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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 September 30, 2002
Commission File Number 333-63432
New England Acquisitions, Inc.
(Exact name of small business issuer as specified in charter)
Florida 65-1102237
(State of either jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
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)
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Check whether the issuer (1) 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 ____
The number of shares of the registrant's only class of common stock outstanding
on November 13, 2002 was 3,157,875.
Transitional Small Business Disclosure format (check one):
Yes_____ No_X___
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TABLE OF CONTENTS
PAGE
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS 2
BALANCE SHEET (unaudited) - as of September 30, 2002 2
STATEMENT OF STOCKHOLDERS' EQUITY (unaudited)- For the
Period April 18, 2001 (Inception) to September 30, 2002 3
TATEMENT OF NET LOSS (unaudited) -- For the Three and
Six Month Periods Ended September 30, 2002 and 2001 and the
period from April 18, 2001 (Inception) through September
30, 2002 4
STATEMENTS OF CASH FLOWS (unaudited) -- For the Six Months
Periods Ended September 30, 2002 and 2001 and the Period from
April 18, 2001 (Inception) through September 30, 2002. 5
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF 7
OPERATION
ITEM 3. CONTROLS AND PROCEDURES 9
PART II - OTHER INFORMATION 9
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 9
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 10
SIGNATURES 10
CERTIFICATION 11
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PART I FINANCIAL INFORMATION
Item 1. Financial Statements
NEW ENGLAND ACQUISITIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
March 31, September 30,
2002 2002
(Audited) (Unaudited)
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CURRENT ASSETS
Cash $ 100 $ 100
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Total Current Assets 100 100
OTHER ASSETS
Restricted Cash 15,000 15,000
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$ 15,100 $ 15,100
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued expenses $ 7,500 $ 7,500
Due to principal stockholder 20,034 23,584
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Total Cu 27,534 31,084
STOCKHOLDERS' EQUITY
Common stock authorized 150,000,000
shares; $0.00001 par value; issued
and outstanding 3,007,500 shares
at March 31 and September 30, 2002 30 30
Deficit accumulated during De (12,464) (16,014)
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Total Stockholders' Equity-Deficit (12,434) (15,984)
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$ 15,100 $ 15,100
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See accompanying notes to financial statements.
2
NEW ENGLAND ACQUISITIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF STOCKHOLDERS' EQUITY
For the Period April 18, 2001 (Inception) to September 30, 2002
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 (audited) 3,007,500 30 - (12,464) (12,434)
Net loss for the
six month period
ending September
30, 2002
(unaudited) - - (3,550) (3,550)
--------- ------- ----------- ----------- --------
3,007,500 $ 30 $ - ($16,014) ($15,984)
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See accompanying notes to financial statements.
3
NEW ENGLAND ACQUISITIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF NET LOSS
Inception
For the three month Period For the six month Period to
ended September 30, ended September 30, June 30,
2001 2002 2001 2002 2002
Unaudited Unaudited (Unaudited) (Unaudited)
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GENERAL AND ADMINISTRATIVE
EXPENSES
Professional fees $ - $ 1,250 $ - $ 3,550 $ 12,550
Bank charges - - - - 100
---------- --------- ------------ ------------ ------------
- 1,250 - 3,550 12,650
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NET LOSS FOR THE PERIOD $ - $ 1,250 $ - $ 3,550 $ 12,650
========== ========= ============ ============ ============
NET LOSS PER SHARE $ - $ - $ - $ (0.001) $ (0.004)
========== ========= ============ ============ ============
Weighted average number of common
Shares Outstanding - - 3,000,000 3,007,500 3,004,789
========== ========= ============ ============ ============
See accompanying notes to financial statements.
4
NEW ENGLAND ACQUISITIONS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
(Unaudited)
Inception
For the six month To
Period ended September 30, September 30,
2001 2002 2002
(Unaudited) (Unaudited)
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CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss for the period $ - $ 3,550 $ (12,650)
Adjustments to reconcile net loss to
Net cash provided by (used in)
Operating activities -
Restricted cash - - (15,000)
Accrued expenses - - 7,500
Due to principal stockholder - 3,550 23,584
Net cash Provided by Operating
Activities - - 3,434
CASH FLOWS FROM FINANCING
ACTIVITIES
Sales of common stock 200 - 15,200
Cost of registering securities - - (18,534)
Net Cash Provided by Financing
Activities 200 - (3,334)
Net increase in Cash 200 - 100
CASH AT BEGINNING OF PERIOD - 100 -
--------- --------- ------------
CASH AT END OF PERIOD $ 200 $ 100 $ 100
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SUPPLEMENTAL CASH FLOW INFORMATION:
None
See accompanying notes to financial statements.
5
NEW ENGLAND ACQUISITIONS, INC.
(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 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, 2002. Reference is also
made to Post Effective Amendment Number 5 to the Company's registration
statement on Form SB-2. The Company has had no significant operations
since inception.
2. Subsequent Events
All of the purchasers of 7,500 of shares of the company's common stock in
the initial public offering have confirmed their investment.
On October 7, 2002, the Company, through a newly formed wholly owned
subsidiary, consummated its Asset and Rights Purchase Agreement with ADM
Tronics Unlimited, Inc. to acquire the right to market and sell three
different medical products and entered into a manufacturing agreement with
ADM Tronics. As a result, the Company issued 150,375 shares of its common
stock to ADM Tronics
On November 3, 2002, 3,007,500 shares and $15,000 were released from the
escrow account at Patriot National Bank. The $15,000, which was previously
reflected as restricted cash, has become operating cash.
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Item 2. Management's Plan Of Operation
The following should be read in conjunction with our financial statements and
the related note that appear elsewhere in this Quarterly 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.
We have not had any revenues or operations since inception. Our ability to
become and continue as a going concern is dependent in significant part upon
obtaining additional substantial capital
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 and the Aurex-3. We have no plans to market the burn lotion.
We believe that we will require funding of approximately $140,000 to
aggressively market the products and for working capital during the first year
after our acquisition of the products. We believe that we can begin marketing
the products within three months from the time we acquire them from ADM Tronics.
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.
If we are successful in obtaining additional capital of $150,000, we plan to
initially utilize a phased communications and distribution strategy to market
the ethnic shave cream. We intend to begin with New York City and the Bahamas.
In the first phase, a communications piece will be developed and distributed to
distribution units and orders will be taken from a website, or by replying to
the direct mail campaign. In the second phase, communications will be sent to
Philadelphia, Baltimore, Washington, Chicago, Detroit, Houston, Memphis, New
Orleans, and, subsequently, Los Angeles. In the third phase, we intend to hire
a sales person to visit large distributors to retail stores. Our estimated
initial expenditures are $50,000 for the design and development of our website
and its maintenance for the first year, $2,000 for the purchase of lists, and
$15,000 for the development, production and distribution of hard copy and
offline mail messages.
7
We also plan to use a similar phased communications and distribution strategy to
market the Aurex-3. Our estimated initial expenditures are $50,000 for the
design and development of our website and its maintenance for the first year,
and $15,000 for the development, production and distribution of hard copy and
offline mail messages.
If we are only able to obtain additional capital of at least $70,000, but less
than $140,000, we intend to develop a website and to market the ethnic shave
cream and the Aurex-3 through the website and our communications piece. If we
are able to obtain additional capital of at least $140,000, we intend to
aggressively market the ethnic shave cream and the Aurex-3.
If we not able to obtain additional capital of at least $70,000, we intend to
market the ethnic shave cream through commissioned sales agents and our sales
piece and, to the extent of available capital, engage in additional limited
promotional activities.
If we only obtain proceeds of $50,000 or less, including $7,500 released to us
from the escrow account, the capital will only be sufficient to meet our
anticipated capital requirements for less than six months. Even if we are able
to obtain additional capital of $150,000 in addition to the proceeds from the
escrow account, we believe that the capital will only be sufficient to meet our
anticipated capital requirements for one year. If we exhaust our capital and
cannot obtain additional capital, our stockholders can expect to lose all of
their investment.
We believe that we can begin marketing products within three months from the
time we acquired them from ADM Tronics.
If we cannot obtain any meaningful amounts of capital or if the only funds
available to us are those released to us from the escrow account, we will
attempt to market the products solely through commissioned sales agents and our
sales piece and we will not be able to develop a website. There can be no
assurance that we can find suitable sales agents who will work solely on a
commission basis or that the products can be sold without any promotional
activities on our part, other than the communications piece we intend to
develop.
If we do not make minimum royalty payments or purchase certain quantities of
products from ADM Tronics within the first year after we acquire its products
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 know if we will be able to purchase a sufficient number of the Aurex-3 from
ADM Tronics to maintain all of the rights we initially receive. We cannot
assure you 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.
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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 within one year from the consummation of the transaction
with ADM Tronics, 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 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) The registrant's principal executive officer and principal financial
officer has evaluated the effectiveness of the registrant's 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 disclosure controls and procedures of the
registrant have ensured that material information relating to the
registrant, including its consolidated subsidiary, is made known to him
by others within those entities, particularly during the period in which
this quarterly report is being prepared.
(b) There were no significant changes in the registrant's 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), (c) Not applicable.
(d) The registrant's registration statement on Form SB-2, file number 333-
63432, was declared effective on September 28, 2001. The offering
commenced on October 31, 2001. Of the 15,000 shares of common stock
registered at an aggregate offering price of $30,000, 7,500 shares
were sold for an aggregate of $15,000. All of the proceeds had been
deposited and continued to remain in an escrow account as of
September 30, 2002. The expenses of the offering are described in
such registration statement.
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Item 6. Exhibits And Reports On Form 8-K.
(a) Exhibits
3.01(a) Articles of Incorporation.*
3.01(b) Form of Articles of Amendment to Articles of
Incorporation.**
3.03 Bylaws.*
4.01 Form of Specimen Stock Certificate for the
Registrant's Common Stock. **
10.01 Escrow Agreement of August 3, 2001 between
the Registrant and Patriot National Bank.**
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* Filed as part of registration statement on Form SB-2, File No. 333-63432
and hereby incorporated by reference.
** Filed as part of Amendment No. 1 to registration statement on Form SB-2 and
hereby incorporated by reference.
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
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Name: Gary Cella
Title: Chief Executive Officer and Chief Financial Officer
Date: November 14, 2002
10
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CERTIFICATION
I, Gary Cella, certifies 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: November 13, 2002.
/s/ Gary Cella
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Gary Cella
Principal Executive Officer and
Principal Financial Officer of the Registrant
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND
CHIEF FINANCIAL OFFICER PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT
TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I hereby certify that the Quarterly Report of New England Acquisitions, Inc. on
Form 10-QSB for the quarterly period ended June 30, 2002, fully complies with
the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934 and that information contained in the Quarterly Report fairly presents, in
all material respects, the financial condition of New England Acquisitions, Inc
Date: November 14, 2002 /s/ Gary Cella
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Gary Cella
Chief Executive Officer and
Chief Financial Officer
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