SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 2
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
NEW ENGLAND ACQUISITIONS, INC.
(Name of small business Issuer in its charter)
Florida 6799 65-1102237
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification No.)
incorporation or
organization)
5 Ridge Road, Cos Cob, CT 06807 203-622-1848
(Address and Telephone Number of Principal Executive Offices
and Principal Place of Business)
Gary Cella
5 Ridge Road
Cos Cob, CT 06807
203-622-1848
(Name, Address and Telephone Number of Agent for Service)
Copies to:
Jonathan B. Reisman, Esq.
Reisman & Associates, P.A.
6975 NW 62nd Terrace
Parkland, Florida 33067
2
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If this Form is filed to register additional securities for an offering
pursuant to 462(b) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. 9
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. 9
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. 9
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. 9
Prospectus
New England Acquisitions, Inc.
During 2001, we sold 7,500 shares of our common stock in our initial public
offering at $2.00 per share. All of the proceeds have been deposited in an
escrow account.
In March 2002, we entered into an Asset and Rights Purchase Agreement with ADM
Tronics Unlimited, Inc. to purchase from ADM Tronics certain rights to an
ethnic shave cream, a burn lotion and a medical device designed to treat a
condition known as tinnitus. The terms of the agreement and the nature of the
products and rights are more fully described later in this prospectus.
Each purchaser of the 7,500 shares has 20 business days from the date of this
prospectus to notify us in writing that the purchaser elects to remain an
investor. The transaction with ADM Tronics will not be consummated unless the
purchasers of at least 7,000 of those shares confirm their investments to us.
Purchasers who do not confirm their investment within the 20 day period will
receive a refund of their purchase price plus interest. If we receive
confirmation from the purchasers of at least 7,000 shares and we consummate
the transaction with ADM Tronics, the funds not returned to non-confirming
purchasers will be released to us from the escrow account and certificates
representing shares of our common stock will be delivered to the confirming
purchasers.
This prospectus also relates to 200,000 shares of our common stock which may
be offered and sold from time to time by selling stockholders. We will not
receive any proceeds from the shares sold by the selling stockholders. The
selling stockholders may sell their shares in one or more transactions on the
over-the-counter market, in negotiated transactions, or through a combination
of those methods of distribution, at an initial public offering price of $2.00
per share. The selling stockholders intend to begin their offering shortly
after funds are released to us from the escrow account and to end their
offering within six months after it begins.
3
There has never been and may never be a public market for our common stock.
An investment in the shares involves substantial risks and is highly
speculative. See "Risk Factors" beginning on page 4 of this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary
is a criminal offense.
The date of this prospectus is ___________, 2002
In making a decision whether to confirm your investment or to buy our common
stock, you should only rely on the information contained in this prospectus.
We have not authorized anyone to provide you with any different or other
information. The information in this prospectus may only be accurate on the
date of this prospectus.
PROSPECTUS SUMMARY
You should read the entire prospectus carefully before making an investment
decision. In this prospectus, references to "we", "us" and "our" refer to New
England Acquisitions, Inc.
Our proposed business
Subject to the satisfaction of the requirements of Rule 419 under the
Securities Act of 1933, we intend to purchase from ADM Tronics Unlimited, Inc.
certain rights to an ethnic shave cream, a burn lotion and a medical device
designed to treat a condition known as tinnitus. We cannot assure you that if
we consummate the purchase we will be successful in marketing any of the
products.
Corporate information
We are a Florida corporation formed on April 18, 2001. Our executive offices
are located at 5 Ridge Road, Cos Cob, CT 06807 and our telephone number is
203-622-1848.
Applicable Requirements of Rule 419
All 7,500 shares issued in connection with our initial public offering and the
gross proceeds from the offering have been deposited into an escrow account.
Although we were entitled to have 10% of the proceeds released to us, we chose
to allow all the funds to remain in the escrow account. The deposited
proceeds and any interest or dividends are being held for the sole benefit of
the purchasers of the shares. We are required to file an amendment to our
registration statement with the SEC when we sign an acquisition agreement for
which the fair value of the net assets to be acquired represents at least 80
percent of the maximum offering proceeds. We have filed the amendment of
which this prospectus is a part. Within five business days after the
effective date of the amendment, we will send to each purchaser of the 7,500
shares a copy of this prospectus. Each purchaser will have 20 business days
from the date of this prospectus to notify us in writing that the purchaser
elects to remain an investor. The transaction with ADM Tronics will be
consummated if a purchasers holding at least 7,000 shares confirm their
investments. If we receive confirmation from the purchasers of at least 7,000
shares and we consummate the transaction with ADM Tronics, the funds not
returned to non-confirming purchasers will be released to us from the escrow
account and certificates representing shares of our common stock will be
delivered to the confirming purchasers. If a requisite acquisition has not
occurred prior to March 28, 2003, all funds then held in the escrow account
will be returned to the purchasers.
4
The Selling Stockholders' Offering
Common Stock to be offered 200,000 shares.
by the selling stockholders
Commencement of selling Stockholders'
offering Shortly after funds are released to us
from the escrow account.
We do not believe that Rule 419 applies to the selling stockholders' offering
Summary Financial Information
The following table is a summary of our balance sheet and should be read in
conjunction with Management's Plan of Operation, the financial statements and
the notes to the financial statements which are contained elsewhere in this
prospectus.
BALANCE SHEET
<s> <c>
March 31, 2002
TOTAL ASSETS $15,100
STOCKHOLDERS' DEFICIT $(12,434)
5
RISK FACTORS
An investment in our common stock involves substantial risks. You should
consider carefully the following information about these risks, together with
the financial and other information contained in this prospectus, before you
decide whether to buy our common stock. If any of these risks actually occur,
our business, financial condition and results of operations would likely
suffer. In such case, you might lose all or part of your investment.
RISKS RELATED TO OUR PROPOSED BUSINESS
Because we have no operating history and neither of our officers has had any
prior experience in the management of a company marketing the type of products
we intend to acquire form ADM Tronics , there is no basis on which you can
evaluate our proposed business and prospects. We were incorporated in April
2001 and have never had any operations. We are the first blank check company
in which either of our officers has ever been involved.
Because of the limited capital available to us for the foreseeable future, we
may not have sufficient capital to remain in existence or market the products
which we propose to acquire, in either of which cases, purchasers who confirm
their investment can expect to lose all of their investment. In addition to
marketing expenses, we will incur legal and accounting expenses to comply with
our reporting obligations to the SEC as well as operating expenses. If we
fail to pay the required annual fees to the state of Florida, we will be
dissolved and cease to exist. If we consummate the transaction with ADM
Tronics, we anticipate that our the funds released to us from the escrow
account will be sufficient to meet our anticipated capital requirements for
less than six months. We intend to obtain additional capital primarily
through the private sale of equity securities to be issued by us. If
additional funds are raised through the issuance of equity securities, the
percentage ownership of our stockholders will be reduced; stockholders may
experience dilution; and those securities may have rights, preferences or
privileges senior to those of the rights of the holders of our common stock.
We cannot assure you that additional financing will be available on terms
favorable to us, if at all. Since our sale of 7,500 shares, we have not yet
offered any securities for sale other then to ADM Tronics in connection with
our proposed acquisition. We cannot assure you that we will be able to sell
any securities on terms acceptable to us, if at all.
We do not have a feasibility study, independent analysis or current market
survey in connection with the products we intend to acquire. Feasibility
studies, analyses and surveys are widely used to give a fuller and more useful
view of a target company or products. Because we have not obtained any of
them, we may not be aware of many very important facts and circumstances
concerning the products that we intend to acquire.
Although ADM Tronics has had the products that we intend to acquire from it
for a considerable length of time, ADM Tronics has made only limited sales of
those products. If we are to be successful, we will have to make significant
sales of at least one of the products.
6
Because our officers and directors hold similar positions in other blank check
companies, conflicts of interest that may arise may not be resolved in our
favor. Conflicts may arise in such important matters as selecting an entity
to acquire and allocation of expenses.
Although our financial statements have been prepared assuming that we will
continue as a going concern, we are not now a going concern and if we fail to
become a going concern, purchasers who confirm their investment can expect to
lose the full amount of their investment. The report of our independent
auditor refers to the uncertainty of our becoming a going concern.
RISKS RELATED TO THIS OFFERING
If the shares are released to you from the escrow account and a viable public
market for them does not develop, you will not be able to easily sell your
shares, if at all. There has not been and may never be a public market for
our shares and we cannot assure you that a public market will ever develop.
We cannot predict the extent, if any, to which investor interest in our
company will lead to the development of a viable trading market in our shares.
The large number of shares eligible for public sale after this offering can be
expected to adversely affect the prices that will prevail in the trading
market, if one develops. We have registered 200,000 shares for resale by our
management and we have verbally agreed to register all of their other shares
upon their request after funds are released to us from the escrow account.
Sales of significant amounts of our shares in the public market or the
perception that such sales will occur, can materially adversely affect the
market price of the shares or our ability to raise capital through future
offerings of equity securities.
7
FORWARD-LOOKING STATEMENTS
Many statements made or incorporated by reference in this prospectus are
"forward-looking statements." These forward-looking statements include
statements about:
- our ability to make an acquisition
- our capital needs
- the competitiveness of the business in our industry
- our strategies
- other statements that are not historical facts
When used in this prospectus, the words "anticipate", "believe", "expect",
"estimate", "intend" and similar expressions are generally intended to
identify forward-looking statements. Because these forward-looking statements
involve risks and uncertainties, there are important factors that could cause
our actual results to differ materially from those expressed or implied by
these forward-looking statements, including:
- changes in general economic and business conditions
- actions of our competitors
- the time and expense involved in development activities
- changes in our business strategies
- other factors discussed in the "a significant acquisition
becomes probable Risk Factors" section and elsewhere in this
prospectus.
The forward-looking statements in this prospectus reflect what we currently
anticipate will happen. What actually happens could differ materially from
what we currently anticipate will happen. We are not promising to make any
public announcement when we think forward-looking statements in this
prospectus are no longer accurate whether as a result of new information, what
actually happens in the future or for any other reason.
8
USE OF PROCEEDS
If we receive confirmation from the purchasers of at least 7,000 shares and we
consummate the transaction with ADM Tronics, we will receive approximately
$14,000 to $15,000 in funds released to us from the escrow account. We intend
to use the net proceeds for administrative expenses and the exploitation of
the products that we acquire.
Our officers have advanced the expenses of our public offering which amounted
to approximately $18,500, including legal fees of $10,000. Our officers have
agreed to defer reimbursement of the expenses until the time, if any, that we
become a going concern.
Pending use, we intend to invest the funds released to us from the escrow
account in one or more of the following:
- an obligation that constitutes a "deposit", as that term is defined
in section 3(l) of the Federal Deposit Insurance Act;
- securities of a money market mutual fund; or
- securities that are direct obligations of, or obligations guaranteed
as to principal or interest by, the United States provided the
securities can be readily sold or otherwise disposed of for cash at
the time required without any dissipation of offering proceeds
invested.
DIVIDEND POLICY
We have never declared or paid any cash dividends on our capital stock and do
not anticipate paying any cash dividends on our capital stock in the
foreseeable future. Future dividends, if any, will be determined by our Board
of Directors. In addition, we may incur indebtedness in the future which may
prohibit or effectively restrict the payment of dividends, although we have no
current plans to do so.
9
MANAGEMENT'S PLAN OF OPERATION
The following should be read in conjunction with our financial statements and
the related notes that appear elsewhere in this prospectus. 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 and
elsewhere in this prospectus, particularly in "Risk Factors."
We have not had any 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. In view of the limited amount of
funds available to us, we may exhaust our limited financial resources before
locating an acquisition candidate.
If we consummate the transaction with ADM Tronics, subject to the availability
of sufficient capital, we intend to aggressively market the products we
obtain. Because we have not yet developed the details of a marketing program,
we cannot now determine the cost of any marketing program that we may utilize.
We do not expect to purchase or sell any significant equipment, engage in
product research or development and do not expect any significant changes in
the number of our employees.
10
PROPOSED BUSINESS
AGREEMENTS WITH ADM TRONICS UNLIMITED, INC.
In March 2002, we entered into an Asset and Rights Purchase Agreement with ADM
Tronics Unlimited, Inc. to purchase from ADM Tronics certain rights to an
ethnic shave cream, a burn lotion and a medical device known as the Aurex-3
which has been designed to treat a condition known as tinnitus. The terms of
the agreement and the nature of the products and rights are more fully
described below. We are not obligated to consummate the transaction with ADM
Tronics unless the purchasers of not less than 7,000 shares purchased in our
initial public offering confirm their investments. The purchase price to be
paid to ADM Tronics for the sale and transfer of the assets and rights is
150,375 shares of our common stock and the payments described below.
If we acquire the products from ADM Tronics, we will enter into an exclusive
manufacturing agreement with ADM Tronics under which ADM Tronics will
manufacture the ethnic shave cream, burn lotion and the Aurex-3 for us. ADM
Tronics will also maintain raw material supplies and finished goods as
necessary and provide oversight and guidance with respect to regulatory
requirements regarding the marketing of the products. Under the manufacturing
agreement, we have agreed with ADM Tronics that ADM Tronics will be the
exclusive manufacturer of the products that we purchase from it as well as all
other medical products, topical and cosmetic products which we may acquire and
distribute. The price that we will pay to ADM Tronics for products that it
manufactures for us will be 120% of ADM Tronics' cost of all raw materials and
all supplies and direct labor and an overhead allocation. In addition, we
will reimburse ADM Tronics for any tooling or non-recurring engineering
services that are required to be secured in support of the manufacturing of
our products.
If we acquire the products, we will issue to ADM Tronics 150,375 shares of
our common stock and pay ADM Tronics a royalty of 6% of gross sales of the
products, less discounts, returns and allowances. We will also pay consulting
fees and related expenses for any time expended by ADM Tronics' employees for
any services related to the products other than manufacturing activities. The
fees and expenses, which we do not expect will be material, will be agreed
upon by ADM Tronics and us in advance of any of the services.
11
THE PRODUCTS
ETHNIC SHAVE CREAM
ADM Tronics developed an ethnic shave cream that has an extremely high degree
of lubricity. We have been advised by ADM Tronics that, because of its
lubricity, the ethnic shave cream allows for very close shaves with reduced
nicks, cuts and discomfort. ADM Tronics has also advised us that the ethnic
shave cream leaves the skin with an improved feel and softness.
We believe that because of the characteristics of the ethnic shave cream, it
is especially well suited for use by men with a debilitating and painful skin
condition known as Pseudofolliculitus Barbae, commonly referred to as PFB or
razor bumps. Razor bumps are created when the growing beard hairs exit the
skin, curl over, and burrow into the adjacent skin. This creates a foreign
body reaction resulting in an unsightly "bump." Razor bumps commonly form on
the beard areas of black men and about 15-20% of non-black men. Black women
also experience the problem on the chin area, in the bikini line and under
armpits as a result of waxing or shaving.
More than ten years ago, ADM Tronics conducted limited market research to
determine the potential for the ethnic shave cream as an ethnic product. The
market research consisted primarily of interviews with 200 black males in
Washington, D.C. and New York and the examination and analysis of publicly
available statistical information. ADM Tronics spent approximately $60,000 to
obtain the market research. Among the findings are the following:
- Approximately 65% of black males between the ages of 18 and 24 have
shaving problems and approximately 50% thereof have severe shaving
problems beyond discomfort. Many products then generally available
have severe unpleasant odors.
- Approximately 64% of black males shaved at least three or four times
per week.
- There were then approximately 9,600,000 black males between the ages
of 18 and 24.
- No product with which the ethnic shave cream would compete was a
dominant factor in the ethnic shave cream market.
12
More recent figures from sources that we believe are accurate reveal that
there are 35 million black people in the United States comprising
approximately 13% of the total population. This population segment is expected
to grow nearly twice as fast as the rest of the population over the next fifty
years. In 2000, black Americans spent approximately $5.2 billion on personal
care products and services, an increase of 6% over the previous year.
Under the Asset and Rights Purchase Agreement, we intend to acquire rights
relating to ADM Tronics' ethnic shave cream for sale by us under our own
label. We may not sell the ethnic shave cream under any trademarks, trade
names or designations used by ADM Tronics. We also intend to acquire rights
relating to any other shave creams developed by or to be developed by ADM
Tronics or any of its subsidiaries. ADM Tronics may continue to market an
ethnic shave cream without limitations to its existing customers. The shave
cream marketed to those customers has a different fragrance and less lubricity
than does the ethnic shave cream that we intend to purchase from ADM Tronics.
ADM Tronics began selling ethnic shave cream in 1988. Since that time it has
realized net sales of approximately $45,000. From January 1, 2000 through
April 30, 2002, AM Tronics' existing customers have purchased ethnic shave
cream from ADM Tronics for approximately $8,000. Because ADM Tronics is
primarily a product developer and manufacturer, it has not actively promoted
sales of ethnic shave cream since 1992.
Unless we pay ADM Tronics minimum royalties of (a) $10,000 within one year
from date of our acquisition of rights to the ethnic shave cream, (b) an
additional $14,000 within two years from that date and (c) additional amounts
each following year of not less than 110% of the minimum royalty for the
immediately preceding year, ADM Tronics may market ethnic shave creams to
others without limitation.
THE BURN LOTION
ADM Tronics developed a dermatological lotion in 1988. The lotion is intended
to relieve pain and itching associated with burns, sunburns, minor cuts,
scrapes, insect bites and skin irritation. The lotion accomplishes its
soothing effect by producing an immediate cooling sensation to the skin. The
lotion is also a film-former and is capable of covering affected areas with a
thin breathable layer of lotion. ADM Tronics believes that the lotion
promotes improved healing and moisture retention while, at the same time,
allowing permeation of oxygen to the affected area to promote more effective
healing. ADM Tronics further believes that the lotion is at least as, if not
more effective, than any other generally available non-prescription burn
ointment or first-aid cream.
Under the Asset and Rights Purchase Agreement, we intend to acquire rights
relating to ADM Tronics' burn lotion for sale by us under our own label. We
may not sell the lotion under any trademarks, trade names or designations
used by ADM Tronics.
We must pay $25,000 to ADM Tronics in advance of the initiation of production
of the burn lotion for ADM Tronics' expenses and establishment of regulatory
support and processes for the distribution of the burn lotion by us. If we do
not make the payment within one year from the consummation of the transaction
with ADM Tronics, we will lose the exclusive rights to the burn lotion.
13
AUREX-3
In 1997 ADM Tronics developed an electronic device known as the Aurex-3 for
the treatment of tinnitus. Tinnitus is a human medical condition which
manifests itself in a constant and annoying ringing in the ears.
There are many possible causes for subjective Tinnitus, the noise only the
patient can hear. Most of the causes are not serious. Tinnitus can also be a
symptom of more serious middle ear problems such as infection, a hole in the
eardrum, an accumulation of fluid or stiffening (otosclerosis) of the middle
ear bones. Occasionally causes may be due to a head and neck aneurysm or
acoustic neuroma. Tinnitus may also be caused by allergy, high or low blood
pressure, a tumor, diabetes, thyroid problems, injury to the head or neck, and
a variety of prescribed drugs including: anti-inflammatory, antibiotics,
sedatives/antidepressants and painkillers.
Most tinnitus comes from damage to the microscopic endings of the hearing
nerve in the inner ear. The health of these nerve endings is important for
acute hearing, and injury to them brings on hearing loss and tinnitus.
Advancing age is generally accompanied by a certain amount of hearing nerve
impairment and often tinnitus. Exposure to loud noises is probably the
leading cause of tinnitus today.
The Aurex-3 is designed to treat tinnitus through the use of a probe that
transmits a vibratory and audio signal. Although significant testing of the
Aurex-3 has not been conducted, pre-production and production prototypes were
built by ADM Tronics and testing and marketing strategies were developed.
To use the Aurex-3, a pencil like probe is placed in the small indent behind
the ear pressing backwards onto the mastoid bone. The device is difficult to
use, needing patience, practice and encouragement. Mechanical vibrations are
generated by a self-tuned control unit and transmitted through the applicator
probe into the mastoid bone. By positioning the probe correctly, the
vibrations develop as a deep feeling within the head. The user then alters
the frequency and amplitude settings to obtain a complementary, often masking,
sensation to the tinnitus. Fine tuning is then introduced whereby complex
harmonic frequencies are introduced to create a comforting or soporific
feeling. When this point is reached, the tinnitus may be fully masked or if
it is heard, it may not be uncomfortable. User patterns will vary, but
typical treatments consist of 3 to 5 minutes duration, 3 times a day for the
first two weeks. As benefits are realized, the number of treatments may be
reduced and the intervals increased.
14
The Aurex-3 will not benefit all tinnitus sufferers. For example, sufferers
of non-noise induced tinnitus may generally not experience any improvement in
their symptoms
In May 1998, a Premarket Notification was filed by ADM Tronics with the United
States Food and Drug Administration. In August 1998, the United States Patent
Office issued a patent with respect to the Aurex-3 and the FDA notified the
Company that the Premarket Notification was accepted. Therefore, the Aurex-3
was cleared for marketing in the United States for its intended indication,
"The treatment and control of tinnitus."
From August 1998 to November 1999, ADM Tronics finalized manufacturing plans
for the Aurex-3. In July 1999, advance orders for Aurex-3 units from
distributors and patients. In November 1999, ADM Tronics began to deliver the
units. Since that time through April 30, 2002, ADM Tronics' net sales of the
Aurex-3 have been approximately $185,000 of which $95,000 represented sales in
the United States.
At the end of December 1999, 6 Aurex-3 devices were made available to the
Dutch Commission on Tinnitus & Hyperacusis. On December 24, 1999, six
participants were examined by the Dutch Commission for their tinnitus and
trained in the use of the Aurex-3 by an audiologist and adviser of the group.
After a six-week trial period with six participants, the Dutch Commission
concluded that no positive results could be reported. Although the Dutch
Commission tentatively concluded that the Aurex-3 seldom or never has a
positive effect on tinnitus, especially on high frequency tinnitus, it did not
exclude the possibility that application of the Aurex-3 on patients with a low
tone tinnitus might show better results.
We have been advised by ADM Tronics that it believes that the Dutch
Commission's conclusions are flawed primarily because of the small number of
participants and the probable selection of participants whose condition could
not be improved through the use of the Aurex-3. ADM Tronics has further
advised us that, in its experience, if potential users of the Aurex-3 are pre-
screened to eliminate those with non-noise induced or variable intensity
tinnitus, more than 60% of the users of the Aurex-3 have experienced
significant improvement.
Under the Asset and Rights Purchase Agreement, we will acquire the use of all
permits, approvals, licenses and authorizations held by ADM Tronics relating
to the marketing of the Aurex-3. We will only be permitted to market the
Aurex-3 in the United States where our marketing rights will be exclusive
except for sales by ADM Tronics' to an existing customer. ADM Tronics' sales
to that customer have amounted to approximately $10,000.
In the event that we do not purchase a minimum of 90 Aurex-3 devices from ADM
Tronics within one year from the consummation of the transaction with ADM,
with the minimum to increase by 10% above the previous year's minimum for each
following year, ADM Tronics shall have the right to terminate our exclusivity
with respect to the Aurex-3.
15
MARKETING
We plan to initially utilize a phased communications and distribution strategy
to market the ethnic shave cream. We intend to begin with New York City and
the Bahamas. New York City has the largest African-American population of
cities in the U.S. The Bahamians are predominantly black and, we believe,
will constitute a useful and economic test market for the product. In the
first phase a communications piece will be developed and mailed, or emailed to
personal care retail distribution units throughout the boroughs of Manhattan,
Brooklyn, Queens in New York City and the island of New Providence (which
includes the city of Nassau) in the Bahamas. Orders will be taken from a
website, or by replying to the direct mail campaign. In the second phase,
communications will be sent to Philadelphia, Baltimore and Washington, Chicago
and Detroit, Houston, Memphis, New Orleans, and, subsequently, Los Angeles.
In the third phase, we intend to hire sales person to visit large distributors
to retail stores. Our estimated initial expenditures are $50,000 for the
design and development of our website and its maintenance for the first year,
$2,000 for the purchase of lists, and $15,000 for the development, production
and distribution of hard copy and offline mail messages.
We also plan to use a phased communications and distribution strategy to
market the Aurex-3. In the first phase, a communications piece will be
developed and mailed, or emailed to hearing aid distribution units in the
U.S.. Orders can be made from a website, or by replying to the direct mail
campaign. In the second phase, we intend to hire a sales person to visit large
distributors. Our estimated initial expenditures are $50,000 for the design
and development of our website and its maintenance for the first year, and
$15,000 for the development, production and distribution of hard copy and
offline mail messages.
We do not have any immediate plans to market the burn lotion.
We cannot begin our marketing efforts unless we obtain additional capital. We
cannot assure you that we can obtain the capital on terms acceptable to us, if
at all, or that our marketing efforts will be successful.
COMPETITION
We expect to encounter intense competition in our effort to market the
products that we obtain from ADM Tronics. Substantially all our competitors
will have significantly greater experience, resources and managerial
capabilities than we do.
16
EMPLOYEES
We have no employees other than our executive officers. To the extent we have
sufficient capital, we expect to use consultants, attorneys and accountants as
necessary, and do not anticipate a need to engage any full-time employees.
FACILITIES
Our President has agreed to provide office space to us at no charge for at
least one year from the date of this prospectus.
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The following sets forth certain information with respect to our executive
officers and directors. Each director holds such position until the next
annual meeting of our shareholders and until his respective successor has been
elected and qualifies.
- ------------------- --- ---------------------------------
Name Age Positions
- ------------------- --- ---------------------------------
Gary Cella 44 President, Treasurer and Director
Jonathan B. Reisman 59 Secretary and Director
- ------------------- --- ---------------------------------
Any of our directors may be removed with or without cause at any time by the
vote of the holders of not less than a majority of our then outstanding common
stock. Officers are elected annually by the Board of Directors. Any of our
officers may be removed with or without cause at any time by our Board of
Directors.
Messrs Cella and Reisman, who are our founders, have held their positions with
us since our inception.
Mr. Cella has been a self-employed marketing and sales consultant for more
than five years. Mr. Cella's consulting services to his clients have included
advice on marketing, advertising, product and market expansion and sources of
capital. Mr. Cella has been a Vice President, Secretary, Treasurer and a
member of the Board of Directors of Accelerated Globalization, Inc., a
development stage company, since November 2000. Accelerated seeks to provide
strategic business solutions to small and middle sized companies that are
seeking to expand their markets to other portions of the world.
17
Mr. Reisman practices law with and has been the President of Reisman &
Associates, P.A. for more than five years.
Both Messrs. Cella and Reisman will only devote a small portion of their time
to us. They intend to communicate periodically, primarily by telephone, to
discuss our affairs and to review our operations. Any conflicts of interest
that arise affecting Messrs. Cella and Reisman and us will be resolved by them
in a manner which they deem will be fair. You may not agree with their
determination. If you have any doubt about the abilities or integrity of
Messrs. Cella and Reisman, you should not confirm your investment.
EXECUTIVE COMPENSATION
We have no agreements relating to compensation with either of Messrs. Cella or
Reisman, including consulting agreements. The compensation of our executive
officers will be determined by our Board of Directors.
PROVISIONS OF RULE 419 UNDER THE SECURITIES ACT OF 1933
We are subject to the requirements of Rule 419 which, as applicable to us, are
summarized below:
ESCROW ACCOUNT
All shares issued in connection with this offering and the gross
proceeds from the initial public offering must be deposited promptly
into an escrow account. Although $1,500 of the proceeds deposited in
the escrow account could have been released to us, we chose to retain
those funds in the escrow account. Any other securities issued with
respect to the shares, including securities issued with respect to
stock splits, stock dividends, or similar rights, must also be
deposited directly into the account. The deposited proceeds and any
interest or dividends will be held for the sole benefit of the
purchasers of the shares. The deposited proceeds may be invested as
described under "Use of Proceeds." Interest or dividends earned on
the funds, if any, will be held in the escrow account until the funds
may be released. If funds held in the account are released to
purchasers of the shares, the purchasers will receive interest or
dividends earned, if any, on their funds. If the funds are released
to us, we will receive any interest or dividends earned up to the date
of release. The purchasers of the shares and any other voting
securities held in the escrow account have the right to vote the
shares held in their names, as provided by Florida law. None of the
securities held in the escrow account or any interest related to the
securities may be transferred or otherwise disposed of other than by
will or the laws of descent and distribution, or pursuant to a
qualified domestic relations order as defined by the Internal Revenue
Code of 1986 as amended, or Title 1 of the Employee Retirement Income
Security Act, or the rules thereunder.
18
If any warrants, convertible securities or other derivative securities
relating to securities are held in the escrow account, they may be
exercised or converted in accordance with their terms; provided,
however, that securities received upon exercise or conversion,
together with any cash or other consideration paid in connection with
the exercise or conversion, are promptly deposited into the account.
Upon request by the SEC or its staff, we will furnish them with the
names and addresses of persons for whom securities are held in the
escrow account.
REQUIRED FILING OF AMENDMENTS TO OUR REGISTRATION STATEMENT
If, during any period in which offers or sales of the shares are being
made, a significant acquisition becomes probable, we must file
promptly an amendment to our registration statement with the SEC which
will disclose the acquisition. During that period, a significant
acquisition did not become probable
When we sign an agreement for the acquisition of a business or assets
that will constitute the business (or a line of business) and for
which the fair value of the business(es) or net assets to be acquired
represents at least 80 percent of the maximum offering proceeds, we
must file an amendment to our registration statement with the SEC
that:
- discloses information required by the SEC, including our
financial statements and the financial statements of the
company acquired or to be acquired and pro forma financial
information; and
- discloses the results of the offering, the terms of the
offering and other requisite information.
19
REQUIRED TERMS OF THE OFFERING AND SATISFACTION OF CONDITIONS
Within five business days after the effective date of the amendment(s)
to our registration statement, we must send by first class mail or
other equally prompt means, to each purchaser of our securities held
in the escrow account, a copy of the prospectus contained in the
amendment and any amendment or supplement to the prospectus. Each
purchaser will have no fewer than 20 business days and no more than 45
business days from the effective date of the amendment to notify us in
writing that the purchaser elects to remain an investor. We have
chosen to limit the period to 20 days. If we do not receive the
notification by the 20th business day following the effective date of
the amendment, we will send the funds and interest or dividends, if
any, held in the escrow account for the benefit of non-notifying
purchasers to those purchasers within five business days. The
acquisition meeting the foregoing criteria will be consummated if a
sufficient number of purchasers confirm their investments. We have
designated that number as the purchasers of at least 7,000 shares.
RELEASE OF FUNDS AND SECURITIES FROM THE ESCROW ACCOUNT
Funds held in the escrow account may be released to us and securities
may be delivered to the purchasers or other registered holders
identified on the deposited securities only at the same time as or
after:
- The escrow agent has received a signed representation from
us, together with other evidence acceptable to it, that the
requirements with respect to the terms of the offering and
filing with the SEC when we sign an agreement as described
above have been met; and
- consummation of an acquisition(s) meeting the above
described requirements.
If funds and securities are released from the escrow account to us as
described above, our prospectus will be supplemented to indicate the
amount of funds and securities released and the date of the release.
We will furnish to our security holders audited financial statements
for our first full fiscal year of operations following consummation of
an acquisition, together with other required information no later
than 90 days after the end of the fiscal year and file the financial
statements and additional information with the SEC.
If a consummated acquisition meeting the criteria described above has
not occurred not prior to March 28, 2003, funds held in the escrow
account will be returned to the purchasers.
20
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of April 22, 2002 with
respect to any person who is known to us to be the beneficial owner of more
than 5% of our common stock, which is the only class of our outstanding voting
securities, and as to our common stock beneficially owned by our directors and
officers and directors as a group:
<table>
<caption>
<s> <c> <c>
- --------------------- ---------------------- ----------
Name and address of Amount of Shares Percent of
Beneficial Owner (1) Beneficially Owned (2) Class (2)
- --------------------- ---------------------- ----------
Gary Cella
5 Ridge Road
Cos Cob, CT 06807 1,500,000 49.9%
Jonathan B. Reisman
6975 NW 62nd Terrace
Parkland, FL 33067 1,500,000 49.9%
Officers and directors
as a Group (2 persons) 3,000,000 99.8%
- --------------------- ---------------------- ----------
</table>
21
CERTAIN TRANSACTIONS
In April 2001, we issued 1,500,000 shares of common stock each to Gary Cella
and Jonathan B. Reisman for an aggregate of $200. The number of shares
reflects a stock split which occurred in August 2001.
DESCRIPTION OF COMMON STOCK
Our authorized capital stock consists of 150,000,000 shares of common stock,
par value $.00001 per share.
The holders of outstanding shares of our common stock are entitled to receive
dividends out of assets legally available therefor at such times and in such
amounts, if any, as our Board of Directors from time to time may determine.
Holders of common stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders which means that the holders of a
majority of the shares voted can elect all of the directors then standing for
election. Holders of the common stock are not entitled to preemptive rights
and the common stock is not subject to conversion or redemption.
Our directors and executive officers own all of our outstanding common stock.
These stockholders can determine the outcome of stockholder votes, including
votes concerning the election of directors, amendments to our charter and
bylaws and , subject to the provisions of Rule 419, the approval of
significant corporate transactions such as a merger or a sale of our assets.
In addition, their controlling influence could have the effect of delaying,
deferring or preventing a change in control of our company.
CONTROL-SHARE ACQUISITIONS
We may become subject to the control-share acquisition provisions of the
Florida Business Corporation Act. Those provisions could have the effect of
discouraging offers to acquire us and of increasing the difficulty of
consummating any such offer. The provisions may also discourage bids for our
common stock at a premium over the market price.
22
TRANSFER AGENT
We do not intend to appoint a transfer agent for our common stock prior to the
time, if any, as funds are released to us from the escrow account..
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, there has not been any public market for our common
stock. Sales of substantial amounts of our common stock in the public market,
or the perception that such sales could occur, could adversely affect
prevailing market prices, if any, of our common stock and could impair our
future ability to raise capital through the sale of equity securities.
In general, under Rule 144 any person who owns shares that were acquired from
us at least one year prior to the proposed sale is entitled to sell, within
any three-month period beginning 90 days after the date of this prospectus, a
number of shares that does not exceed the greater of:
- 1% of the number of shares of our common stock then outstanding or
- the average weekly trading volume of the common stock on Nasdaq
during the four calendar weeks preceding the filing of a notice on
Form 144 with respect to such sale.
Shares may generally be sold by non-affiliates without restriction that were
acquired from us at least two years prior to the proposed sale. Any shares
purchased by our affiliates in this offering and subsequently publicly sold by
those affiliates will not be subject to the one year holding period. Sales
under Rule 144 are also subject to certain manner of sale provisions and
notice requirements and to the availability of current public information
about us. It is the position of the Division of Corporation Finance of the
SEC, however, that promoters or affiliates of a blank check company and their
transferees would act as "underwriters" under the Securities Act of 1933 when
reselling the securities of the blank check company and that those securities
can be resold only through a registered offering. The Division of Corporation
Finance has further stated that Rule 144 would not be available for those
resale transactions despite technical compliance with the requirements of that
Rule. Accordingly, we have verbally agreed to register all the shares held by
Messrs. Cella and Reisman which are not presently being registered upon their
request after funds are released to us from the escrow account. We will bear
the cost of the registration.
23
SELLING STOCKHOLDERS
The following table sets forth information as of the date of this prospectus
with respect to the common stock held by each selling stockholder:
<table>
<caption>
<s> <c> <c> <c> <c>
- ------------------ --------- --------- --------- --------------------
Name & Address of Shares of Number of Shares of Percentage of
Selling Stockholder Common Shares Common Outstanding Shares
Stock Being Stock to of Common Stock to
Owned Offered be Owned be Owned After the
After the Offering (assuming
Offering the sale of all
shares being offered
us and the selling
stockholders and the
consummation of the
transaction with
ADM Tronics)
- ------------------ --------- --------- --------- --------------------
Gary Cella 1,500,000 100,000 1,400,000 44%
5 Ridge Road
Cos Cob, CT 06807
Jonathan B. Reisman 1,500,000 100,000 1,400,000 44%
6975 NW 62nd Terrace
Parkland, FL 33067
- ------------------ --------- --------- --------- --------------------
</table>
Mr. Cella is our President, Treasurer and a Director. Mr. Reisman is our
Secretary and a Director and is an affiliate of our legal counsel. Messrs.
Cella and Reisman are also our founders. Except for those relationships,
neither of them has had any position, office or other material relationship
with us or any of our affiliates within the past three years.
24
PLAN OF DISTRIBUTION
Shares may be sold from time to time directly by the selling stockholders at
an initial offering price of $2.00 per share. Alternatively, the selling
stockholders may, from time to time, offer the shares through underwriters,
dealers or agents, who may receive compensation in the form of underwriting
discounts, concessions or commissions from the selling stockholders for whom
they may act as agent. The selling stockholders and any underwriters, dealers
or agents that participate in the distribution of common stock may be deemed
to be underwriters, and any commissions or concessions received by any such
underwriters, dealers or agents may be deemed to be underwriting discounts and
commissions under the Securities Act of 1933. The selling stockholders may
sell the shares in one or more transactions on the over-the-counter market, in
negotiated transactions, or through a combination of those methods of
distribution. We will not receive any proceeds from shares sold by the
selling stockholders. The selling stockholders intend to begin their offering
shortly after funds are released to us from the escrow account. Prior to that
time, 200,000 of their shares will be held in the escrow account. The selling
stockholders intend to end their offering within six months after it begins.
LEGAL PROCEEDINGS
There are no pending or threatened legal proceedings to which we are a party
or of which any of our property is the subject or, to our knowledge, any
proceedings contemplated by governmental authorities.
INDEMNIFICATION
We have agreed to indemnify our executive officers and directors to the
fullest extent permitted by the Florida Business Corporation Act. The Act
permits us to indemnify any person who is, or is threatened to be made, a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by us or in our right) by reason of the fact that the person is or was an
officer or director or is or was serving at our request as an officer or
director. The indemnity may include expenses (including attorney's fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with the action, suit or proceeding,
provided that he acted in good faith and in a manner he reasonably believed to
be in or not opposed to our best interests, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. We may indemnify officers and directors in an action by us or in
our right under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to
be liable to us. Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, we must indemnify
him against the expenses which he actually and reasonably incurred. The
indemnification provisions of the Florida Business Corporation Act are not
exclusive of any other rights to which an officer or director may be entitled
under our bylaws, by agreement, vote, or otherwise.
Insofar as indemnification arising under the Securities Act may be permitted
to our directors, officers and controlling persons pursuant to the foregoing
provisions or otherwise, we have been advised that in the opinion of the SEC
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable.
25
LEGAL MATTERS
The validity of the shares of common stock offered by this prospectus have
been passed upon for us by Reisman & Associates, P.A. to the extent set forth
in that firm's opinion filed as an exhibit to the registration statement.
Jonathan B. Reisman is the President and sole stockholder of that firm. Mr.
Reisman, who owns approximately 50% of our outstanding shares, is also our co-
founder and is our Secretary and a Director.
EXPERTS
Our financial statements as of March 31, 2002 and for the period from April
18, 2001 to March 31, 2002 have been included in this prospectus in reliance
upon the report of William A. Meyler, P.C. independent certified public
accountant, appearing elsewhere in this prospectus, and upon his authority as
an expert in accounting and auditing.
ADDITIONAL INFORMATION
We have electronically filed a registration statement on Form SB-2 with the
SEC with respect to the shares of common stock to be sold in this offering.
This prospectus, which forms a part of that registration statement, does not
contain all of the information included in the registration statement. Certain
information is omitted and you should refer to the registration statement and
its exhibits. With respect to references made in this prospectus to any
contract or other document, the references are not necessarily complete and
you should refer to the exhibits attached to the registration statement for
copies of the actual contract or document. You may read and copy the
registration statement and other materials we file with the SEC at the SEC's
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The
public may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that
contains reports, proxy statements and information statements, and other
information regarding issuers that file electronically with the SEC. The
address of that site is http://www.sec.gov.
We are subject to the information and reporting requirements of the Securities
Exchange Act of 1934 and will file periodic reports and other information with
the SEC.
We do not intend to furnish our stockholders with annual reports containing
audited financial statements.
26
REPORT OF INDEPENDENT AUDITOR
Board of Directors
New England Acquisitions, Inc.
Cos Cob, CT
We have audited the accompanying balance sheet of New England Acquisitions,
Inc. (a Florida corporation in the development stage) as of March 31, 2002 and
the related statement of net loss and stockholder's equity-deficit and cash
flows for the period inception April 18, 2001 to March 31, 2002. These
financial statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above, present fairly in
all material respects the financial position of New England Acquisitions, Inc.
as of March 31, 2002 and the results of its operations and its cash flows for
the period inception April 18, 2001 to March 31, 2002 in conformity with
accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming the company
will continue as a going concern. As discussed in Note B of Notes to
Financial Statement, the Company has had no operating activities. Management's
plans, in regard to subsequent operating activities, are more fully described
in Note B.
/s/ William A. Meyler, P.C.
-----------------------
William A. Meyler, P.C.
27
Middletown, NJ
May 3, 2002
NEW ENGLAND ACQUISITIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
<table>
<caption>
<s> <c>
March 31, 2002
CURRENT ASSETS
Cash $ 100
-------
Total Current Assets 100
OTHER ASSETS
Restricted cash 15,000
-------
$ 15,100
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued expenses $ 7,500
Due to principal stockholders 20,034
-------
Total Current Liabilities 27,534
STOCKHOLDERS' EQUITY
Common stock authorized 150,000,000
shares; $0.00001 par value; issued
and outstanding 3,007,500 shares
at March 31, 2002 30
Additional contributed capital - deficit (3,364)
Deficit accumulated during Development Stage (9,100)
-------
Total Stockholders' Equity-Deficit (12,434)
-------
$ 15,100
=======
See accompanying notes to financial statements.
</table>
28
NEW ENGLAND ACQUISITIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF STOCKHOLDERS' EQUITY
For the Period April 18, 2001 (Inception) to March 31, 2002
<table>
<cption>
<s> <c> <c> <c> <c> <c>
Common Stock Contributed Accumulated
Number Amount Capital Deficit Total
--------- ------ ----------- ----------- --------
Issuance of shares to
officers and directors
at $0.001 per share 200,000 $200 - - $ 200
Effect of 15 to 1
stock split and
change of par
value to $0.00001
per share 2,800,000 (170) $ 170 - -
Sale of 7,500
shares at $2.00
per share 7,500 - 15,000 - 15,000
Cost of registration - - (18,534) - (18,534)
Net loss for period - - - $(9,100) (9,100)
--------- ------ ----------- ----------- --------
Balance
March 31,
2002 3,007,500 $ 30 $ (3,364) $(9,100) $(12,434)
========= ====== =========== =========== ========
See accompanying notes to financial statements.
</table>
29
NEW ENGLAND ACQUISITIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF NET LOSS
For the Period Inception (April 18, 2001) to March 31, 2002
<table>
<caption>
<s> <c>
GENERAL AND ADMINISTRATIVE EXPENSES
Professional fees $ 9,000
Bank charges 100
---------
9,100
---------
Net Loss For the Period $ 9,100
=========
Net Loss Per Share $ (0.003)
=========
Weighted average number of common
shares outstanding 3,003,934
=========
See accompanying notes to financial statements.
</table>
NEW ENGLAND ACQUISITIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
For the Period April 18, 2001 (Inception) to March 31, 2002
<table>
<caption>
<s> <c>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for period $ (9,100)
Adjustments to reconcile net loss to
Net cash provided by (used in)
operating activities
Accrued expenses 7,500
Due to principal stockholders 20,034
-------
Net Cash Provided by Operating Activities 18,434
CASH FLOWS FROM FINANCING ACTIVITIES
Sales of common stock 15,200
Cost of registering securities (18,534)
-------
Net Cash Provided by Financing Activities (3,334)
Net Increase in Cash 15,100
CASH AT BEGINNING OF PERIOD -
CASH AT END OF PERIOD $ 15,100
=======
SUPPLEMENTAL CASH FLOW INFORMATION:
None
</table>
See accompanying notes to financial statements.
30
NEW ENGLAND ACQUISITIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
March 31, 2002
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
New England Acquisitions, Inc. (the Company), a development stage
enterprise, was organized under the laws of the State of Florida on
April 18, 2001. The Company's sole purpose for organizing is to
engage in a merger or acquisition with an unidentifiable company or
other entities or persons.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that effect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from
those estimates.
CASH AND CASH EQUIVALENTS
The company considers all highly-liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
NOTE B - GOING CONCERN
The Company was incorporated on April 18, 2001 and to date has had no
operating activities and no significant capital contributions. In
December 2002, the Company sold 7,500 shares of its common stock at
$2.00 per share which were registered under the Securities Act of
1933. In March 2002, the Company entered into an Assets and Rights
Purchase Agreement (the Agreement) which, if consummated, would allow
the Company to market and sell three different proprietary medical
products. The Agreement is contingent upon, among other things, the
filing and effectiveness of a post-effective amendment to its
registration statement with the Securities and Exchange Commission and
the confirmation of their investment by the holders of not less than
7,000 of the shares that were sold at $2.00 per share. The Company
plans to obtain $150,000 to fund its initial marketing and sales
activities through the private sale of its common stock. It is
anticipated that such proceeds will enable the Company to commence
operations. There is no assurance, however, that the Company will be
successful in its efforts to complete a private placement or that the
proceeds of a successful private placement will be sufficient to fund
the operations of the Company.
31
NOTE C - RELATED PARTY TRANSACTIONS
The principal stockholders of the Company have borne on behalf of the
Company all of the costs related to the filing of a registration
statement on Form SB-2 with the Securities and Exchange Commission and
subsequent quarterly compliance filings. The total amount was $20,034
at March 31, 2002. The principal stockholders have agreed to defer
the payment to them by the Company of that amount until the Company
becomes a going concern.
NOTE D - INCOME TAXES
The Company has adopted Financial Accounting Standard Statement No.
109 (FASB No. 109). Under this method, the Company recognizes a
deferred tax liability or asset for temporary differences between the
tax basis of an asset or liability and the related amount reported on
the financial statements. The principal types of differences, which
are measured at the current tax rates, are net operating loss carry
forwards. At March 31, 2002, the differences resulted in a deferred
tax asset of approximately $1,365. FASB No. 109 requires the
establishment of a valuation allowance to reflect the likelihood of
realization of deferred tax assets. Accordingly, the company has
recorded a valuation allowance for the entire deferred tax asset, and
the accompanying financial statements do not reflect any net asset for
deferred taxes at March 31, 2002.
The Company's net operating loss carry forward amounted to
approximately $9,100 at March 31, 2002.
NOTE E - COMMON STOCK
In December 2001, the Company sold 7,500 shares of its common stock at
$2.00 per share under its registration statement on Form SB-2 filed
with the Securities and Exchange Commission. The proceeds and any
interest or dividends are being held in an escrow account for the sole
benefit of the purchasers of the shares. The Company is preparing and
intends to shortly file a post-effective amendment to its registration
statement which will describe, among other things, the Agreement
referred to in Note F of Notes to financial Statements. Within five
business days after the effective date of the amendment, the Company
will send to each purchaser of securities held in escrow, a copy of
the prospectus. Each purchaser will have no fewer than 20 business
days from the effective date of the amendment to notify the Company in
writing that the purchaser elects to remain an investor. The
acquisition will be consummated if the holders of at least 7,000
shares confirm their investments. If the acquisition is consummated,
funds held in escrow for the benefit of the confirming investors will
be released to the Company and any remaining funds will be returned to
the other purchasers.
32
NOTE F - COMMITMENTS AND CONTINGENCIES
On March 21, 2002, the Company entered into an Asset and Rights
Purchase Agreement with ADM Tronics Unlimited, Inc. to acquire the
rights to market and sell three different proprietary medical
products. (See Note E of Notes to Financial Statements). If the
Agreement is consummated, the Company will issue to ADM Tronics
150,375 shares of the Company's common stock and pay ADM Tronics a
royalty of 6% of gross sales of the products, less discounts, returns
and allowances. The Company will also pay consulting fees and related
expenses for any time expended by ADM Tronics' employees for any
services related to the products other than manufacturing activities,
to be mutually agreed upon in advance of any of the services. In
order to maintain exclusivity with respect to the medical products,
the Company will be required to pay certain minimum royalties to ADM
Tronics. The Company must also pay $25,000 to ADM Tronics in advance
of the initiation of production of one of the products for ADM
Tronics' expenses and establishment of regulatory support and
processes for distribution. If the Company does not make the payment
within one year from the consummation of the transaction with ADM
Tronics, the Company will lose the exclusive rights to the product.
33
No person has been authorized to give any information or to make any
representations in connection with this offering other than those
contained in this prospectus and, if given or made, such other
information and representations must not be relied upon as having been
authorized by New England Acquisitions, Inc. Neither the delivery of
this prospectus nor any sale made will, under any circumstances,
create any implication that there has been no change in the affairs of
New England Acquisitions, Inc. since the date of this prospectus or
that the information contained in this prospectus is correct as of any
time subsequent to its date. This prospectus does not constitute an
offer to sell or a solicitation of an offer to buy any securities
other than the registered securities to which it relates. This
prospectus does not constitute an offer to sell or a solicitation of
an offer to buy such securities in any circumstances in which such
offer or solicitation is unlawful.
- -----------------------
TABLE OF CONTENTS
page
PROSPECTUS SUMMARY 3
RISK FACTORS 4
FORWARD-LOOKING STATEMENTS 6
USE OF PROCEEDS 6
DIVIDEND POLICY 7
MANAGEMENT'S PLAN OF OPERATION 7
PROPOSED BUSINESS 7
MANAGEMENT 13
PROVISIONS OF RULE 419 UNDER THE SECURITIES ACT OF 1933 14
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT 16
CERTAIN TRANSACTIONS 16
DESCRIPTION OF COMMON STOCK 17
SHARES ELIGIBLE FOR FUTURE SALE 17
SELLING STOCKHOLDERS 18
PLANS OF DISTRIBUTION 19
LEGAL PROCEEDINGS 19
INDEMNIFICATION 19
LEGAL MATTERS 20
EXPERTS 20
ADDITIONAL INFORMATION 20
REPORT OF INDEPENDENT AUDITOR 21
34
NEW ENGLAND ACQUISITIONS, INC.
COMMON STOCK
------------------------
PROSPECTUS
------------------------
___________, 2002
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses incurred by the Registrant in connection with its initial public
offering and the offer and sale by the selling stockholders are as follows.
All amounts other than the SEC registration fee are estimates.
SEC registration fee $ 108
Printing and engraving $ 500
Legal fees and expenses $ 10,000
Accounting and auditing fees and expenses $ 2,000
Blue sky fees and expenses $ 500
Transfer agent fees $ 1,500
Escrow fee $ 350
Miscellaneous $ 3,542
Total............................................. $ 18,500
ITEM 25. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant had agreed to indemnify its executive officers and directors
the fullest extent permitted by the Florida Business Corporation Act. That
Act permits the Registrant to indemnify any person who is, or is threatened to
be made, a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by the Registrant or in its right) by reason of the fact that
the person is or was an officer or director or is or was serving our request
as an officer or director. The indemnity may include expenses (including
attorney's fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by the person in connection with the action, suit or
proceeding, provided that he acted in good faith and in a manner he reasonably
believed to be in or not opposed to our best interests, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The Registrant may indemnify officers and directors in
an action by the Registrant or in its right under the same conditions, except
that no indemnification is permitted without judicial approval if the officer
or director is adjudged to be liable to the Registrant. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the Registrant must indemnify him against the expenses
which he actually and reasonably incurred. The foregoing indemnification
provisions are not exclusive of any other rights to which an officer or
director may be entitled under a our bylaws, by agreement, vote, or otherwise.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
(1) In April 2001, the Registrant issued 1,500,000 shares of
common stock, as adjusted for a subsequent stock split, each
to Gary Cella and Jonathan B. Reisman for an aggregate of
$200.
(2) There were no principal underwriters.
(3) The aggregate consideration for the securities referred to in
subparagraph was $200.
(4) The Registrant claimed exemption from the registration
provisions of the Securities Act of 1933 with respect to the
securities pursuant to Section 4(2) thereof inasmuch as no
public offering was involved.
ITEM 27. EXHIBITS.
3.01(a) Articles of Incorporation.*
3.01(b) Form of Articles of Amendment to Articles of Incorporation.**
3.03 Bylaws.*
4.01 Form of Specimen Stock Certificate for the Registrant's Common
Stock.**
5.01 Opinion of Reisman & Associates, P.A. regarding legality of
securities being registered.***
10.01 Escrow Agreement of August 3, 2001 between the Registrant and
Patriot National Bank.**
10.02 Asset and Rights Purchase Agreement of March 21, 2002, by and
between ADM Tronics Unlimited, Inc. and the Registrant.****
23.01 Consent of Reisman & Associates, P.A. (included in Exhibit 5.01).***
23.02 Consent of William A. Meyler.****
__________________________________
* Filed as part of registration statement on Form SB-2.
** Filed as part of Amendment No. 1 to registration statement on Form SB-2.
*** Filed as part of Amendment No. 2 to registration statement on Form SB-2.
**** Filed herewith.
ITEM 28. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement to:
(i) include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the Registration Statement; and
(iii) include any additional or changed material information on the
plan of distribution.
(2) For determining liability under the Securities Act, each such post-
effective amendment shall be treated as a new registration statement of
the securities offered, and the offering of the securities at that time to
be the initial bona fide offering
(3) To file a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
================================================================================
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form SB-2 and has authorized this
registration statement to be signed on its behalf by the undersigned, in the
City of Cos Cob, State of Connecticut, on the seventh day of May, 2002.
New England Acquisitions, Inc.
By: /s/ Gary Cella
----------
Gary Cella, President
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signatures Title Date
- --------------------------- ------------------------ ------------
By: /s/ Gary Cella Chief Executive Officer, May 9, 2002
---------- Principal Financial Officer,
Gary Cella Director
By: /s/ Jonathan B. Reisman Director May 9, 2002
-------------------
Jonathan B. Reisman
================================================================================
35
3.01(a) Articles of Incorporation.*
3.01(b) Form of Articles of Amendment to Articles of Incorporation.**
3.03 Bylaws.*
4.01 Form of Specimen Stock Certificate for the Registrant's Common
Stock. **
5.01 Opinion of Reisman & Associates, P.A. regarding legality of
securities being registered. ***
10.01 Escrow Agreement of August 3, 2001 between the Registrant and
Patriot National Bank.**
10.02 Asset and Rights Purchase Agreement of March 21, 2002, by and
between ADM Tronics Unlimited, Inc. and the Registrant.****
23.01 Consent of Reisman & Associates, P.A. (included in Exhibit
5.01).***
23.02 Consent of William A. Meyler.****
__________________________________
* Filed as part of registration statement on Form SB-2.
** Filed as part of Amendment No. 1 to registration statement on Form SB-2.
*** Filed as part of Amendment No. 2 to registration statement on Form SB-2.
**** Filed herewith.
================================================================================