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