UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
/x/ Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Quarterly Period Ended June 30, 2003
/ / Transition Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Transition Period from __________ to ____________
Commission File Number 333-63432
New England Acquisitions, Inc.
(Exact name of small business issuer as specified in charter)
Florida
(State of either jurisdiction of incorporation or organization)
65-1102237
(IRS Employer Identification No.)
5 Ridge Road, Cos Cob, CT 06807
(Address of principal executive offices)
203-622-1848
(Issuer's telephone number)
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(Former name, address and former fiscal year, if changed since last report)
The number of shares of the issuer's outstanding common stock,
which is the only class of its common equity,
on August 13, 2003 was 3,562,875.
Transitional Small Business Disclosure format (check one):
Yes_____ No_X___
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PART I FINANCIAL INFORMATION
Item 1.- Financial Statements
NEW ENGLAND ACQUISITIONS, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED BALANCE SHEETS
March 31, June 30,
2003 2003
-------- --------
CURRENT ASSETS
Cash $ 4,283 $ 297
Inventory 4,105
--------- --------
Total Current Assets 8,388 297
OTHER ASSETS
Deferred consulting fee 34,271
Notes receivable from principal stockholders -- 400,000
License agreement 75,188 75,188
-------- ---------
$ 83,576 $ 509,756
======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 3,274 $ 1,835
Accrued expenses 2,272 10,933
Due to principal stockholder 31,084 23,884
--------- --------
Total Current Liabilities $ 36,630 $ 36,652
STOCKHOLDERS' EQUITY
Common stock authorized 150,000,000
shares; $0.00001 par value; issued
and outstanding 3,562,875 and
3,257,875 shares at March 31 and
June 30, 2003 respectively 33 39
Additional contributed capital 102,073 542,067
Deficit accumulated during Development Stage (55,160) (69,002)
-------- ---------
Total Stockholders' Equity 46,946 473,104
-------- ---------
$ 83,576 $ 509,756
========= =========
See accompanying notes to financial statements.
NEW ENGLAND ACQUISITIONS, INC. AND SUBSIDIARIES
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
For the Period April 18, 2001 (Inception) to June 30, 2003
Common Stock Contributed Accumulated
Number Amount Capital Deficit Total
Issuance of shares to ------------------------------------------------------------------------
offices and directors
@$.001 per share 200,000 $ 200 -- -- $ 200
Effect of 15 to 1
stock split and
change of par
value to $.00001
per share 2,800,000 (170) $ 170 -- --
Sale of 7,500
shares @$2.00
per share 7,500 -- 15,000 -- 15,000
Cost of registration (15,170) $(3,364) (18,534)
Net loss for period (9,100) (9,100)
------------- -------- --------- --------- ---------
Balance March 31, 2002 3,007,500 30 -- (12,464) (12,434)
Issuance of 150,375
shares for license
agreement @$0.50
per share 150,375 2 75,186 -- 75,188
Issuance of 100,000
shares for acquisition
of CJC Enterprises
of New York, Inc.
@ $0.27 per share 100,000 1 26,887 -- 26,888
Net loss for period (42,696) (42,696)
------------- -------- --------- --------- ---------
Balance March 31, 2003 3,257,875 33 102,073 (55,160) 46,946
Issuance of 100,000
shares for consult-
ing fee for Ollie &
Partner's LLC @
$0.35 per share 100,000 1 34,999 -- 35,000
Issuance of 200,000
shares to officers and
directors @$2.00 per
share 200,000 4 399,996 -- 400,000
Issuance of 5,000 shares
to principal stockholder 5,000 1 4,999 -- 5,000
Net loss for period (13,842) (13,842)
------------- -------- --------- --------- ---------
Balance June 30, 2003 3,562,875 $ 39 $ 542,067 $(69,002) $(473,104)
============= ========= ========== ========= =========
See accompanying notes to financial statements.
NEW ENGLAND ACQUISITIONS, INC. AND SUBSIDIARIES
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended Inception to
June 30, June 30,
2003 2002 2003
-------------------------- -------------
NET SALES $ 25,358 $ 38,604
COSTS AND EXPENSES
Cost of good sold 19,202 25,976
Depreciation expense 4,855
Administrative expenses 19,998 2,300 55,266
---------- ------------ ------------
Total Costs and Expenses $ 39,200 $ 2,300 $ 86,097
NET LOSS BEFORE EXTRAORDINARY
LOSS (13,842) (2,300) (47,493)
EXTRAORDINARY LOSS - Discontinued
Operation (18,145)
---------- ------------ ------------
NET LOSS $ (13,842) $(2,300) $ (65,638)
NET LOSS PER SHARE, basic and diluted $ 0.01 $ 0.01 $ (0.02)
=========== =========== ============
Weighted average number of common
shares outstanding 3,277,875 3,007,500 3,109,405
see accompanying notes to financial statements.
NEW ENGLAND ACQUISITIONS, INC. AND SUBSIDIARIES
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Three Months Ended Inception to
June 30, June 30,
2003 2002 2003
---------------------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for period $(13,842) $ (2,300) $(65,638)
Adjustments to reconcile net loss to
net cash provided by
operating activities:
Depreciation expense 4,855
Amortization of deferred consulting fee 729 729
Loss on discontinued operations 18,145
Changes in operating assets and liabilities:
Decrease in inventory 4,105 3,193
Decrease in accounts payable (1,439) 1,835
Increase in accrued expenses 8,661 10,522
Decrease in due to principal stockholders (2,200) 2,300 28,884
---------- ----------- -------------
Net Cash (Used In) Provided by Operating
Activities (3,986) 2,525
CASH FLOWS FROM FINANCING ACTIVITIES
Cash acquired in acquisition of CJC Enterprises
of New York, Inc. 1,106
Sale of common stock 15,200
Cost of registering securities (18,534)
--------- ------------ ----------
Net Cash Provided by (Used In) Financing
Activities (2,228)
--------- ----------- -----------
NET INCREASE IN CASH (3,986) 297
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 4,283 100
--------- ----------- -----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 297 $ 100 $ 297
---------- ----------- -----------
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Non-cash investing and financing activities:
Assets acquired for issuance of common stock:
License agreement $ 75,188
----------
Deferred consulting fee $ 35,000 $ 35,000
----------- ----------
Notes receivable from principal stockholders $200,000 $200,000
=========== ==========
Acquisition of CJG Enterprises of New York, Inc.
and allocation of purchase price:
Cash $ 1,106
Inventory 3,193
Equipment and leasehold improvements 23,000
Accrued expenses (411)
----------
Net Capitalization $26,888
See accompanying notes to financial statements.
NEW ENGLAND ACQUISITIONS, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Condensed Financial Statements
In the opinion of the Company, the accompanying unaudited condensed financial
statements include all adjustments (consisting only of normal recurring
accruals) which are necessary for a fair presentation of the results for the
periods presented. Certain information and footnote disclosure, normally
included in the financial statements prepared in accordance with generally
accepted accounting principles, have been condensed and omitted. The results of
operations for the three months ended June 30, 2003 are not indicative of the
results of operations for the year ended March 31, 2004. The condensed financial
statements should be read in conjunction with the Company's financial statements
included in its Annual Report on Form 10-KSB for the year ended March 31, 2003.
2. Deferred Consulting Fee
On June 11, 2003, the Company entered into a marketing and sales agreement with
Ollie & Partners, LLC (O&P) to promote sales of the Company's Ethnic Shaving
Cream and Burn Lotion Products (the "Agreement"). O&P is to provide services
for a period of four years. In consideration for the services provided, the
company (a) paid $1,000 upon contract signing, (b) agreed to pay an additional
$1,000 per month in each of the following five months; (c) issued 100,000 shares
of the Company's common stock and (d) to the extent sales exceed $1,000,000
during the four year period, agreed to pay to O&P 6% of such excess.
3. Stockholders' Equity
In May 2003, the Company issued 200,000 shares of its common stock each to Gary
Cella and Jonathan Reisman, the Company's principal stockholders, in exchange
for their respective one year promissory notes in the amount of $200,000 each
which will be payable at the option of the respective purchaser (a) in cash with
interest at the annual rate of 5% or (b) with 120% of the nummber of shares
purchased by the purchaser, subject to customary adjustment in the event of any
stock dividend, stock split, combination or exchange of shares, merger,
consolidation, spin-off, recapitalization, or other distribution of assets to
stockholders.
On June 11, 2003, the Company issued 100,000 shares of its common stock to Ollie
& Partners, LLC to market and sell certain Company products. The stock was
valued by the Company at $0.35 per share based upon a block discount factor.
In June 2003, the Company sold 5,000 shares of its common stock to Gary Cella, a
principal stockholder, for consideration of $5,000.
Item 2. 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 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.
We have obtained limited rights to sell an ethnic shave cream, a burn lotion and
the Aurex-3 device from ADM Tronics Unlimited, Inc. Subject to the availability
of sufficient capital, we intend to initially aggressively market the shave
cream. We are reevaluating our plans to market the Aurex-3 and we have no plans
to market the burn lotion. We believe that we will require funding of
approximately $140,000 to aggressively market the shave cream and for working
capital during the next year.
We plan to obtain $150,000 through the private sale of our common stock. We
cannot assure you that we will be successful in obtaining any funds or that
$150,000 will be sufficient to fund our initial operations.
We have recently entered into a marketing and promotion agreement with a firm
specializing in ethnic products. We intend to formulate specific marketing
plans when that firm completes its recommendations to us.
If we do not make minimum royalty payments or purchase certain quantities of
products from ADM Tronics Unlimited, Inc. beginning in November 2003, and
continuing in subsequent years, we will lose certain rights of exclusivity. We
intend to pay the minimum royalties from revenues derived from sales. We do
not expect to purchase sufficient amounts from ADM Tronics to maintain the
rights such rights. ADM Tronics has, however, verbally agreed to extend the
time for minimum purchases by us. Because the terms of the extension have not
been finalized and are not evidenced by a written instrument signed by ADM
Tronics, no extension is now in effect. We cannot assure you that the extension
will actually be granted by ADM Tronics or that we will derive any meaningful
revenues from the sale of any of the products.
We will reimburse ADM Tronics for an estimated amount of $4,500 for any tooling
or non-recurring engineering services that are required to be secured in support
of the manufacturing of our products. Tooling includes molds, plates, screens
and other items used to produce components in a manufacturing process. Non-
recurring engineering services are services such as drafting, preparation of
schematics, evaluations and measurements that are performed prior to
manufacturing but are not repeated during the manufacturing process.
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 by November 2003, we will lose the exclusive rights to the
burn lotion. Because we do not have any plans to market the burn lotion, we do
not believe that the loss of the exclusive rights would be material to us.
We are in the process of negotiating the acquisition of rights to sell certain
gynecological medical devices from an unaffiliated company. We cannot assure
you that our negotiations will succeed. Even if we do acquire the rights, we
have no funds with which to promote and sell the devices.
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.
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 OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds.
(a), (b) Not applicable
(c) In May 2003, we sold 100,000 shares of our common stock each to Gary
Cella and Jonathan Reisman. In June 2003, we sold 100,000 shares of
our common stock to Ollie Johnson and 5,000 shares to Gary Cella.
There were no principal underwriters. The consideration for the
shares sold to Mr. Johnson is described in the response to Item
1 of our Annual Report on From 10-KSB forthe fiscal year ended
March 31, 2003 which response is hereby incorporated by
reference. The consideration for the shares sold to Gary Cella
and Mr. Reisman in May 2003 is described in Item 5(c)of such
Annual Report which response is hereby incorporated by reference.
We claimed an exemption from the registration requirements of the
Securities Act of 1933 pursuant to Section 4(2) of that Act
inasmuch as no public offering was involved.
(d) During the quarterly period ended June 30, 2003, we utilized
approximately $2,800 of the proceeds from our public sale of common
stock. Of the foregoing, $300 was paid to our corporate secretary to
reimburse him for an expense he had advanced on our behalf and the
remainder represented professional fees and administrative costs.
Item 6. Exhibits And Reports On Form 8-K.
(a) Exhibits
Exhibit Index Description
------------- -------------
3.01(a) Articles of Incorporation. (1)
3.01(b) Form of Articles of Amendment to Articles of Incorporation.(2)
3.03 Bylaws.(1)
4.01 Form of Specimen Stock Certificate for the Registrant's Common
Stock.(2)
4.02 The New England Acquisitions, Inc. 2003 Incentive Equity Plan(5)
10.01 Escrow Agreement of August 3, 2001 between the Registrant and
Patriot National Bank.(2)
10.02 Asset and Rights Purchase Agreement of March 21, 2002, by and
between ADM Tronics Unlimited, Inc. and the Registrant.(3)
10.03 Stock Purchase Agreement of February 14, 2003, by and between
CJC Enterprises of New York, Inc., Eugene Cella and the
registrant.(4)
10.04 Employment Agreement of February 14, 2003 between CJC
Enterprises of New York, Inc., and Eugene Cella.(6)
10.05 Agreement of June 11, 2003, by and between International
Products, Inc., Ollie & Partners, L.L.C. and Ollie Johnson.(7)
99.01 Certification Of Chief Executive Officer and Chief Financial
Officer.(7)
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(1) Filed as part of registration statement on Form SB-2, File No.
333-63432 and hereby incorporated by reference.
(2) Filed as part of Amendment No. 1 to registration statement on
Form SB-2 and hereby incorporated by reference.
(3) Filed as part of Post-Effective Amendment No. 2 to
registration statement on Form SB-2 and hereby incorporated
by reference.
(4) Filed as Exhibit 2.1 to our Current Report on Form 8-K dated
February 27, 2003 and hereby incorporated by reference.
(5) Filed as Exhibit 99.1 to our Current Report on Form 8-K dated
May 19, 2003 and hereby incorporated by reference.
(6) Filed as Exhibit 10.04 to our Annual Report on Form 10-KSB for
the fiscal year ended March 31, 2003 and hereby incorporated
by reference.
(7) Filed as Exhibit 10.05 to our Annual Report on Form 10-KSB for
the fiscal year ended March 31, 2003 and hereby incorporated
by reference.
(8) Filed herewith.
(b) Reports on Form 8-K
-------------------------------
(1) We filed an amendment to a report on Form 8-K dated February 27, 2003
which reported Item 5 and 7.
(2) We filed a report on Form 8-K dated May 19, 2003 which reported
Item 5 and 7.
(3) We filed a report on Form 8-K dated June 6, 2003 which reported Item 5.
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.
New England Acquisitions, Inc.
By: /s/Gary Cella
------------------------------
Name: Gary Cella
Title: Chief Executive Officer and Chief Financial Officer
Date: August 13, 2003
CERTIFICATION
I, Gary Cella, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of New England
Acquisitions, 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. I am the registrant's only certifying officer and am 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 me 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 my conclusions about the
effectiveness of the disclosure controls and procedures based on my
evaluation as of the Evaluation Date;
5. I have disclosed, based on my 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. I have indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of my most
recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: August 13, 2003
/s/ Gary Cella
-------------------------
Gary Cella
Principal Executive Officer and
Principal Financial Officer of the Registrant