UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D. C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2006
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, United Kingdom WC2N 4JF
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: 011-44-207-484-5005
(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, 2006 was 86,323,880.
ITEM 1 FINANCIAL STATEMENTS
Description Page No.
FINANCIAL INFORMATION:
Financial Statements
Consolidated Balance Sheets at June 30, 2006
(Unaudited).............................................................................................. 3
Consolidated Statement of Operations for the Three Months Ended June 30, 2006 and 2005,
respectively (Unaudited)................................................................................. 4
Consolidated Statements of Cash Flows for the Three Months Ended June 30, 2006 and 2005, respectively
(Unaudited) ................................................................................................ 5
Notes to Consolidated Financial Statements (Unaudited)...................................................... 6
ITEM 1. FINANCIAL STATEMENTS
ATLANTIC WINE AGENCIES, INC. and SUBSIDIARIES
(Formerly New England Acquisitions, Inc.)
CONSOLIDATED BALANCE SHEETS
June 30, March 31,
2006 2006
----------- -----------
(Unaudited) (Audited)
CURRENT ASSETS
Cash $ 31,378 $ 78,145
Accounts receivable 301,048 507,065
Inventory 634,218 324,492
Prepaid expenses and other 8,536 9,142
----------- -----------
Total Current Assets 975,180 918,844
OTHER ASSETS
Property, plant and equipment, net 2,728,022 2,945,682
Trademark 1,209 1,426
----------- -----------
$ 3,704,411 $ 3,865,952
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Due to factoring agent $ 1,712 $ 99,595
Loans from principal shareholders 1,356,506 1,259,863
Accounts payable 311,439 299,004
Accrued expenses 86,552 220,967
Accrued payroll taxes 719 25,926
----------- -----------
Total Current Liabilities 1,756,928 1,905,355
STOCKHOLDERS' EQUITY
Common stock authorized 150,000,000
shares; $0.00001 par value; issued
and outstanding 86,323,880 shares 868 868
Additional contributed capital 7,829,536 7,829,536
Accumulated deficit (6,200,951) (6,184,014)
Accumulated other comprehensive income 318,030 314,207
----------- -----------
Total Stockholders' Equity 1,947,483 1,960,597
----------- -----------
$ 3,704,411 $ 3,865,952
=========== ===========
See accompanying notes to financial statements.
ATLANTIC WINE AGENCIES, INC. and SUBSIDIARIES
(Formerly New England Acquisitions, Inc.)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended
June 30,
------------------------------
2006 2005
------------ ------------
(Unaudited) (Unaudited)
NET SALES $ 55,959 $ 94,302
COSTS AND EXPENSES
Cost of goods sold 13,820 111,025
Selling, general and administrative 42,185 418,995
Depreciation and amortization 26,086 18,789
------------ ------------
Total Costs and Expenses 82,091 548,809
------------ ------------
OTHER INCOME
Insurance claims 9,195
------------ ------------
NET LOSS (16,937) (454,507)
NET LOSS PER SHARE, basic and diluted $ (0.01) $ (0.01)
============ ============
Weighted average number of common shares outstanding 86,323,880 84,838,027
============ ============
See accompanying notes to financial statements.
ATLANTIC WINE AGENCIES, INC. and SUBSIDIARIES
(Formerly New England Acquisitions, Inc.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended
June 30,
------------------------
2006 2005
--------- ---------
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for period $ (16,937) $(454,507)
Non-cash item included in net loss:
Depreciation and amortization 26,086 18,789
Changes in operating assets and liabilities:
Accounts receivable 206,017 (154,437)
Inventory (309,726) 122,700)
Prepaid expense and other 606 30,626
Accounts payable 12,435 111,222
Accrued expenses (134,415) 22,985
Accrued payroll taxes (25,207) (65,181)
--------- ---------
Net Cash Used In Operating Activities (241,141) (367,803)
CASH FLOWS FROM FINANCING ACTIVITIES
Loan from principal shareholders 96,643 297,054
Due to factoring agent (97,883)
--------- ---------
Net Cash Used In Financing Activities (1,240) 297,054
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditure (11,250)
Disposal of fixed assets 191,791
--------- ---------
Net Cash Provided by (Used in) Investing Activities 191,791 (11,250)
EFFECT OF EXCHANGE RATE CHANGES ON CASH 3,823 32,491
--------- ---------
NET DECREASE IN CASH (46,767) (49,508)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 78,145 97,487
--------- ---------
CASH AT END OF PERIOD $ 31,378 $ 47,939
========= =========
See accompanying notes to financial statements.
ATLANTIC WINE AGENCIES,
INC. and SUBSIDIARIES
(Formerly New England Acquisitions, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2006
(Unaudited)
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,
2006 are not necessarily indicative of the results that may be expected
for the year ending March 31, 2007. 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, 2006.
NOTE B - GOING CONCERN
As indicated in the accompanying financial statements, the Company has an
Accumulated deficit of $6,200,951. 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.
NOTE C - DUE PRINCIPAL STOCKHOLDERS
During the quarter ended June 30, 2006, the principal stockholders
continued to advance funds for working capital. The amount advanced during
the quarter approximated $96,000.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation
Financial results reflect securing HBJ as distributor within the UK with premium
brands being focused on through the business which has resulted increasing
margin back to the business. Atlantic Wine Agencies will continue to focus on
securing agency agreements in Europe and South Africa providing direct route to
market from Mount Rozier Estate implementing cost saving initiatives highlighted
in annual report. Mount Rozier Estate has further secured exceptional results
from two of the most respected International wine competitions continuing on
last year's success and recent 2006 IWC results. Mount Rozier excelled in the
Decanter World Wine Awards one of the world's most influential and respected
wine competition. Now in its third year, the Decanter World Wine Awards is a
global competition whose aim is to provide credible recommendations for today's
wine consumer. The Awards reflect regional styles, celebrate diversity, promote
value for money, and highlight quality.
Mount Rozier Cabernet Sauvignon Cuvee Burr 2004 GOLD
Mount Rozier Merlot Cuvee Julian 2004 SILVER
Mount Rozier Shiraz Cuvee Mauerberger 2004 SILVER
Atlantic Wine Agencies are pleased to report on success also in The
International Wine and Spirit Competition founded in 1969 and is the premier
competition of its kind in the world. In 2005 The Competition received
approximately 5,000 entries from over 50 countries.
Mount Rozier Cabernet Sauvignon Cuvee Burr 2004 SILVER
Mount Rozier Shiraz Cuvee Mauerberger 2004 SILVER BEST IN CLASS
Atlantic Wine Agencies profile continues to be raised by Mount Rozier and
management intends to build on recent successes.
RESULTS OF OPERATIONS
Our revenues from the previous 3-month period ending June 30, 2005 decreased
from $94,302 to $55,959.
In furtherance of our goal of building world class wine brands from South
Africa, we intend to revisit some of our earlier business development strategies
of strengthening our business outside core wine model into potentially the
leisure & resource industry delivering value to all shareholders. We will
endeavour to keep the public promptly updated as our options clarify themselves.
We have financed our operations to date through loans made to us by our
shareholders and their affiliates.
Operating costs for the three-months ended June 30, 2005 aggregated $548,809 or
$0.01 per share as compared to $82,091 or $0.01per share for the year ended June
30, 2006.
LIQUIDITY AND CAPITAL RESOURCES
For the three-months ended June 30, 2006 net cash used to fund operating
activities aggregated $241,141 net cash provided by investing activities
aggregated $191,791 and net cash provided by financing activities aggregated
$1,240.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The Company's discussion and analysis of its financial condition and results of
operations are based upon 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. 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.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Instruments
with Characteristics of Both Liabilities and Equity." This standard requires
that certain financial instruments embodying an obligation to transfer assets or
to issue equity securities be classified as liabilities. It is effective for
financial instruments entered into or modified after May 31, 2003, and otherwise
is generally effective July 1, 2003. This standard had no impact on the
Company's financial statements.
In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure - an Amendment to FASB Statement No.
123." SFAS No. 148 amends SFAS No. 123, "Accounting for Stock-Based
Compensation," to provide alternative methods for transition to SFAS No. 123's
fair value method of accounting for stock-based compensation. As amended by SFAS
No. 148, SFAS No. 123 also requires additional disclosure regarding stock-based
compensation in annual and condensed interim financial statements. The new
disclosure requirements became effective immediately.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The Company's discussion and analysis of its financial condition and results of
operations are based upon 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. 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
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 99.1 Certification of President and Principal Financial Officer
Exhibit 99.2 Certification of President and Principal Financial Officer
b. Reports on Form 8-K None.
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.
- ------------------------
Name: Adam Mauerberger
Title: President, Chief Financial Officer and Chairman of the Board
Date: August 21, 2006