UNITED STATES
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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[X] Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended February 28, 2002
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WESTMINSTER AUTO RETAILERS INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 13-4032994
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
90 Park Avenue - Suite 1700
New York, New York 10017
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number 212-984-0646
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As of February 28, 2002, the following shares of the Registrant's
common stock were issued and outstanding:
5,000,000 shares of voting common stock
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . . .3
CONDENSED CONSOLIDATED BALANCE SHEET . . . . . . . . .4
CONDENSED CONSOLIDATED INCOME STATEMENT. . . . . . . .5
STATEMENT OF CASH FLOWS. . . . . . . . . . . . . . . .6
Note 1. NATURE OF BUSINESS AND SIGNIFICANT
ACCOUNTING POLICIES. . . . . . . . . . . . .8
Note 2. USE OF OFFICE SPACE. . . . . . . . . . . . .8
Note 3. EARNINGS PER SHARE . . . . . . . . . . . . .9
Note 4. LIQUIDITY . . . . . . . . . . . . . . . . . 9
Note 5. CONTRIBUTED SERVICES . . . . . . . . . . . .9
Note 6. SUBSEQUENT EVENTS . . . . . . . . . . . . . 9
Item 2. Management's Discussion And Analysis or Plan of
Operations. . . . . . . . . . . . . . . . . . . . . .11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . 16
Item 2. Changes in Securities. . . . . . . . . . . . . . . . 16
Item 3. Defaults upon Senior Securities. . . . . . . . . . . 16
Item 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . . . . . 16
Item 5. Other information. . . . . . . . . . . . . . . . . . 15
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . 16
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . 17
PART I - FINANCIAL INFORMATION
To the Board of Directors of WESTMINSTER AUTO RETAILERS, INC.
We have reviewed the accompanying balance sheet of WESTMINSTER
AUTO RETAILERS, INC., (a development stage company) as of
February 28, 2002 and the related statements of operations and
accumulated deficit, and cash flows for the three months then
ended, in accordance with Statements on Standards for Accounting
and Review Services issued by the American Institute of Certified
Public Accountants. All information included in these financial
statements is the representation of the management of WESTMINSTER
AUTO RETAILERS, INC.
A review consists principally of inquiries of Company personnel
and analytical procedures applied to financial data. It is
substantially less in scope than an audit in accordance with
generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material
modifications that should be made to the accompanying financial
statements in order for them to be in conformity with generally
accepted accounting principles.
Graf Repetti & Co., LLP
Dated: New York, New York
April 15, 2002
WESTMINSTER AUTO RETAILERS, INC.
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEET
As Of As Of
February 28, 2002 May 31, 2001
(Unaudited) (Audited)
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ASSETS
Current Assets $ 0 $ 0
Other Assets 0 0
_________ ________
TOTAL ASSETS $ 0 $ 0
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accrued Expenses 23,692 36,300
Other Liabilities
Loan Payable - European Technology
Investments Ltd - Note 6 67,850 38,050
_________ ________
Total Liabilities $91,542 $74,350
Stockholders' Equity
Common Stock, $.001 par value,
Authorized 25,000.000 Shares;
Issued and Outstanding
5,000,000 Shares 5,000 5,000
Additional Paid in Capital 319,545 265,245
Deficit Accumulated During the
Development Stage (416,087) (344,595)
_________ ________
Total Stockholders' Equity (91,542) (74,350)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 0 $ 0
The accompanying notes and accountant's report are an integral
part of these financial statements.
WESTMINSTER AUTO RETAILERS, INC.
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS)
For the 3 Mos Ended For the 3 Mos Ended
February 28 November 30
2002 2001 2001 2000
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TOTAL REVENUES: $ 0 0 0 0
OPERATING EXPENSES:
Accounting 1,750 1,750 1,750 1,750
Legal 5,104 2,500 2,500 2,500
Rent Expense (Note 2)1,200 1,200 1,200 1,200
Filing Fee 13 13 12 13
Contributed Svcs
(Note 3) 17,500 17,500 17,500 17,500
________ _______ ________ ________
NET LOSS (25,567) (22,963) (22,962) (22,963)
NET LOSS PER SHARE (.00) (.00) (.00) (.00)
Weighted Average
Number of Shares
Outstanding 5,000,000 5,000,000 5,000,000 5,000,000
The accompanying notes and accountant's report are an integral
part of these financial statements.
WESTMINSTER AUTO RETAILERS, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS (unaudited)
For the 3 mos For the 3 mos
Ended Ended
to to
February 28, 2002 February 28, 2001
________________________________________
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss $(25,567) $(22,963)
Adjustments to Reconcile Net Loss
to Net Cash Used in operating
Activities:
Additional Paid in Capital
Contributed by Shareholders for:
Rent 600 600
Contributed Services 17,500 17,500
Decrease in Accounts Payable and
Accrued Expenses (14,883) 4,263
________ _________
Total Adjustments 3,217 $22,363
Net Cash Used in
Operating Activities (22,350) ( 600)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Increase in Loan Payable -
European Tech Investments Ltd 22,350 600
________ _________
Net Cash Provided
by Financing Activities 22,350 600
Net Change in Cash 0 0
Cash at Beginning of Period 0 0
Cash at End of Period $ 0 0
Supplemental Disclosure of
Cash Flow Information
Cash Paid During the Period for
Interest Expense 0 0
Corporate Taxes $ 0 0
The accompanying notes and accountant's report are an integral
part of these financial statements.
WESTMINSTER AUTO RETAILERS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2002
NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
A. Description of Company
WESTMINSTER AUTO RETAILERS INC.,("the Company") is a for-profit
organization incorporated under the laws of the State of Delaware
on December 29, 1995, as Tallman Supply Corp. On January 14,
1999 the Company changed its name to Westminster Auto
Retailers Inc.
The Company is a developmental stage company and currently has no
material operations. The directors are now determined that the
Company should become active in seeking potential operating
businesses and business opportunities with the intent to acquire
or merger with such businesses.
B. Basis of Presentation
Financial statements are prepared on the accrual basis of
accounting. Accordingly, revenue is recognized when earned and
expenses when incurred.
C. Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could
differ from these estimates. Significant estimates in the
financial statements include the assumption that the Company will
continue as a going concern.
NOTE 2 - USE OF OFFICE SPACE
The Company uses office space for its executive offices
at two locations. The fair market value of the 600 square
foot office at 45 Mount Pleasant, Putney, London, UK is $200 per
month. The fair market value of the 400 square foot
office at 90 Park Avenue, New York, New York is also $200
per month. The amount for the New York office, which
the Company receives from one of its shareholders at
no cost, is reflected as an expense with a corresponding
credit to additional paid in capital.
NOTE 3 - EARNINGS PER SHARE
FOR THE THREE MONTHS ENDED
FEBRUARY 28, 2002
Net Loss Per Share $ (0.01)
NOTE 4 - LIQUIDITY
The Company's viability as a going concern is dependent upon
raising additional capital, and ultimately, having net income.
The Company's limited operating history, including its losses and
no revenues, primarily reflect the operations of its early stage.
As a result, the Company had from time of inception to February
28, 2002 no revenue and a net loss from operations of $(416,087).
As of February 28, 2002, the Company had net capital deficiency
of $(91,542).
The Company requires additional capital principally to meet its
costs for the implementation of its business plan, for general
and administrative expenses and to fund costs associated with its
operations. It is not anticipated that the Company will be able
to meet its financial obligations through internal net revenue in
the foreseeable future. The Company does not have a working
capital line of credit with any financial institution.
Therefore, future sources of liquidity will be limited to the
Company's ability to obtain additional debt or equity funding.
NOTE 5 - CONTRIBUTED SERVICES
Two of the Company's officers render services on behalf of the
company at no cost. The fair market value is $2,917 per officer
per month. Each amount is reflected as an expense with a
corresponding credit to additional paid in capital.
NOTE 6 - LOAN PAYABLE - EUROPEAN TECHNOLOGY INVESTMENTS LTD.
As of February 28, 2002, European Technology Investments Ltd.,
has paid $67,850 of expenses on behalf of Westminster Auto
Retailers, Inc. European Technology Investments Ltd., will lend
up to $80,000 to the Company upon request. The loan is not
evidenced by a note. The informal agreement calls for no payment
of interest. The Company intends to repay the loan out of any
fundraising that it may carry out or when the company achieves
sustainable revenue.
NOTE 7 - NON-CASH FINANCIAL TRANSACTIONS
Non-cash financing transactions consisting of the cost of
contributed services and rent, and the related additional paid in
capital contributed by shareholders have been included in
expenses and additional paid in capital, respectively, in the
accompanying financial statements at a value of $18,100.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION AND RESULTS OF OPERATIONS
The Company is a development stage company and its principal
business purpose is to locate and consummate a merger or
acquisition with a private entity engaged in the automotive
industry. Because of the Company's current status having no
assets and no recent operating history, in the event the Company
does successfully acquire or merge with an operating business
opportunity, it is likely that the Company's present shareholders
will experience substantial dilution and there will be a probable
change in control of the Company.
During the last quarter, management has been actively seeking a
business to merge with and develop, and although various
discussions have taken place, no agreements have reached or
entered into.
There is no assurance that the Company will be able to identify
and acquire any business opportunity in the automotive industry
which will ultimately prove to be beneficial to the Company and
its shareholders. Any target acquisition or merger candidate of
the Company will become subject to the same reporting
requirements as the Company upon consummation of any such
business combination. Thus, in the event that the Company
successfully completes an acquisition or merger with another
operating business in the automotive industry, the resulting
combined business must provide audited financial statements for
at least the two most recent fiscal years or, in the event that
the combined operating business has been in business less than
two years, audited financial statements will be required from the
period of inception of the target acquisition or merger
candidate.
The selection of a business opportunity in which to participate
is complex and risky. Additionally, as the Company has only
limited resources, it may be difficult to find favorable
opportunities. There can be no assurance that the Company will
be able to identify and acquire any business opportunity in the
automotive industry which will ultimately prove to be beneficial
to the Company and its shareholders. The Company will select any
potential business opportunity based on management's business
judgment. In the event the Company consummates a merger
transaction or acquisition, the Company believes that there will
be a change in control in the Company.
The Company believes that any merger would include the new
issuance of common stock in the Corporation to a potential merger
candidate followed by a reverse split of the Company's issued
common stock thereby effectively passing control of the Company
to the merged candidate.
The Company may seek or target a potential merger candidate which
is outside the United States. It should be noted that there are
inherent risks which may arise for the Company in the event it
does engage in a business transaction with such an outside
entity. Factors relevant to international laws, foreign exchange
rates, duties, taxation and political stability of the targeted
entity's country will all be considered to determine the impact
of such factors on the Company. In the event the Company
believes, in its discretion, that any of the aforementioned
factors create a substantial and uncertain risk for the Company,
then any business transaction with such targeted entity shall not
proceed. Each targeted entity outside the United States will be
evaluated on a case by case basis by the Company to consider the
risks and factors inherent to consummating a business transaction
with such entity.
The Company has no recent operating history and no representation
is made, nor is any intended, that the Company will be able to
carry on future business activities successfully in the
automotive industry. Further, there can be no assurance that the
Company will have the ability to acquire or merge with an
operating business, develop sustaining business opportunities or
acquire property that will be of material value to the Company.
In this case the company will seek an acquisition or merger
candidate outside of the automotive industry. In the opinion of
management, inflation has not and will not have a material
affecton the operations of the Company as it does not currently
have any significant assets, debt or income.
There is no assurance that the Company will be able to obtain
additional funding when and if needed, or that such funding, if
available, can be obtained on terms acceptable to the Company.
The Company will not borrow funds for the purpose of funding
payments to the Company's promoters, management or their
affiliates or associates. Any funds borrowed by the Company will
be utilized to pay statutory, legal and accountant fees expended
by the Company.
In the event the Company is required or needs to hire independent
consultants, the Company will consider as criteria for hiring
such consultant the area of expertise which it will require the
consultant to be knowledgeable with, the experience of the
consultant in the particular field, the education of the
consultant, the cost to the Company to retain such consultant and
the availability of the consultant for the purpose of devoting
its time and effort to the Company.
The Company will not borrow funds for the purpose of funding
payments to the Company's promoters, management or their
affiliates or associates. Any funds borrowed by the Company will
be utilized to pay statutory, legal and accountant fees expended
by the Company.
The Company does not foresee that any terms of sale of the shares
presently held by officers and/or directors of the Company will
also be afforded to all other shareholders of the Company on
similar terms and conditions.
Management does not anticipate actively negotiating or otherwise
consenting to the purchase of any portion of their common stock
as a condition to or in connection with a proposed merger or
acquisition. In such an instance, all shareholders are to be
treated equally. This policy is upheld by the inclusion of a
resolution of the Board of Director's of the Company, contained
in the Company's minutes. In the event management wishes to
actively negotiating or otherwise consenting to the purchase of
any portion of their common stock as a condition to or in
connection with a proposed merger or acquisition, this would need
to be disclosed to the Board of Directors and entered into the
Company's minutes. The company's shareholders will be afforded
an opportunity to approve or consent to any particular stock buy-
out transaction or merger.
The Company has not adopted a policy relating to a cash finder's
fee to anyone who locates a transaction which is consummated by
the Company. The Company does not intend to issue securities
(debt or equity) as a finder's fee. Finder's fees will not be
payable to officers, directors or promoters of the company and no
action. For this reason, no plan of action has currently been
undertaken to prevent any conflict of interest regarding the
payment of such fees to officers, directors or promoters of the
company.
There is no present potential that the Company may acquire or
merge with a business or company in which the Company's
promoters, management or their affiliates or associates, directly
or indirectly, have an ownership interest. Existing corporate
policy does not permit such transactions, unless disclosed by the
individual with such interest and consent to by the Board of
Directors. This policy based upon an understanding between
management and the Board of Directors. Management is unaware of
any circumstances under which this policy, through its own
initiative, may be changed.
In searching and targeting a merger or acquisition candidate, the
Company will analyze the financial viability of a candidate along
with its historic performance to ascertain the profitability of a
potential candidate. Vital to this analysis shall be the
financial statements of the candidate, with attention to
profit/loss before taxes, and the candidates net asset value.
The Company will not consider a candidate with excessive debt or
which is highly leveraged. The Company will also consider the
management expertise and experience of a candidate.
In the event there is a downturn in the economy, the Company
believes that the automotive industry would experience a drop in
sales. If this occurs at a time when the Company has not
acquired or merged with an operating business or has not generate
substantial revenue, then the Company will re-evaluate its plans
as it believes it would not be financially sound to implement
entry into the automotive industry during a downturn. The
Company however may benefit from a downturn in the economy as a
potential merger or acquisition candidate can be assessed with a
lesser asset valuation thereby affording the company a better
opportunity to consummate a business transaction.
LIQUIDITY
The Company's viability as a going concern is dependent upon
raising additional capital, and ultimately, having net income.
The Company requires additional capital principally to meet its
costs for the implementation of its business plan, for general
and administrative expenses and to fund costs associated with
start up and trading of retail outlets. It is not anticipated
that the Company will be able to meet its financial obligations
through internal net revenue in the foreseeable future. The
Company does not have a working capital line of credit with
any financial institution. Therefore, future sources of
liquidity will be limited to the Company's ability to obtain
additional debt or equity funding. The Company anticipates that
its existing capital resources will enable it to maintain its
current implemented operations for at least 12 months, however,
full implementation of its business plan is dependent upon its
ability to raise substantial funding. Management's plan is to
find and consummate a merger or business acquisition in order to
maximize the benefit of ownership by shareholders in the Company.
The selection of a business opportunity in which to participate
is complex and risky. Additionally, as the Company has only
limited resources, it may be difficult to find favorable
opportunities. There can be no assurance that the Company will
be able to identify and acquire any business opportunity which
will ultimately prove to be beneficial to the Company and its
shareholders. The Company will select any potential business
opportunity based on management's business judgment.
Because the Company lacks funds, it may be necessary for the
officers and directors to either advance funds to the Company or
to accrue expenses until such time as the Company begins to
generate sufficient income to cover such expenses. Management
intends to hold expenses to a minimum and to obtain services on a
contingency basis when possible. Further, the Company's
directors will forego any compensation until such time as the
Company begins to generate sufficient income to cover such
expenses. However, if the Company engages outside advisors or
consultants in search for business opportunities, it may be
necessary for the Company to attempt to raise additional funds.
There is no assurance that the Company will be able to obtain
additional funding when and if needed, or that such funding, if
available, can be obtained on terms acceptable to the Company.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are currently no pending legal proceedings against the
company.
Item 2. Changes in Securities
There has been no change in the Company's securities.
Item 3. Defaults upon Senior Securities
There has been no default in the payment of principal, interest,
sinking or purchase fund installment.
Item 4. Submission of Matters to a Vote of Security Holders
No matter has been submitted to a vote of security holders during
the period covered by this report.
Item 5. Other information
There is no other information to report which is material to the
company's financial condition not previously reported.
Item 6. Exhibits and Reports on Form 8-K
There are no Exhibits or reports on Form 8-K attached hereto.
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
WESTMINSTER AUTO RETAILERS INC.
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(Registrant)
Date: April 16, 2002
By: /s/ B.R. Parker
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President