UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 20, 2005 (May 4, 2004)
ATLANTIC WINE AGENCIES, INC.
(Exact name of registrant as specified in its charter)
Atlantic Wine Agencies Inc.
64 Knightsbridge
Florida London, UK SW1X 65-1102237
---------------------------- -------------------------- -------------------
(State or other jurisdiction (Address of Principal (I.R.S. Employer
of incorporation or Executive Offices) Identification No.)
organization)
Registrant's telephone number, including area code: 011-44-797-9057-242
================================================================================
The Company is filing this Amendment No. 1 to its Form 8-K dated May
19, 2004, as previously filed with the SEC on that date, to include certain
financial statements pursuant to Item 9.01 of the Form 8-K, commencing on Page
F-1 immediately following the signatures.
Item 2.01. Change in Control
On May 4, 2004 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.
Mount Rozier Estates (Pty) Limited and Mount Rozier Properties (Pty)
Limited produces top end quality wines on a boutique vineyard basis.
We intend to become a notable producer of quality wines from South
Africa by further: (i) developing and expanding our wine cellars through better
crop management; (ii) enhancing our strategic distribution channels with
Atlantic Wine Agencies Limited; and (iii) brand development efforts.
The launch of the wines under new patent branded labeling and marketing
are expected to be launched internationally in the second half of 2004.
Our wines will be initially issued in three tiers: Mount Rozier a top
quality premium brand; Rozier Reef a mid price range wine; and Rozier Bay a mass
market product.
Item 7.01 Regulation FD Disclosure
On February 22, 2004 the Company formed Atlantic Wine Agencies Limited,
a wholly owned subsidiary in the United Kingdom for the purposes of exclusive
distribution rights of wines and products in the United Kingdom, the European
Community and the United States of America in perpetuity.
In addition to the Merger, Atlantic Wine Agencies Ltd. has also
contracted the services of Mr. Christopher Burr a wine master internationally
respected for his opinion and knowledge of wines and a former managing director
of Christies Auction House in London, as well as hired a specialist wine maker,
a professional viticulturalist and an experienced estate manager. Turner
Townsend Plc has been retained as the construction supervision manager due to
its international reputation for experience in project property development and
agricultural management.
Although not yet formalized, the Company is studying the feasibility of
leisure and residential development on our vineyard properties as an additional
revenue stream and asset enhancement project.
Exhibit 99.01 Share Exchange Agreement between New Heights 560 Holdings LLC and
Atlantic Wine Agencies Inc., dated May 4, 2004 - Filed as an exhibit to Form 8-K
which was filed with the Securities and Exchange Commission on May 19, 2004
Item 9.01 Financial Statements
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Atlantic Wine Agencies Inc.
Date: January 20, 2005
/s/ Harry Chauhan
-------------------
Mr. Harry Chauhan,
President
ATLANTIC WINE AGENCIES, INC.
(A DEVELOPMENT STAGE COMPANY)
AND SUBSIDIARIES
AUDITED FINANCIAL STATEMENTS
APRIL 30, 2004
CONTENTS
--------------------------------------------------------------------------------
Report of Independent Registered Public Accounting Firm Page 1
Consolidated Balance Sheet 2
Consolidated Statement of Operations 3
Consolidated Statement of Stockholders' Equity 4
Consolidated Statement of Cash Flows 5
Notes to Consolidated Financial Statements 6
MEYLER & COMPANY, LLC
CERTIFIED PUBLIC ACCOUNTANTS
ONE ARIN PARK
1715 HIGHWAY 35
MIDDLETOWN, NJ 07748
Report of Independent Registered Public Accounting Firm
Board of Directors
Atlantic Wine Agencies, Inc. and Subsidiaries
London, United Kingdom
We have audited the accompanying consolidated balance sheet of Atlantic Wine
Agencies, Inc. and Subsidiaries as of April 30, 2004 and the related
consolidated statements of operations, stockholders' equity and cash flows for
the two months then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company as of April 30,
2004 and the results of its operations and its cash flows for the two months
then ended, in conformity with U.S. generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note A to the
consolidated financial statements, the Company has incurred cumulative losses of
$162,322 since inception, and there are existing uncertain conditions the
Company faces relative to its ability to obtain capital and operate
successfully. These conditions raise substantial doubt about its ability to
continue as a going concern. Management's plans regarding those matters are also
described in Note A. The financial statements do not include any adjustments
that might result from the outcome of these uncertainties.
Meyler & Company, LLC
Middletown, NJ
October 8, 2004
F-1
Atlantic Wine Agencies, Inc.
(A Development Stage Company)
and Subsidiaries
Consolidated Balance Sheet
April 30, 2004
Assets
Current Assets
Cash $ 113,086
Accounts receivable 15,851
Inventory 227,058
-----------
Total Current Assets 355,995
Property and equipment, net of accumulated depreciation
of $1,311 2,469,829
Other Assets
Trademarks, net of accumulated amortization of $405 48,128
-----------
$ 2,873,952
===========
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities
Accounts payable and accrued expenses $ 16,445
Loan from principal stockholder 154,982
-----------
171,427
Stockholders' Equity
Common stock authorized 150,000,000
shares; $0.00001 par value; issued and
outstanding 104,063,027 shares at
April 30, 2004 1,041
Paid-in capital 2,862,839
Accumulated deficit (162,322)
Accumulated other comprehensive income 967
-----------
Total Stockholders' Equity 2,702,525
-----------
$ 2,873,952
===========
See accompanying notes to financial statements.
F-2
Atlantic Wine Agencies, Inc.
(A Development Stage Company)
and Subsidiaries
Consolidated Statement of Operations
Inception
December 15,
Two Months 2003
Ended April 30, to April 30,
2004 2004
----------- -----------
Net Sales $ 27,843 $ 27,843
Costs and Expenses
Cost of sales 7,314 7,314
Selling, general and administrative 41,127 41,127
Stock based compensation 140,000
Depreciation and amortization 1,716 1,716
----------- -----------
Total Costs and Expenses 50,157 190,157
----------- -----------
Loss from operations (22,314) (162,314)
----------- -----------
Other Expense
Interest expense (8) (8)
----------- -----------
Net Loss $ (22,322) $ (162,322)
=========== ===========
Net Loss Per Common Share (Basic and Diluted) $ (0.35) $ (0.09)
=========== ===========
Weighted Average Common Shares Outstanding 1,718,763 1,718,763
=========== ===========
See accompanying notes to financial statements.
F-3
Atlantic Wine Agencies, Inc.
(A Development Stage Company)
and Subsidiaries
Consolidated Statement of Stockholders' Equity
April 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) 140,000
Net loss for the two months ended
April 30, 2004 (22,322) $ 967 (161,355)
----------- --------- ----------- -------------- --------- --------------
100,063,027 $ 1,041 $ 2,862,839 $ (162,322) $ 967 $ 2,702,525
=========== ========= =========== ============== ========= ==============
See accompanying notes to financial statements.
F-4
Atlantic Wine Agencies, Inc.
(A Development Stage Company)
and Subsidiaries
Consolidated Statement of Cash Flows
Two Months Inception
Ended April 30, December 15, 2003
2004 to April 30, 2004
------------- -------------
Cash Flows From Operating Activities
Net loss $ (22,322) $ (162,322)
Adjustments to reconcile net loss to
cash flows used in operating activities:
Stock based compensation 140,000
Depreciation and amortization 1,716 1,716
Increase in accounts receivable (15,851) (15,851)
Increase in inventory (227,058) (227,058)
Increase in accrued expenses 16,445 16,445
------------- -------------
Net Cash Flows Used in Operating Activities (247,070) (247,070)
------------- -------------
Cash Flows From Investing Activities
Cash paid for property and equipment (2,471,140) (2,471,140)
Cash paid for trademarks 48,532 48,532
------------- -------------
Net Cash Flows Used in Operating Activities (2,519,672) (2,519,672)
------------- -------------
Cash Flows From Financing Activities
Loan from principal stockholder 154,982 154,982
Capital contributions 2,723,879 2,723,879
------------- -------------
Cash Flows Provided by Financing Activities 2,878,861 2,878,861
------------- -------------
Effect of Exchange Rate Changes on Cash 967 967
------------- -------------
Increase in cash 113,086 113,086
Cash, Beginning of Period
------------- -------------
Cash, End of Period $ 113,086 $ 113,086
============= =============
Supplemental Cash Flow Information:
Cash Paid for Interest $ 8 $ 8
============= =============
See accompanying notes to financial statements.
F-5
Atlantic Wine Agencies, Inc.
(A Development Stage Company)
and Subsidiaries
Notes to Consolidated Financial Statements
April 30, 2004
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Atlantic Wine Agencies, Inc., formerly New England Acquisitions,
Inc., (the Company), is a company in the development stage and was
organized under the laws of the State of Florida. The Company
acquired New Heights 560 Holdings, LLC, a Cayman Island Limited
Liability Company, on May 4, 2004 which owns two subsidiaries in
South Africa and has world class vineyard producing high quality
wines to be marketed principally in Europe. New Heights had no
operations prior to May 4, 2004.
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. and its officers and directors replaced
New Heights 560 Holdings', LLC officers and directors. 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.
Going Concern
As indicated in the accompanying financial statements, the Company
has incurred cumulative net operating losses of $162,322 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.
Foreign Currency Translation
The Company considers the South African Rand to be its functional
currency. Assets and liabilities were translated into US dollars at
the period-end exchange rates. Statement of operations amounts were
translated using the average rate during the period. Gains and
losses resulting from translating foreign
F-6
Atlantic Wine Agencies, Inc.
(A Development Stage Company)
and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
April 30, 2004
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Foreign Currency Translation (Continued)
currency financial statements were accumulated in other
comprehensive income, a separate component of stockholders' equity.
Cash Equivalents
For purposes of reporting cash flows, cash equivalents include
investment instruments purchased with a maturity of three months or
less.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
Property and Equipment and Depreciation
Property and equipment is stated at cost and is depreciated using the
straight line method over the estimated useful lives of the
respective assets. Routine maintenance, repairs and replacement costs
are expensed as incurred and improvements that extend the useful life
of the assets are capitalized. Costs incurred in developing
vineyards, including related interest costs, are capitalized until
the vineyards become commercially productive. When property and
equipment is sold or otherwise disposed of, the cost and related
accumulated depreciation are eliminated from the accounts and any
resulting gain or loss is recognized in operations. The Company
computes depreciation using the straight line method. Leasehold
improvements are analyzed over the estimated useful lives of the
improvements.
Inventory
Inventory is valued at the lower of cost or market based on the
average cost method.
Revenue Recognition
Revenue from the sale of goods is recognized when the significant
risks and rewards of ownership are transferred to the buyer.
Consolidated Financial Statements
The consolidated financial statements include the Company and its
wholly owned subsidiaries. All significant intercompany transactions
and balances have been eliminated in consolidation.
F-7
Atlantic Wine Agencies, Inc.
(A Development Stage Company)
and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
April 30, 2004
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Comprehensive Income (Loss)
SFAS No. 130 establishes standards for the reporting and disclosure
of comprehensive income and its components which will be presented in
association with a company's financial statements. Comprehensive
income is defined as the change in a business enterprise's equity
during a period arising from transactions, events or circumstances
relating to non-owner sources, such as foreign currency translation
adjustments and unrealized gains or losses on available-for-sale
securities. It includes all changes in equity during a period except
those resulting from investments by or distributions to owners.
Comprehensive income is accumulated in accumulated other
comprehensive income (loss), a separate component of stockholders'
equity (deficit.)
Business Combinations and Goodwill
In July 2001, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 141, "Business Combinations". SFAS No. 141 requires
the purchase method of accounting for business combinations
initiated after June 30, 2001 and eliminates the
pooling-of-interests method.
In July 2001, the FASB issued SFAS NO. 142, "Goodwill and Other
Intangible Assets", which the Company adopted during 2003. SFAS No.
142 requires, among other things, the discontinuance of goodwill
amortization. In addition, the standard includes provisions for the
reclassification of certain existing recognized intangibles as
goodwill, reassessment of the useful lives of existing recognized
intangibles, reclassification of certain intangibles out of
previously reported goodwill and the identification of reporting
units for purposes of assessing potential future impairment of
goodwill.
In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets". SFAS No. 144 changes
the accounting for long-lived assets to be held and used by
eliminating the requirement to allocate goodwill to long-lived assets
to be tested for impairment, by providing a probability weighted cash
flow estimation approach to deal with situations in which alternative
courses of action to recover the carrying amount of possible future
cash flows and by establishing a primary-asset approach to determine
the cash flow estimation period for a group of assets and liabilities
that represents the unit of accounting for long-lived assets to be
held and used. SFAS No. 144 changes the accounting for long-lived
assets to be disposed of other than by sale by requiring that the
depreciable life of a long-lived asset to be abandoned be revised to
reflect a shortened useful life and by requiring the impairment loss
to be recognized at the date a long-lived asset is exchanged for a
similar productive asset or distributed to owners in a spin-off if
the carrying amount of the asset exceeds its fair value. SFAS No 144
changes the accounting for long-lived assets to be disposed of by
sale by requiring that discontinued operations no longer be
recognized at a net realizable value basis (but at the lower of
carrying amount or fair value less costs to sell), by eliminating the
recognition of future operating losses of discontinued components
before they occur, and by broadening the presentation of discontinued
operations in the income statement to include a component of an
entity rather than a segment of a business. A component of an entity
comprises operations and cash flows that can be clearly distinguished
operationally, and for financial reporting purposes, from the rest of
the entity.
F-8
Atlantic Wine Agencies, Inc.
(A Development Stage Company)
and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
April 30, 2004
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Net Loss Per Common Share
The Company computes per share amounts in accordance with Statement
of Financial Accounting Standards ("SFAS") No. 128, "Earnings per
Share". SFAS No. 128 requires presentation of basic and diluted EPS.
Basic EPS is computed by dividing the income (loss) available to
Common Stockholders by the weighted-average number of common shares
outstanding for the period. Diluted EPS is based on the
weighted-average number of shares of Common Stock and Common Stock
equivalents outstanding during the periods.
Stock-Based Compensation
SFAS No. 123, "Accounting for Stock-Based Compensation" prescribes
accounting and reporting standards for all stock-based compensation
plans, including employee stock options, restricted stock, employee
stock purchase plans and stock appreciation rights. SFAS No. 123
requires employee compensation expense to be recorded (1) using the
fair value method or (2) using the intrinsic value method as
prescribed by accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB25") and related
interpretations with pro forma disclosure of what net income and
earnings per share would have been had the Company adopted the fair
value method. The Company accounts for employee stock based
compensation in accordance with the provisions of APB 25.
Income Taxes
The Company has adopted Financial Accounting Statement SFAS No. 109,
Accounting for Income Taxes. Under this method, the Company
recognizes a deferred tax liability or asset for temporary
differences between the tax basis of an asset or liability and the
related amount reported on the financial statements. The principal
types of differences, which are measured at the current tax rates,
are net operating loss carry forwards. At April 30, 2004, these
differences resulted in a deferred tax asset of approximately $3,500.
SFAS No. 109 requires the establishment of a valuation allowance to
reflect the likelihood of realization of deferred tax assets. Since
realization is not assured, the Company has recorded a valuation
allowance for the entire deferred tax asset, and the accompanying
financial statements do not reflect any net asset for deferred taxes
at April 30, 2004.
The Company's net operating loss carry forwards amounted to $162,322
which will expire through 2019.
NOTE B INVENTORY
Inventory at April 30,2004 consists of:
Work in process $152,270
Bottled wine 74,788
--------
$227,058
========
F-9
Atlantic Wine Agencies, Inc.
(A Development Stage Company)
and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
April 30, 2004
NOTE C PROPERTY AND EQUIPMENT
Property and equipment at April 30, 2004 consists of:
Useful Life
--------------
Land and buildings $2,129,392 45 years
Vineyards 302,161 40 years
Furniture, fixtures and equipment 39,587 3 to 10 years
-------------
2,471,140
Less: accumulated depreciation 1,311
--------------
$2,469,829
NOTE D LOAN FROM PRINCIPAL STOCKHOLDER
At April 30, 2004, the principal stockholder advanced the company,
$154,982 for working capital. The loan is non- interest bearing and
has no stated maturity date.
NOTE E STOCKHOLDERS' EQUITY
On February 14, 2004, the Company entered into a consulting
agreement with Benjamin Mauerberger, whose brother Adam Mauerberger
is deemed to be a related party, to locate a merger partner and
consult on all aspects of the merger, to advise the Company on
hiring of senior management personnel and to develop growth
initiatives for the Company. Compensation for this agreement was the
issuance of 4,000,000 shares of the company's common stock valued at
$0.035 per share. On May 27, 2004, the Company filed a registration
statement with the Securities and Exchange Commission to register
these shares on Form S-8.
NOTE F EMPLOYMENT CONTRACTS
In March 2004, the Company entered into employment contracts with
key employees for a one year term which can be automatically renewed
on their anniversary dates. The total commitment to the Company
under the agreements aggregates $217,000 plus expenses which have a
ceiling of approximately $6,000 per month. In addition the
controlling stockholders gave 24,960,000 shares (25% of the Company)
from their holdings to one employee and 15,000,000 shares to
another.
NOTE G ACQUISITION OF AUSTRALIAN WINERY AND VINEYARD
On September 13, 2004, Atlantic Wine Agencies, Inc. entered into an
agreement to issue 20,000,000 shares of its common stock to the
stockholders of Dominion Wines, Ltd. and Dominion estates Pty., Ltd.
in exchange for all of the issued and outstanding shares of each of
those entities. Additionally, the Company agreed to make payments of
$2,508,962 to National Australian Bank to settle a loan facility
held by Dominion Wines, Ltd. to advance Dominion wines $179,038 for
working capital, and assume a $3,265,110 loan held by the
Commonwealth Bank of Australia. The Company also canceled 20,000,000
shares of its common stock which were held by certain stockholders.
F-10
Atlantic Wine Agencies, Inc.
(A Development Stage Company)
and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
April 30, 2004
NOTE G ACQUISITION OF AUSTRALIAN WINERY AND VINEYARD
Because the Company is currently in the process of completing its
acquisition audit and obtaining asset valuations, the effect of this
transaction has not been included in the Company's pro-forma
financial statement as at April 30, 2004. Preliminary and unaudited
financial data is presented below:
Balance Sheet:
Current assets $ 3,771,605
Fixed assets, net 11,623,064
Trademarks 37,566
-----------
Total Assets 15,432,235
Less: current liabilities
Bank debt 5,953,110
Other liabilities 1,904,246
-----------
Net Assets $ 7,574,879
===========
Preliminary and unaudited operating data for the year ended June 30, 2004 is
as follows:
Total revenue $3,728,564
Cash and expenses:
Costs of goods sold 2,419,478
General and administrative expense 1,280,479
----------
Total Expense 3,699,957
Net Income $ 28,607
==========
F-11