UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D. C. 20549
FORM 10-QSB/A
QUARTERLY REPORT UNDER SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2004
Commission file number 333-63432
Atlantic Wine Agencies Inc.
(Exact name of small business issuer as specified in its charter)
Florida 65-110237
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Golden Cross House
8 Duncannon Street
London
WC2N 4JF
(Address of principal executive offices)
011-44-797-905-7708
(Issuer's telephone number)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes ___X__
No_______
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
The number of shares of the issuer's outstanding common stock, which is the only
class of its common equity, on August 18, 2004 was 104,063,027.
ITEM 1 FINANCIAL STATEMENTS
Description Page
No.
FINANCIAL INFORMATION:
Financial Statements
Consolidated Balance Sheets at June 30, 2004
(Unaudited)............................................................. 3
Consolidated Statement of Operations for the Three Months Ended
June 30, 2004 4 and for the Period from March 1, 2004 to June
30, 2004 (Unaudited).................................................... 4
Consolidated Statements of Cash Flows for the Three Months Ended
June 30, 2004 and for the Period from March 1, 2004 to June
30, 2004 (Unaudited).................................................... 5
Notes to Consolidated Financial Statements (Unaudited)..................... 6
2
ITEM 1. FINANCIAL STATEMENTS
ATLANTIC WINE AGENCIES, INC. and SUBSIDIARIES
(Formerly New England Acquisitions, Inc.)
CONSOLIDATED BALANCE SHEET
JUNE 30, 2004
CURRENT ASSETS
Cash $ 309,944
Accounts receivable 21,534
Inventory 300,359
-----------
Total Current Assets 631,837
OTHER ASSETS
Property, plant and equipment, net 2,399,271
-----------
$ 3,031,108
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 76,431
Accrued expenses 30,000
-----------
Total Current Liabilities 106,431
LONG-TERM DEBT
Due to principal stockholders 298,618
STOCKHOLDERS' EQUITY
Common stock authorized 150,000,000
shares; $0.00001 par value; issued
and outstanding 104,063,027 shares 1,041
Additional contributed capital 3,861,839
Other comprehensive income 128,544
Deficit accumulated during Development Stage (1,365,365)
-----------
Total Stockholders' Equity 2,626,059
-----------
$ 3,031,108
===========
See accompanying notes to financial statements.
3
ATLANTIC WINE AGENCIES, INC. and SUBSIDIARIES
(Formerly New England Acquisitions, Inc.)
CONSOLIDATED STATEMENTS OF OPERATIONS
Period
For the Three March 1, 2004
Months Ended (Inception) to
June 30, June 30,
2004 2004
------------ ------------
NET SALES $ 56,143 $ 56,143
COSTS AND EXPENSES
Cost of goods sold 128,107 128,107
Stock Based Compensation 999,000 1,139,000
Selling, general and administrative 148,849 148,849
Depreciation and amortization 5,543 5,543
------------ ------------
Total Costs and Expenses 1,281,499 1,421,499
------------ ------------
NET OPERATING LOSS (1,225,356) (1,365,356)
OTHER EXPENSE
Interest expense (9) (9)
------------ ------------
NET LOSS $(1,225,365) $ (1,365,365)
============ ============
NET LOSS PER SHARE, basic and diluted $ (0.02) $ (0.02)
============ ============
Weighted average number of
common shares outstanding 67,799,291 67,799,291
============ ============
Note: The Company had no operating abilities for the comparable period ending
June 30, 2003.
See accompanying notes to financial statements.
4
ATLANTIC WINE AGENCIES, INC. and SUBSIDIARIES
(Formerly New England Acquisitions, Inc.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Period
For the Three March 1, 2004
Months Ended (Inception) to
June 30, June 30,
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES 2004 2004
Net loss for period $(1,225,365) $(1,365,365)
Non-cash item included in net loss:
Stock based compensation 999,000 1,139,000
Depreciation and amortization 5,574 5,574
Changes in operating assets and liabilities:
Accounts receivable (4,610) (4,610)
Inventory (57,931) (57,931)
Accounts payable 58,872 58,872
Accrued expenses (13,500) (13,500)
Increase in due to principal stockholders 298,618 298,618
----------- -----------
Net Cash (Used In) Provided by Operating
Activities 60,658 60,658
CASH FLOWS FROM FINANCING ACTIVITIES
Cash acquired in acquisition 120,742 120,742
----------- -----------
Net Cash Provided by Financing Activities 120,742 120,742
----------- -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 128,544 128,544
----------- -----------
NET (DECREASE) INCREASE IN CASH 309,944 309,944
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD
----------- -----------
CASH AT END OF PERIOD $ 309,944 $ 309,944
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION
Cash paid for interest $ 9 $ 9
See accompanying notes to financial statements.
5
Atlantic Wine Agencies, Inc.
(A Development Stage Company)
and Subsidiaries
Consolidated Statement of Stockholders' Equity
June 30, 2004
Common Stock Accumulated
------------------------- Paid in Accumulated Comprehensive
Shares Amount Capital Deficit Income Total
---------- ---------- ---------- ---------- ---------- ----------
New Heights 560 Holdings, LLC
capital contribution December
15, 2003 - Note A 50,000 $ 50,000 $ 50,000
Additional capital contribution
March 2004 $2,673,880 2,673,880
---------- ---------- ---------- ---------- ---------- ----------
Total New Heights 560 Holdings,
LLC prior to reverse merger 50,000 50,000 2,673,880 2,723,880
Merger with Atlantic Wine Agencies,
Inc.:
Cancellation of New Heights 560
Holdings, LLC outstanding shares (50,000) (50,000) 50,000
Equity of Atlantic Wine Agencies,
Inc. at March 31, 2004 63,027 1 69,355 (69,356)
Capitalization of Atlantic Wine
Agencies, Inc. accumulated deficit (69,356) 69,356
Issuance of 100,000,000 shares to
acquire New Heights 560 Holdings,
LLC 100,000,000 1,000 (1,000)
Issuance of common stock to consul-
tants @ $0.035 per share 4,000,000 40 139,960 (140,000)
Transfer of 39,960,000 shares from
controlling stockholder to employees 999,000 999,000
Net loss for the three months
ended April 30, 2004 (1,225,365) $ 128,544 (1,096,821)
---------- ---------- ---------- ---------- ---------- ----------
104,063,027 $ 1,041 $3,861,839 $(1,365,365) $ 128,544 $2,626,059
========== ========== ========== ========== ========== ==========
See accompanying notes to financial statements.
6
ATLANTIC WINE AGENCIES,
INC. and SUBSIDIARIES
(Formerly New England Acquisitions, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2004
NOTE A - BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary in order to make the financial statements not
misleading have been included. Results for the three months ended June
30, 2004 are not necessarily indicative of the results that may be
expected for the year ending March 31, 2005. For further information,
refer to the financial statements and footnotes thereto included in the
Atlantic Wine Agencies, Inc., formerly New England Acquisitions, Inc.,
annual report on Form 10-KSB for the year ended March 31, 2004.
NOTE B - REVERSE MERGER
On May 4, 2004, the stockholders of New Heights 560 Holdings, LLC a
Cayman Island Limited Liability Company, acquired 100,000,000 shares of
Atlantic Wine Agencies, Inc. common stock in an exchange of shares,
thereby obtaining control of the company. Subsequent to the acquisition,
New Heights 560 Holdings, LLC controlled 99% of the outstanding common
stock of the company. In this connection, New Heights 560 Holdings, LLC
became a wholly owned subsidiary of Atlantic Wine Agencies, Inc. Prior
to the acquisition, Atlantic Wine Agencies, Inc. was a non-operating
public shell corporation. Pursuant to Securities and Exchange Commission
rules, the merger or acquisition of a private operating company into a
non-operating public shell corporation with nominal net assets is
considered a capital transaction. Accordingly, for accounting purposes,
the acquisition has been treated as an acquisition of New Heights 560
Holdings, LLC by the Company and a recapitalization of Atlantic Wine
Agencies, Inc. Since the merger is a recapitalization of Atlantic Wine
Agencies, Inc. and not a business combination, pro-forma information is
not presented.
NOTE C - GOING CONCERN
As indicated in the accompanying financial statements, the Company has
incurred cumulative net operating losses of $1,365,365 since inception
and is considered a company in the development stage. Management's plans
include the raising of capital through the equity markets to fund future
operations and the generating of revenue through its business. Failure
to raise adequate capital and generate adequate sales revenues could
result in the Company having to curtail or cease operations.
Additionally, even if the Company does raise sufficient capital to
support its operating expenses and generate adequate revenues, there can
be no assurances that the revenue will be sufficient to enable it to
develop business to a level where it will generate profits and cash
flows from operations. These matters raise substantial doubt about the
Company's ability to continue as a going concern. However, the
accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. These financial statements
do not include any adjustments relating to the recovery of the recorded
assets or the classification of the liabilities that might be necessary
should the Company be unable to continue as a going concern.
7
ATLANTIC WINE AGENCIES,
INC. and SUBSIDIARIES
(Formerly New England Acquisitions, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2004
NOTE D - STOCK BASED COMPENSATION
In May 2004, the controlling stockholder transferred 39,960,000 shares
of his common stock to the newly hired key employees. The shares were
valued at $0.025 per share.
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
The following should be read in conjunction with our financial statements and
the related notes that appear elsewhere in this Annual Report. The discussion
contains forward-looking statements that reflect our plans, estimates and
beliefs. Our actual results could differ materially from those discussed in the
forward-looking statements. Factors that could cause or contribute to these
differences include, but are not limited to, those discussed below.
We have not had any significant revenues since inception. Our sole objective is
to become an operating business.
Our ability to become and continue as a going concern is dependent upon
obtaining additional substantial capital. Because we have virtually no funds and
no commitments which would enable us to obtain funds, we may exhaust our limited
financial resources before we are ever able to commence operations.
On December 16, 2003, the Company had a change in control of its issued and
outstanding common stock. On this date, Rosehill Investments Limited acquired
11,937,200 shares of the Company's common stock pursuant to a Stock Purchase
Agreement among Rosehill Investments Limited and the Company, Mr. Jonathan
Reisman and Mr. Gary Cella. The agreement provided for the shares to be sold as
follows: 9,234,520 shares from the Company; 1,379,600 shares from Mr. Reisman
and 1,323,100 shares from Mr. Cella ("Stock Sale").
As a result of the Stock Sale: (i) the directors of the Company resigned and new
directors were appointed; (ii) obligations to the Company's auditors, lawyers
and service providers were satisfied; and (iii) the Company spun off its two
subsidiaries to its shareholders of record immediately prior to the Stock Sale.
RESULTS OF OPERATIONS
Operating costs for the period from inception to June 30, 2004 aggregated
$1,281,499. This includes costs incurred as stock-based compensation of $999,000
and operating expenses of $282,508. As a result of the above we realized a
cumulative loss of $1,225,356 or $0.02 per share.
LIQUIDITY AND CAPITAL RESOURCES
For the three month period ended June 30, 2004, net cash used to fund operating
activities totaled $60,658 and net cash provided by financing activities totaled
$120,742.
The Company has not generated revenues and has financed its operations to date
through capital contributions of its shareholders and has received $298,618 from
such contributions. Cash on hand was $309,944 as of June 30, 2004.
The Company's auditor has raised its doubts as to the Company's ability to
continue as a going concern. The Company's management plans to continue to
develop its brand and products in the market place with the intent that the
business will be self sustaining from a cash flow standpoint within the next
twelve to eighteen months. Although there is no written agreement between the
Company and those entities which have contributed capital to the Company and no
assurances can be made regarding such relationships, the Company's management
believes that it will continue to have access to the necessary funds to maintain
its operations for the next twelve months or more.
9
DEVELOPMENT AND INTEGRATION OF BUSINESS MODEL
It is the Company's current intention to enter the South African wine-growing
and wine distribution business. Presently, the Company is investigating
potential acquisitions of assets and is in discussions with possible joint
venture candidates in South Africa and elsewhere.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The Company's discussion and analysis of its financial condition and results of
operations are based upon the its financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United
States. The preparation of these financial statements requires the Company to
make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. On an on-going basis, the Company evaluates its estimates,
including those related to bad debts, income taxes and contingencies and
litigation, when applicable. The Company bases its estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making
judgments about carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates
under different assumptions or conditions.
Item 3. Controls and Procedures.
(a) Our principal executive officer and principal financial officer has
evaluated the effectiveness of our disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) as of a date within 90 days
prior to the filing date of this quarterly report and has concluded that our
disclosure controls and procedures are adequate.
(b) There were no significant changes in our internal controls or in other
factors that could significantly affect these controls subsequent to the
date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
(c) Not applicable
10
PART II
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
a. Exhibit Index
Exhibit 31.1 Certification of President and Principal Financial Officer
Exhibit 32.1 Certification of President and Principal Financial Officer
11
b. Reports on Form 8-K
On May 17, 2004, the Company filed an 8-K with the Securities and Exchange
Commission with respect to a change of control (file no. 333-63432) which
occurred on May 4, 2004. On such date the Company acquired all of the issued and
outstanding shares of New Heights 560 Holdings LLC, a Cayman Islands limited
liability corporation ("New Heights"), in exchange for One Hundred Million
shares of its restricted common stock which is equal to 99.9% of the total
outstanding shares of the Company's common stock (this transaction shall be
referred to as the "Merger"). As a result of the Merger, the Company now has two
wholly owned subsidiaries, Mount Rozier Estates (Pty) Limited and Mount Rozier
Properties (Pty) Limited. Such companies own a world class vineyard in the
Stellenbosch region of Western Cape, South Africa. The vineyard and surrounding
properties consist of 105 hectares of arable land for viticultural as well as
residential and commercial purposes. In the opinion of the management the site
is a world class site in terms of location, soil composition and future
development potential.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ATLANTIC WINE AGENCIES INC.
/s/ Adam Mauerberger
- ----------------------
Name: Adam Mauerberger
Title: President, Chief Financial Officer and Chairman of the Board
Date: August 9, 2005