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 September 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 November 11, 2003 was 3,570,975.
________________
Transitional Small Business Disclosure format (check one):
Yes_____ No_X___
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Item 1. - Financial Statements
NEW ENGLAND ACQUISITIONS, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED BALANCE SHEETS
March 31, September 30,
2003 2003
-------- --------
CURRENT ASSETS
Cash $ 4,283 $ 83
Inventory 4,105 --
--------- --------
Total Current Assets 8,388 83
OTHER ASSETS
Deferred consulting fee -- 32,083
Notes receivable from principal stockholders -- 400,000
License agreement 75,188 75,188
-------- ---------
$ 83,576 $ 444,697
======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 3,274 $ 1,835
Accrued expenses 2,272 10,933
Due to principal stockholder 31,084 41,884
--------- --------
Total Current Liabilities $ 36,630 $ 54,652
STOCKHOLDERS' EQUITY
Common stock authorized 150,000,000
shares; $0.00001 par value; issued
and outstanding 3,257,875 and
3,570,975 shares at March 31 and
September 30, 2003 respectively 33 40
Additional contributed capital 102,073 550,166
Deficit accumulated during Development Stage (55,160) (160,161)
-------- ---------
Total Stockholders' Equity 46,946 390,045
-------- ---------
$ 83,576 $ 444,697
========= =========
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 September 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 400,000
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
Issuance of 8,100 shares
to principal stockholder 8,100 1 8,099 -- 8,100
Net loss for period (105,001) (105,001)
------------- -------- --------- --------- ---------
Balance September 30, 2003 3,570,975 $ 40 $ 550,166 $(160,161) $(390,045)
============= ========= ========== ========= =========
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 For the six Months Ended Inception to
September 30, September 30, September 30,
2002 2003 2002 2003 2003
(Unaudited) (Unaudited) (Unaudited)
-------------------------- ---------------------- -------------------
NET SALES $ -- $ 12,093 $ -- $ 37,451 $ 50,697
COSTS OF GOOD SOLD -- 12,093 -- 31,295 38,069
------- ---------- --------- ---------- --------------
GROSS PROFIT -- -- -- 6,156 12,628
GENERAL AND ADMINSRATIVE EXPENSE:
Professional fees $ 1,250 $ 25,265 $ 3,550 $ 31,160 $ 55,203
Amortization expense -- 64,845 -- 65,574 65,574
Depreciation expense -- -- -- -- 4,855
Other administrative expenses -- 993 -- 14,334 25,437
Bank charges -- 56 -- 89 211
------- ----------- --------- ---------- ------------
Total cost and expenses $ 1,250 $ 91,159 $ 3,550 $ 111,157 $ 151,280
NET LOSS BEFORE EXTRAORDINARY LOSS $(1,250) $ (91,159) $(3,550) $(105,001) $(138,652)
========= ========= ========== =========== ===========
EXTRAORDINARY LOSS - Discontinued
Operation -- -- -- -- $ (18,145)
--------- --------- ---------- ---------- ------------
NET LOSS FOR PERIOD $(1,250) $ (91,159) $(3,550) $(105,001) $(156,797)
========= ========== ========== =========== ===========
NET LOSS PER SHARE, basic and diluted $ -- $ (0.03) $(0.001) $ (0.03) $ (0.05)
=========== =========== =========== =========== ===========
Weighted average number of common
shares outstanding -- -- 3,007,500 3,490,926 3,305,580
see accompanying notes to financial statements.
NEW ENGLAND ACQUISITIONS, INC. AND SUBSIDIARIES
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Six Months Ended Inception to
September 30, September 30
2003 2002 2003
---------------------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for period $(105,001) $ (3,550) $(156,797)
Adjustments to reconcile net loss to
net cash provided by
operating activities:
Depreciation expense -- -- 4,855
Amortization of deferred consulting fee 2,917 -- 2,917
Amoritization of license agreement 62,657 -- 62,657
Loss on discontinued operations -- -- 18,145
Changes in operating assets and liabilities:
Decrease in inventory 4,105 -- 3,193
(Decrease)increase in accounts payable (1,439) -- 1,835
Increase in accrued expenses 8,661 -- 10,522
Decrease in due to principal stockholders 15,800 -- 46,884
---------- ----------- -------------
Net Cash (Used In) Provided by Operating
Activities (12,300) -- (5,789)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash acquired in acquisition of CJC Enterprises
of New York, Inc. 8,100 -- 1,106
Sale of common stock -- -- 23,300
Cost of registering securities -- -- (18,534)
--------- --------- ------------
Net Cash Provided by (Used In) Financing
Activities 8,100 -- 5,872
--------- ---------- -----------
NET INCREASE IN CASH (4,200) -- 83
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 4,283 100
--------- ----------- -----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 83 $ 100 $ 83
---------- ----------- -----------
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 $ 400,000 $400,000
=========== ==========
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 six months ended September 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) which has agreed to use its "best efforts" in
administrative, marketing and creative areas to bring the Company's licensed
shave cream ad burn lotion to market for a period of four years. Under the
agreement, the Company has paid $4,000 and 100,000 shares of the Company's
common stock. To the extent sales exceed $1,000,000 during the four year period,
O&P will be paid 6% of such excess.
3. Stockholders' Equity
In May 2003, the company issued 100,000 of its common stock to each of the
Company's two executive officers who are also the Company's principal
stockholders. The purchase price was represented by their 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)
120% of the 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 in
connection with the Company's agreement with O&P. For purposes of recording the
transaction, the stock was valued $.35 per share based upon a block discount
factor.
In June 2003, the Company sold 5,000 shares of its common stock to its
President, who is also a principal stockholder, for $5,000.
In August 2003, the Company sold 8,100 shares of its common stock to its
President, who is also a principal stockholder, for $8,100.
4. Sales and Marketing Agreement On August 25, 2003, the Company entered into
an agreement under which its wholly owned subsidiary had been appointed by
Repro-Med Systems, Inc. as the exclusive world wide distributor of two
gynecological medical devices. The Company will purchase the products from
Repro-Med System, Inc. at specified prices. Assuming the Company achieves
certain sales levels, the agreement provides for an exchange of each company's
common stock. As at September 30, 2003, the Company's sales of the medical
devices were $12,093.
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 $200,000 to aggressively market the shave cream and for working
capital during the next year.
We plan to obtain $200,000 through the private sale of our common stock. We
cannot assure you that we will be successful in obtaining any funds or that
$200,000 will be sufficient to fund our initial operations. We have not yet
begun our efforts to obtain funds.
We have 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.
In August 2003 we entered into an agreement under which our wholly owned
subsidiary has been appointed by Repro-Med Systems, Inc. as the exclusive
worldwide distributor of two gynecological medical devices. The devices consist
of a Masterson Endometrial Biopsy Kit for in-office physician biopsy sampling
procedures and the Thermal Cautery System used designed to be used by physicians
for tubal ligation procedures. Because of our lack of funds and experience,
Repro-Med has agreed to perform certain functions for us.
Because we did not make minimum royalty payments or purchase certain quantities
from ADM Tronics Unlimited, Inc., we have lost certain rights of exclusivity.
Although ADM Tronics has verbally agreed to extend the time for such payments
and royalties, the terms of the extension have not been finalized and is not
evidenced by a written instrument signed by ADM Tronics, no extension is now in
effect. We have recently had difficulty in contacting ADM Tronics' President
and 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 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 August 2003, we sold 8,100 shares of our common stock to Gary
Cella for $8,100. There were no principal underwriters. 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) Not applicable
Item 6. Exhibits And Reports On Form 8-K.
(a) Exhibits
Exhibit Index Description
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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)
10.06 Agreement of August 25, 2003 by and between International
Products, Inc., Andrew I. Sealfon and Repro-Med Systems, Inc.
(8)
99.01 Certification Of Chief Executive Officer and Chief Financial
Officer.(9)
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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 as Exhibit 99.1 to our Current Report on Form 8-K dated
August 26, and hereby incorporated by reference.
(9) Filed herewith.
(b) Reports on Form 8-K.
We filed a report on Form 8-K dated August 26, 2003 which reported on Items 5
and 7.
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: November 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: November 13, 2003
/s/ Gary Cella
-------------------------
Gary Cella
Principal Executive Officer and
Principal Financial Officer of the Registrant