UNITED STATES
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended February 28th February 2003
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, 2003, 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
WESTMINSTER AUTO RETAILERS, INC.
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEET
As Of As Of
February 28, 2003 May 31, 2002
(Unaudited) (Audited)
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ASSETS
Current Assets $ 0 $ 0
Other Assets 0 0
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TOTAL ASSETS $ 0 $ 0
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accrued Expenses 73,143 32,954
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Total Current Liabilities 73,143 32,954
Other Liabilities
Loan Payable - European Technology
Investments Ltd - Note 6 82,550 71,950
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Total Liabilities $ 155,693 $ 104,904
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 355,745 337,645
Deficit Accumulated During the
Development Stage (516,438) (447,549)
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Total Stockholders' Equity (155,693) (104,904)
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
February 28
2003 2002
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TOTAL REVENUES: $ 0 0
OPERATING EXPENSES:
Accounting 1,750 1,750
Legal 2,500 5,104
Rent Expense (Note 2) 1,200 1,200
Filing Fee 13 13
Contributed Svcs
(Note 3) 17,500 17,500
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NET LOSS (22,963) (25,567)
NET LOSS PER SHARE (.00) (.00)
Weighted Average
Number of Shares
Outstanding 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, 2003 February 28,2002
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CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss $(22,963) $(25,567)
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 (5,737) (14,883)
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Total Adjustments $ 12,363 $ 3,217
Net Cash Used in
Operating Activities (10,600) (22,350)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Increase in Loan Payable -
European Tech Investments Ltd (10,600) 22,350
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Net Cash Provided
by Financing Activities 10,600 22,350
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, 2003
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, 2003
Net Loss Per Share $ (0.00)
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, 2003 no revenue and a net loss from operations of $(516,438). As of
February 28, 2003, the Company had net capital deficiency of $(155,693).
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.
The loan payable to European Technology Investments Limited increased during the
quarter to $103,750. European Technology Investments Limited have agreed to make
a facility available to the company up to $150,000, repayable on a significant
transaction or when the company is deriving enough profit to pay back the loan.
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
Exhibits 99.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbannes- Oxley Act of 2002 99.2 Certification
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbannes- Oxley
Act of 2002
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.
(Registrant)
Date: July 22, 2003
By: /s/ B.R. Parker
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President
CERTIFICATIONS
Certificate of Chief Executive Officer.
I, Basil R Parker, certify that:
1.I have reviewed this quarterly report on Form 10-QSB of Westminster Auto
Retailers, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3 Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4.The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14 for the registrant and have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b. evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c. Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b. any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: July 22, 2003 /s/ Basil R Parker
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Basil R Parker
President and Chief Executive Officer
(Principal Executive Officer)
Certificate of Chief Accounting Officer.
I, Linden J Boyne, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Westminster Auto
Retailers, Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14 for the registrant and have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared
b. evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c. Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5.The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b. any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated
in this quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: July 22, 2003
/s/ Linden J Boyne
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Linden J Boyne
(Principal Accounting Officer)