Donated capital -- -- 10,300
----------- ----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,520,000 -- 1,557,152
----------- ----------- -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (153) -- (153)
NET INCREASE (DECREASE) IN CASH 338,335 (6,465) 352,589
Cash - Beginning 14,254 7,005 --
----------- ----------- -----------
CASH - ENDING $ 352,589 $ 540 $ 352,589
=========== =========== ===========
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITY:
Issuance of stock for fixed assets $ -- $ -- $ 1,111
Issuance of stock for Miller distribution license $ 7,875,000 $ -- $ 7,875,000
Warrants issued and attached to debt $ 626,000 $ -- $ 626,000
The accompanying notes are an integral part of these financial statements.
7
NASCENT WINE COMPANY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2006
(UNAUDITED)
NOTE A - COMPANY OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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COMPANY OVERVIEW
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The Company was incorporated under the laws of the State of Nevada, on December
31, 2002 (Date of inception). The Company has had minimal operations and in
accordance with SFAS #7, the Company is considered a development stage company.
In April 2006 the Company acquired the rights to distribute Miller Beer in Baja
California, Mexico from Piancone Group International, Inc. (PGII) issuing
17,500,000 shares of common stock at the par value $0.45 per share($7,875,000)
and paying off $800,000 debt of previous license holder.
The Company incorporated Best Beer S.A. de C. V. (Best) in Mexico in order to
distribute in Baja California.
In May and June 2006 the Company purchased beer, warehousing the beer in
Tijuana.
The Company made no sales. (See subsequent event footnote)
BASIS OF PREPARATION OF FINANCIAL STATEMENTS
- --------------------------------------------
The accompanying financial statements are prepared in accordance with U.S.
generally accepted accounting standards (GAAP). Inter-company accounts have been
eliminated in consolidation. The financial statements have been prepared
assuming that the Company will continue as a going concern.
Certain information and footnote disclosures, normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America, have been omitted. These financial statements
should be read in conjunction with the audited financial statements and notes
for the year ended December 31, 2005.
USE OF ESTIMATES
- ----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets, and liabilities on the date of
the financial statements and the reported amounts of revenues. and expenses
during the period. Actual results could differ from those estimates.
INVENTORIES
- -----------
Inventories consist of beer, beverages and other food product. Inventories are
accounted for on the first-in, first-out basis. Any products reaching their
expiration date are written off.
REVENUE RECOGNITION
- -------------------
The Company reports revenue using the accrual method, in which revenues are
recorded as services are rendered or as products are delivered and billings are
generated.
REPORTING ON THE COSTS OF START-UP ACTIVITIES
- ---------------------------------------------
Statement of Position 98-5 (SOP 98-5) "Reporting on the Costs of Start-Up
Activities," which provides guidance on the financial reporting of start-up
costs and organizational costs, requires most costs of start-up activities and
organizational costs to be expensed as incurred.
8
NASCENT WINE COMPANY, INC.& SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
(UNAUDITED)
TAXES ON INCOME
- ---------------
The Company follows Statement of Financial Accounting Standard No. 109
"Accounting for Income Taxes" (SFAS No. 109) for recording the provision for
income taxes. Deferred tax assets and liabilities are computed based upon the
differences between the financial statement and income tax basis of assets and
liabilities using the enacted marginal tax rate applicable when the related
asset or liability is expected to be realized or settled. Deferred income tax
expense or benefit is based on the change in the asset or liability each period.
If available evidence suggests that is more likely than not that some portion or
all of the deferred tax assets will not be realized, a valuation allowance is
required to reduce the deferred tax asset to the amount that is more likely than
not to be realized. Future changes in such valuation allowance are included in
the provision for deferred income taxes in the period of change.
Deferred income taxes may arise from temporary differences resulting from income
and expense items reported for financial accounting and tax purposes in
different periods. Deferred taxes are classified as current or non-current,
depending on the classification of assets and liabilities to which they relate.
Deferred taxes arising from temporary differences that are not related to an
asset or liability are classified as current or non-current depending on the
periods in which the temporary differences are expected to reverse.
STOCK - BASED COMPENSATION
- --------------------------
The Company accounts for stock-based awards to employees in accordance with
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" and related interpretations and has adopted the disclosure-only
alternate of SFAS No. 123, "Accounting for Stock-Based Compensation." Options
granted to consultants, independent representatives and other non-employees are
accounted for using the fair value method as prescribed by SFAS No. 123.
NOTE B - DEVELOPMENT STAGE OPERATIONS
- -------------------------------------
The Company is authorized to issue 195,000,000 shares of common stock at $.001
par value, and 5,000,000 shares of preferred stock at $.001 par value.
NOTE C - EARNINGS PER SHARE
- ---------------------------
Basic earnings per share is calculated by dividing net income by the weighted
average number of common shares outstanding during the period.
9
NASCENT WINE COMPANY, INC. & SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2006
UNAUDITED
NOTE D - GOING CONCERN
- ----------------------
The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and the liquidation of liabilities in the normal course of
business. However, the Company has not commenced its planned principal
operations and it has generated no revenues.
The Company will commence operations distributing Miller beer and other products
in Baja California, Mexico starting July 1, 2006. The Company has secured
financing in the amount of $1,520,000.
NOTE G - PROPERTY AND EQUIPMENT
- -------------------------------
Property and equipment consists of the following at June 30, 2006:
Equipment $ 4,476
Leasehold improvements 37,329
-------
Total 41,805
Accumulated depreciation 3,154
-------
$40,451
=======
NOTE H - INCOME TAXES
- ---------------------
For the years ended December 31, 2005, 2004, 2003 and 2002, the Company incurred
net operating losses and, accordingly, no provision for income taxes has been
recorded. In addition, no benefit for income taxes has been recorded due to the
uncertainty of the realization of any tax assets. At December 31, 2005, the
Company had approximately $6,300 of federal and state net operating losses. The
net operating loss carry forwards, if not utilized, will begin to expire in
2022.
NOTE I - NOTES PAYABLE
- ----------------------
The Company has obtained financing in the amount of $1,520,000 with interest
payable at 8% annually. The loans are payable in one year. As additional
consideration to obtain the loan, the Company issued warrants to the lenders to
purchase 6,080,000 shares of common stock at a price per share of $0.25. The
difference between the price to purchase shares and the closing price of the
stock on the date of grant of the warrants ($626,000) is being written off over
the life of the loans (one year). The un-amortized interest, $574,058, has been
deducted from total of the loans payable at June 30, 2006
NOTE J - STOCKHOLDERS' EQUITY
- -----------------------------
On December 11, 2002, the Company issued 400,000 shares of its $.001 par value
common stock to its sole officer and director in exchange for expenses paid for
on behalf of the Company of $492.
On December 18, 2002, the company issued 2,000,000 shares of its $.001 par value
common stock in exchange for cash of $2,000 to its sole officer and director.
On December 31, 2002, the Company issued 1,100,000 shares of its $.001 par value
common stock in exchange for fixed assets of $1,111 to its sole officer and
director.
On August 15, 2005, the sole officer and director of the company donated $300 in
cash, which is considered additional paid-in capital. On October 5, 2005, the
Company issued 828,400 shares of its $.001 par value common stock in a public
offering for total cash proceeds of $24,851 to twenty unaffiliated purchasers.
On April 12, 2006, the Company did a 20 for 1 split. The balance of shares
issued after the split was 86,568,800. On April 27, 2006, 69,068,800 shares were
cancelled.
On April 27, 2006, the Company issued 17,500,000 shares of common
stock to acquire the distribution rights for Miller beer in Baja California,
Mexico at it par value $0.45 per share ($7,875,000) and paid off the debt of the
previous license holder to Miller Beer ($800,000). The total cost of the license
was $8,675,000. The Company is amortizing the acquisition over 10 year and will
evaluate the value of the intangible asset on an annual basis.
10
NASCENT WINE COMPANY, INC. & SUBSIDIARY
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2006
NOTE K - SEGMENT INFORMATION
- ----------------------------
The Company has adopted FAS Statement No. 131, "Disclosures about Segments of a
Business Enterprise and Related Information".
United States Mexico
------------- ---------
Net loss- for the six months ended June 30, 2006 $ 195,803 $ 8,002
for the six months ended June 30, 2005 $ 3,872 $ --
Long lived assets (net)- at June 30, 2006 $ 3,122 $ 37,329
at June 30, 2005 $ -- $ --
NOTE L - SUBSEQUENT EVENTS
- --------------------------
In May 2006 the Company entered into an Asset Purchase Agreement with Piancone
Group International, Inc. (PGII) to acquire all of the assets and liabilities of
PGII consisting consisting primarily of distribution facilities in Baja
California (warehousing, trucks, cold storage, office equipment, inventories,
leases, etc.) for 15,000,000 shares of common stock. The closing date is July 1,
2006.
In July 2006, after the closing, the Company commenced sale of beer and other
products included in the inventories acquired from PGII.
In August 2006, the Company entered into a non-binding letter of intent to
acquire all of the securities of Palermo Foods, LLC, an Italian food importer
and distributor for $1,000,000 in cash, the assumption of $630,897 of Palermo's
debt and $1,000,000 worth of the Company's common stock at the market price on
the closing date.
In August 2006, the Company closed an unsecured bridge loan of $500,000 due in
October 2006 at 8% interest. As additional consideration for the loan, the
lenders were granted an aggregate of 500,000 common stock purchase warrants to
purchase shares at $0.40 until October 31, 2011.
In August 200, the Company paid $25,000 in consulting fees and issued warrants
to purchase 100,000 shares of common stock at $0.40 per share as additional
consulting fees.
11
MANAGEMENT'S DISCUSSION AND PLAN OF OPERATION
FORWARD-LOOKING STATEMENTS
This Quarterly Report contains forward-looking statements about
Nascent Wine Company, Inc.'s business, financial condition and prospects that
reflect management's assumptions and beliefs based on information currently
available. We can give no assurance that the expectations indicated by such
forward-looking statements will be realized. If any of our management's
assumptions should prove incorrect, or if any of the risks and uncertainties
underlying such expectations should materialize, Nascent's actual results may
differ materially from those indicated by the forward-looking statements.
The key factors that are not within our control and that may have a
direct bearing on operating results include, but are not limited to, acceptance
of our services, our ability to expand our customer base, managements' ability
to raise capital in the future, the retention of key employees and changes in
the regulation of our industry.
There may be other risks and circumstances that management may be
unable to predict. When used in this Quarterly Report, words such as,
"BELIEVES," "EXPECTS," "INTENDS," "PLANS," "ANTICIPATES," "ESTIMATES" and
similar expressions are intended to identify forward-looking statements,
although there may be certain forward-looking statements not accompanied by such
expressions.
MANAGEMENT'S DISCUSSION AND PLAN OF OPERATION
Starting the first of July 2006 the Company will market and
distribute Miller beer, beverages and food products to over 1,000 customers in
Baja California, Mexico, out of its distribution warehouses in Tijuana and Cabo
San Lucas.
During the past six months the Company has been in the development
stage. With the acquisition of the assets of Piancone Group International (PGII)
as of July 1, 2006, we will no longer be in the development stage.
For the period from inception to June 30, 2006, the Company had an
accumulated loss of $355,000 of which $335,000 was a loss incurred in the past
six months. The Company had administrative expenses of $265,000 most of which
was professional fees ($106,000) related to the acquisition of PGII and the
securing of the Miller beer rights to distribute their products in Baja
California and amortization of acquisition of distribution rights of Miller
Beer. In addition, the Company's subsidiary in Tijuana incurred expenses in
setting up and receiving beer and other merchandise in order to commence the
sales operations as of the first of July ($8,000).
We believe that our cash on hand as of June 30, 2006 of $352,589 is
sufficient to continue operations for the next at least 12 months.
12
CONTROLS AND PROCEDURES
We maintain a set of disclosure controls and procedures designed to
ensure that information required to be disclosed by us in our reports filed
under the Securities Exchange Act, is recorded, processed, summarized and
reported within the time periods specified by the SEC's rules and forms.
Disclosure controls are also designed with the objective of ensuring that this
information is accumulated and communicated to our management, including our
chief executive officer and chief financial officer, as appropriate, to allow
timely decisions regarding required disclosure.
Based upon their evaluation as of the end of the period covered by
this report, our chief executive officer and chief financial officer concluded
that our disclosure controls and procedures are not effective to ensure that
information required to be included in our periodic SEC filings is recorded,
processed, summarized, and reported within the time periods specified in the SEC
rules and forms.
Our board of directors were advised by E. Randal Gruber, CPA, our
independent registered public accounting firm, that during their performance of
audit procedures for 2005 E. Randall Gruber, CPA identified a material weakness
as defined in Public Company Accounting Oversight Board Standard No. 2 in our
internal control over financial reporting.
This deficiency consisted primarily of inadequate staffing and
supervision that could lead to the untimely identification and resolution of
accounting and disclosure matters and failure to perform timely and effective
reviews. However, our size prevents us from being able to employ sufficient
resources to enable us to have adequate segregation of duties within our
internal control system. Management is required to apply its judgment in
evaluating the cost-benefit relationship of possible controls and procedures.
The Company will remedy this situation in the next quarter with the
acquisition of personal of Piancone Group International, Inc. in July, 2006
13
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS- NONE
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS-
Issued 17,500,000 shares of common stock to acquire rights to
distribute Miller beer in Baja California, Mexico
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES- NONE
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS-
On April 27, 2006, our Board of Directors approved, and holders of a
majority of our common stock ratified, the appointment of Sandro
Piancone and Victor Petrone as directors of NCTW.
Mr. Piancone has been in the foodservice industry since 1986. From 1987
to 1991, he was the publisher of US Pizza News, the largest pizza trade
newspaper in the U.S. In 1991, he founded Tele-Chef Catering, which grew to one
of San Diego's largest catering companies in just a few years. Tele-Chef was
then merged with Mt. Etna Pizza Corp. in 1995, which Mr. Piancone held the
position of vice president and board member of Mt. Etna Pizza Corp. until early
1998. In April 1998, he joined Roma Exporting, a food supplier to Mexico, as
vice president of sales and marketing, where his duties included securing new
distributors throughout Mexico and implementing marketing programs for those
distributors. From January 2000 to February 2002, he served as President of
E-Food Depot, Inc. USA. In February 2002 he joined his family's food
distribution company, Piancone Group International, where he served as it's Vice
14
President of Sales before becoming CEO in June 2004. Mr. Piancone's
responsibilities include creating, implementing and monitoring the strategic
goals and performance of the company, with emphasis on sales and marketing. He
is fluent in English, Italian and Spanish and well acquainted with the food
service in market in Mexico, Europe and the USA.
Victor Petrone has been in the foodservice industry since 1983. He is a
Graduate of The Wharton School of Business; University of Pennsylvania and is
also fluent in English, Italian and Spanish. From 1993 to 1999, Mr. Petrone
served as the CEO and President for Capital Food Corp. From 199 to 2001, he was
the general manager and sales representative for Roma Food Enterprises. In 2001,
he became the Italian Market Specialist and International Account Executive for
Sysco Food Services into 2003. From 2003 until 2005, Mr. Petrone served as the
President of Atlantic International Products, Inc., which he formed as an
import-export company specializing in ethnic foods. In 2005, Mr. Petrone joined
the Piancone Group as its Presedent, where he currently continues to serve.
ITEM 5 - OTHER INFORMATION-
On April 27, 2006, we entered into a stock purchase agreement with
Piancone Group International to acquire the rights to distribute Miller Beer in
Baja Mexico. In exchange for the rights, we issued Piancone Group International
17,500,000 shares of our common stock.
On April 28, 2006, Best Beer, our subsidiary company, entered into a
Distribution Agreement with Miller Trading Company, S.A. de C.V.
On May 1, 2006, Patrick Deparini resigned as our President. Mr.
Deparini continues to serve as our Secretary and Treasurer. To fill the vacancy
left by Mr. Deparini, our Board of Directors appointed Sandro Piancone, a
Director, and Chief Executive Officer of Nascent Wine Company, Inc..
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
EXHIBIT
NUMBER NAME AND/OR IDENTIFICATION OF EXHIBIT
3 Articles of Incorporation & By-Laws
* (a) Articles of Incorporation filed on December 10, 2002
* (b) Certificate of Amendment to Articles of
Incorporation filed on March 28, 2006
* (c) By-Laws adopted on December 12, 2002
31 Rule 13a-14(a)/15d-14(a) Certifications
(a) Sandro Piancone
(b) William Lindberg
32 Certification under Section 906 of the Sarbanes-Oxley Act
(18 U.S.C. Section 1350)
99 * Press Release dated May 2, 2006*
* Incorporated by reference herein filed previously with the Securities
and Exchange Commission
(b) Reports on Form 8-K.
8-K filed June 5, 2006 Asset Purchase Agreement
8-K filed July 17, 2006 Change in Directors and cancellation of shares
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SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
NASCENT WINE COMPANY, INC.
- --------------------------------------------------------------------------------
(Registrant)
Signature Title Date
/s/ Sandro Piancone Chief Executive Officer August 21, 2006
- ------------------------
Sandro Piancone
/s/ William Lindberg Chief Financial Officer August 21, 2006
- ------------------------
William Lindberg
/s/ Victor Petrone President August 21, 2006
- ----------------------
Victor Petrone
/s/ Patrick Deparini Secretary August 21, 2006
- ----------------------
Patrick Deparini
16