UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2005 Commission File Number
333-63432
ATLANTIC WINE AGENCIES INC.
(Name of small business issuer in its charter)
Florida 65-1102237
(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 Securities registered under
Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
None
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 []
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]
The aggregate market value of the voting common stock held by non-affiliates of
the registrant as of August 15, 2005 was approximately $63,909,365 based on
35,505,203 shares of common stock outstanding on August 15, 2005.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Background
We are a Florida corporation formed on April 8, 2001. We were organized to be a
blank check company.
On December 16, 2003, Rosehill Investments Limited, a Seychelles corporation
("Rosehill"), acquired 11,937,200 shares of New England Acquisitions, Inc.'s
("Company") Common Stock ("Shares") pursuant to a Stock Purchase Agreement among
Rosehill, the Company, Mr. Jonathan B. Reisman and Mr. Gary Cella (the
"Agreement"). The Agreement provided for the Shares to be sold as follows:
9,234,520 shares from the Company; 1,379,600 shares from Mr. Reisman; and
1,323,100 shares from Mr. Cella. As a result of the stock sale, the Directors of
the Company resigned and ultimately Mr. Harry Chauhan was appointed as the sole
officer and director.
At that time there were 12,552,395 shares of common stock issued and
outstanding.
On January 13, 2004, the Company amended its Articles of Incorporation to change
its name from New England Acquisitions, Inc. to Atlantic Wine Agencies Inc.
On February 9, 2004, the Company's directors resigned and Mr. Harry Chauhan was
appointed as the Company's sole Director and its President.
On March 1, 2004 the Company completed a 1-for-200 reverse capitalization
without affecting the par value or authorized number of shares.
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 "Share
Exchange"). New Heights owned the property in South Africa on which our vineyard
operations are located.
Prior to the Share Exchange, the Company was engaged in the business of
manufacturing and distributing various skin creams and generated minimal
revenues as a result.
Present
As a result of the Share Exchange, 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 occurred
in the fourth fiscal quarter of 2004 in South Africa and the United Kingdom.
However, we anticipate a steady growth of sales to occur during the remaining
quarters of the calendar year 2005.
1
Our wines were initially issued in three tiers: Mount Rozier a top quality
premium brand; Rozier Bay a mid price range wine; Rozier Reef and a mass market
product. Such wines have received several significant awards recently and we are
building a regional route to market for sales which is on target with our early
internal projections.
In September 2004, Mr. Adam Mauerberger became President of the Company and
Chairman of the Board. Also in September the Company hired Mr. Andy Bayley to be
the Senior Vice President of Sales and Marketing.
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.
Dominion Exchange Transaction
On September 16, 2004, in exchange for 20,000,000 shares of our common stock and
payments of AUD$3,360,000 ("Shareholder Loan") among other consideration, we
entered into an agreement to acquire all of the shares of two Australian
companies, Dominion Estates Pty Ltd and Dominion Wines Ltd (collectively,
"Dominion Entities") which we believed would enhance our presence in Australia
and our ability to further deliver a high quality product locally in Australia
("Dominion Exchange Transaction"). In order to make the AUD$3,360,000 payment to
the Dominion Entities, the Company had to borrow such funds from a shareholder
of the Company. As a result of the anticipated success of the Dominion Exchange
Transaction, on October 26, 2004, the Company added Messrs. Andy Bayley and Carl
Voss to its Board of Directors.
Over the course of the 6 months following September 2004, our independent
auditor along with the Dominion Estates local auditor were unable to complete
audits on the Dominion Entities as required by the United States Federal
Securities Laws due to a lack of accurate record keeping and supporting
valuations by local management. In addition to the aforementioned issues, the
Company's management concluded that the value of the assets of the Dominion
Entities were unclear and that a substantial charge over the assets of one of
those enterprises, by a local law firm, had not been discharged post-settlement
in contravention to the Company's understanding. The Company's management
believed a material breach of the Share Exchange Agreement governing the
Dominion Share Exchange had occurred, but the prudent coarse of action was to
attempt to facilitate a settlement if at all possible with the seller of the
Dominion Entities rather than litigate.
As a stop gap measure, the Company placed one of the Dominion Entities, Dominion
Estates Pty Ltd ("Dominion Estates") into voluntary administration in Australia
with the hope that a local administrator would be successful in clarifying the
true financial status of Dominion Estates and effecting the desired settlement.
As a result of the failed Dominion Exchange Transaction, the Company's
shareholders determined that a change of management was required and Messrs.
Harry Chauhan and Carl Voss tendered their resignations in March of 2005.
The 20,000,000 shares of the Company issued in the Dominion Exchange Transaction
are now held in Escrow by United States counsel to the Dominion Entities and we
anticipate effecting the settlement shortly whereby: (i) the 20,000,000 shares
will be returned to the Company and subsequently cancelled, (ii) the Shareholder
Loan will be forgiven; and (iii) The Company will be released from any and all
liabilities related to the Dominion Entities. In the event the settlement
transaction is not effected we will take all necessary steps to cancel the
20,000,000 shares of the Company issued pursuant to the Dominion Exchange
Transaction and recover all sums loaned to the Dominion Entities including legal
and accounting expenses incurred in the United States and abroad.
ITEM 2. DESCRIPTION OF PROPERTY
Mount Rosier Estate a World Class Vineyard located in previously known as Myrtle
Grove No 1380, Stellenbosch. The property is sub divided in parcels of land of
50.9 hectares and 29.2 hectares making a total of 80.10 hectares. The Company
also manages 29.6 hectares owned by a neighboring farm.
2
The Estate also comprises of a winery, barrel holding area, a number of outer
houses which are being converted into Guest Lodges, 2 main residences one for
the use of the Estate Manager, and the other to be converted into Wine tasting
and picnic area.
The existing wine tasting area which is attached to the barrel storage area and
winery will be converted to a meet and greet area for the professional buyers.
The Estate also has its own water dam which supplies not only the farm on the
estate but also other neighbors on a limited basis. Around 20 hectares of land
are under wine currently which will increase to around 60 hectares. The property
is located next to a site owned by a wine farm, known as Vergelegen Estate.
Access to the farm is by way of a servitude road which is a common road, which
is served and serviced by all the farms in the vicinity, therefore can be
classed as a common access road.
ITEM 3. LEGAL PROCEEDINGS
Other than as disclosed below, the Company is not a party to any material
pending legal proceedings or government actions, including any bankruptcy,
receivership, or similar proceedings. Management of the Company does not believe
that there are any proceedings to which any director, officer, or affiliate of
the Company, any owner of record of the beneficially or more than five percent
of the common stock of the Company, or any associate of any such director,
officer, affiliate of the Company, or security holder is a party adverse to the
Company or has a material interest adverse to the Company.
The Company's estate manager, Mr. Dave Lyddell, who resigned during the
reporting period under claimed duress has threatened to take action against the
Company's South African subsidiaries for lost salary and other damages in the
event that a settlement cannot be reached. However, although we believe that a
settlement with Mr. Lyddell is likely, we are prepared to vigorously defend
ourselves if necessary.
As referenced above in connection to the Dominion Exchange Transaction, the
Company has retained counsel in Australia as well as the United States to
prepare a litigation strategy against all related Dominion Entities' parties in
the event that the anticipated settlement transaction does not occur in a timely
manner.
3
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
1) On May 4, 2004, the majority shareholder approved entering into an
exchange agreement with New Heights 560 Holdings, Inc., whereby New
Heights became the majority shareholder in exchange for all of its
assets.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(a) The Company's Common Stock is traded on the OTC-Bulletin Board under the
symbol AWNA. The following sets forth the range of the closing bid prices for
the Company's Common Stock for the period January 1, 2003 through August 15,
2005. Such prices represent inter-dealer quotations, do not represent actual
transactions, and do not include retail mark-ups, mark-downs or commissions.
Such prices were determined from information provided by a majority of the
market makers for the Company's Common Stock.
High Close Low Close
2003
First Quarter 1.90 1.60
Second Quarter 2.25 1.45
Third Quarter No activity No activity
Fourth Quarter 3.00 .60
2004
First Quarter 1.25 1.00
Second Quarter 3.00 1.15
Third Quarter 2.10 1.77
Fourth Quarter 2.15 1.77
2005
First Quarter 1.78 1.75
Second Quarter (through
8/15/05) 1.78 1.75
(b) The approximate number of holders of the Common Stock of the Company as of
August 15, 2005 was 538.
(c) No cash dividends were declared by the Company during the fiscal year
ended March 31, 2005. While the payment of dividends rests within the
discretion of the Board of Directors, it is not anticipated that cash
dividends will be paid in the foreseeable future, as the Company intends
to retain earnings, if any, for use in the development of its business.
The payment of dividends is contingent upon the Company's future earnings,
if any, the Company's financial condition and its capital requirements,
general business conditions and other factors.
(d) No shares were available for issuance under any equity compensation plan
at March 31, 2005.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
4
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS
It should be noted that this Management's Discussion and Analysis of Financial
Condition and Results of Operations may contain "forward-looking statements."
The terms "believe," "anticipate," "intend," "goal," "expect," and similar
expressions may identify forward-looking statements. These forward-looking
statements represent the Company's current expectations or beliefs concerning
future events. The matters covered by these statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from those set forth in the forward-looking statements, including the Company's
dependence on weather-related factors, introduction and customer acceptance of
new products, the impact of competition and price erosion, as well as supply and
manufacturing restraints and other risks and uncertainties. The foregoing list
should not be construed as exhaustive, and the Company disclaims any obligation
subsequently to revise any forward-looking statements to reflect events or
circumstances after the date of such statements, or to reflect the occurrence of
anticipated or unanticipated events. In light of the significant uncertainties
inherent in the forward-looking information included herein, the inclusion of
such information should not be regarded as a representation that the strategy,
objectives or other plans of the Company will be achieved. The Company wishes to
caution readers not to place undue reliance on any such forward-looking
statements, which speak only as of the date made.
RESULTS OF OPERATIONS
We are currently in the early stages of our first sales cycle and have generated
$120,913 to date. Our activities from inception through the second quarter of
fiscal 2004 were related to our formation, preparation of our business model,
arranging and planning financing, developing our business model and acquiring
the rights to various properties as well as growing and harvesting our grapes.
During the third and fourth quarters of fiscal 2004 we began the production and
consequent bottling of our wines.
We have financed our operations to date through loans made to us by our
shareholders and their affiliates.
Operating costs for the year ended March 31, 2005 aggregated $1,384,657 or
(0.01) per share as compared to $1,189,165 or (0.01) per share for the year
ended March 31, 2004.
Our wine distribution began in earnest after the end of the reporting period and
we anticipate significant sales during the following quarters as a result of our
increased presence in the marketplace.
LIQUIDITY AND CAPITAL RESOURCES
For the year ended March 31, 2005 net cash used to fund operating activities
totaled $(2,377,695), net cash utilized by investing activities totaled
$(330,850) and net cash provided by financing activities totaled $2,910,668.
From inception through March 31, 2004, net cash used to fund operating
activities totaled approximately $(247,070), net cash utilized by investing
activities totaled $(2,519,672) and net cash provided by financing activities
totaled $2,878,861.
The primary reason for the difference in net cash utilized by investing
activities was the acquisition of property and equipment occurring in the year
ended March 31, 2004 to which we did not have a corresponding activity for the
year ended March 31, 2005.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The Company's discussion and analysis of its financial condition and results of
operations are based upon the 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.
5
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.
6
ITEM 7. FINANCIAL STATEMENTS
Item 7. Financial Statements
Table of Contents
Report of Independent Auditor F-1
Consolidated Balance Sheets F-2
Consolidated Statement of Stockholders' Equity F-3
Consolidated Statements of Operations F-4
Consolidated Statements of Cash Flows F-5
Notes to Financial Statements F-6
7
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 sheets of Atlantic Wine
Agencies, Inc. and Subsidiaries as of March 31, 2005 and 2004 and the related
consolidated statements of operations, stockholders' equity and cash flows for
the year and the month 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 March 31,
2005 and 2004 and the results of its operations and its cash flows for the year
ended March 31, 2005 and for the period March 1, 2004 (inception) to March 31,
2005, 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
$2,812,566 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
August 1, 2005
F-1
Atlantic Wine Agencies, Inc.
and Subsidiaries
Consolidated Balance Sheets
Assets
March 31,
---------
2005 2004
---- ----
Current Assets
Cash $ 97,487 $ 113,086
Accounts receivable 37,055 15,851
Inventory 1,543,457 227,058
Prepaid expenses and other 43,960
Receivable from officer 48,761
----------- -----------
Total Current Assets 1,770,720 355,995
----------- -----------
Property and equipment, net of accumulated depreciation
of $41,249 and $1,311, respectively 2,758,000 2,469,829
Other Assets
Trademarks, net of accumulated amortization of $9,784
and $405, respectively 40,012 48,128
----------- -----------
$ 4,568,732 $ 2,873,952
=========== ===========
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $ 101,381 $ 1,768
Accrued expenses 113,752 14,677
Due to Dominion Estates Pty Ltd 344,381
Accrued payroll taxes 65,181
----------- -----------
624,695 16,445
Long Term Liabilities
Loans from principal stockholders 2,721,269 154,982
Stockholders' Equity
Common stock authorized 150,000,000
shares; $0.00001 par value; issued and
outstanding 84,838,027 and 104,063,027
shares at March 31, 2005 and 2004, respectively 849 1,041
Paid-in capital 4,249,531 3,861,839
Accumulated deficit (2,812,566) (1,161,322)
Accumulated other comprehensive income (215,046) 967
----------- -----------
Total Stockholders' Equity 1,222,768 2,702,525
----------- -----------
$ 4,568,732 $ 2,873,952
See accompanying notes to financial statements.
F-2
Atlantic Wine Agencies, Inc.
and Subsidiaries
Consolidated Statements of Operations
For the Year March 1, 2004
Ended March 31, Inception
2005 to March 31, 2004
--------------------- -------------------
Net Sales $ 120,913 $ 27,843
Costs and Expenses
Cost of sales 137,589 7,314
Selling, general and administrative 1,189,756 41,127
Interest expense 4,808 8
Stock based compensation 387,500 1,139,000
Depreciation and amortization 52,504 1,716
------------- -------------
Total Costs and Expenses 1,772,157 1,189,165
------------- -------------
Net loss $ (1,651,244) $ (1,161,322)
============= =============
Net Loss Per Common Share (Basic and Diluted) $ (0.02) $ (0.01)
------------- -------------
Weighted Average Common Shares Outstanding 93,169,945 104,063,027
============= =============
See accompanying notes to financial statements.
F-3
Atlantic Wine Agencies, Inc.
and Subsidiaries
Consolidated Statement of Stockholders' Equity
March 31, 2005
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
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)
Transfer of 39,960,000 shares by
controlling shareholder to employ-
ees. See Note G to Financial State-
ments 999,000 999,000
Net loss for the one month ended
March 31, 2004 (1,021,322) $ 967 (1,020,355)
------------ ------------ ------------ ------------ ------------ ------------
Balance, March 31, 2004 104,063,027 1,041 3,861,839 (1,161,322) 967 2,702,525
Cancellation of shares (20,000,000) 200
Issuance of common stock for
contract settlement @ $0.50
per share 500,000 5 249,995 250,000
Issuance of common stock in
connection with employment
contract @ $0.50 per share 135,000 1 67,499 67,500
Issuance of common stock in
connection with vineyard
contract 140,000 2 69,998 70,000
Net loss for the year ended
March 31, 2005 (1,651,244) (216,013) (1,867,257)
------------ ------------ ------------ ------------ ------------ ------------
Balance, March 31, 2005 84,838,027 $ 849 $ 4,249,531 $ (2,812,566) $ (215,046) 1,222,768
============ ============ ============ ============ ============ ============
See accompanying notes to financial statements.
F-4
Atlantic Wine Agencies, Inc.
and Subsidiaries
Consolidated Statements of Cash Flows
For the Year March 1, 2004
Ended March 31, Inception
2005 to March 31, 2004
---------------- -----------------
Cash Flows From Operating Activities
Net loss $(1,651,244) $(1,161,322)
Adjustments to reconcile net loss to
cash flows used in operating activities:
Stock based compensation 387,500 1,139,000
Depreciation and amortization 52,504 1,716
Increase in accounts receivable (21,204) (15,851)
Increase in inventory (1,316,399) (227,058)
Receivable from officer (48,761)
Increase in prepaid expenses and other (43,960)
Increase in accrued payroll taxes 65,181
Increase in accounts payable 99,613
Increase in accrued expenses 99,075 16,445
------------ ------------
Net Cash Flows Used in Operating Activities (2,377,695) (247,070)
------------ ------------
Cash Flows From Investing Activities
Cash paid for property and equipment (330,850) (2,471,140)
Cash paid for trademarks (48,532)
------------ ------------
Net Cash Flows Used in Operating Activities (330,850) (2,519,672)
------------ ------------
Cash Flows From Financing Activities
Loan from principal stockholder 2,566,287 154,982
Loan from Dominion Estates Pty Ltd 344,381
Capital contributions 2,723,879
------------ ------------
Cash Flows Provided by Financing Activities 2,910,668 2,878,861
------------ ------------
Effect of Exchange Rate Changes on Cash (217,722) 967
------------ ------------
(Decrease) increase in cash (15,599) 113,086
Cash, Beginning of Period 113,086
------------ ------------
Cash, End of Period $ 97,487 $ 113,086
============ ============
Supplemental Cash Flow Information:
Cash Paid for Interest $ 4,808 $ 8
============ ============
See accompanying notes to financial statements.
F-5
Atlantic Wine Agencies, Inc.
and Subsidiaries
Notes to Consolidated Financial Statements
March 31, 2005
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Atlantic Wine Agencies, Inc., formerly New England Acquisitions,
Inc., (the Company), was organized under the laws of the State of
Florida. On May 4, 2005, the Company acquired New Heights 560
Holdings, LLC, (New Heights) a Cayman Island Limited Liability
Company which owns two subsidiaries in South Africa and has a world
class vineyard producing high quality wines to be marketed
principally in Europe. New Heights had no operations prior to March
1, 2005.
Reverse Merger
On May 4, 2004, the stockholders of New Heights 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 controlled 99% of the outstanding
common stock of the Company. In this connection, New Heights became
a wholly owned subsidiary of Atlantic Wine Agencies, Inc. and its
officers and directors replaced New Heights' 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 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 $2,812,566 since
inception. 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
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.
and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
March 31, 2005
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 product is
shipped.
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.
and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
March 31, 2005
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.
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.
and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
March 31, 2005
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 March 31, 2005, these
differences resulted in a deferred tax asset of approximately
$660,000. 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 March 31, 2005.
The Company's net operating loss carry forwards amounted to
$2,206,000 which are principally international losses which have no
expiration date.
NOTE B RECEIVABLE FROM OFFICER
At March 31, 2005, the Company had advanced $48,761 to the president
which was repaid in July 2005.
NOTE C INVENTORY
Inventory consists of the following at March 31,
2005 2004
---- ----
Raw Materials $ 132,879
Work in process 764,759 $ 152,270
Bottled wine 645,819 74,788
---------- ----------
$1,543,457 $ 227,058
========== ==========
F-9
Atlantic Wine Agencies, Inc.
and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
March 31, 2005
NOTE D PROPERTY AND EQUIPMENT
Property and equipment at March 31, 2005 is as follows:
2005 2004 Useful Life
---------- ----------- --------------
Land and buildings $2,303,542 $2,129,392 5 years
Vineyards 208,220 302,161 40 years
Furniture, fixtures and equipment 287,487 39,587 3 to 10 years
---------- ----------
2,799,249 2,471,140
Less: accumulated depreciation 41,249 1,311
---------- ----------
$2,758,000 $2,469,829
========== ==========
NOTE E LOAN FROM PRINCIPAL STOCKHOLDER
At March 31, 2005, the principal stockholder advanced the company,
$2,721,269 for working capital. The loan is non- interest bearing
and has no stated maturity date.
NOTE F STOCKHOLDERS' EQUITY
On February 14, 2005, the Company entered into a consulting
agreement with Benjamin Mauerberger, whose brother Adam Mauerberger,
the President of the Company, 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, 2005, the
Company filed a registration statement with the Securities and
Exchange Commission to register these shares on Form S-8.
Accordingly, stock based compensation in the amount of $140,000 was
recognized during the year ended March 31, 2004.
In connection with the acquisition of Dominion Wines Pty, Ltd See
Note H to the financial statements, 500,000 shares of the Company's
common stock were issued and will not be returned. Accordingly,
stock based compensation has been recorded in the amount of
$250,000.
In connection with employment contracts, the Company issued 135,000
shares of its common stock valued at $0.50 per share. Accordingly,
stock based compensation in the amount of $67,500 has been recorded.
In connection with a vineyard contract, the Company issued 140,000
shares of its common stock valued at $0.50 per share. Accordingly,
stock based compensation in the amount of $70,000 has been recorded.
NOTE G EMPLOYMENT CONTRACTS
The Company has executed 5 year employment contracts with key
employees with annual salary commitments ranging from $184,000 in
the first year with annual escalation increasing salary commitments
to $274,000 in year five. In addition, the controlling stockholders
gave 24,960,000 shares from their holdings to one employee and
15,000,000 shares to another. Accordingly, stock based compensation
in the amount of $999,000 based upon a per share valuation of $0.025
per share, was recorded in the financial statements.
F-10
Atlantic Wine Agencies, Inc.
and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
March 31, 2005
NOTE H TRANSACTIONS WITH DOMINION WINES PTY, LTD AND DOMINION ESTATES PTY,
LTD
On September 14, 2004, the Company entered into an agreement to
acquire two Australian companies - Dominion Wines, Pty Ltd and
Dominion Estates, Pty Ltd (hereafter referred to as "Dominion"). The
terms of the agreement were as follows: (1) the issuance of
20,000,000 shares of the Company's common stock, (2) retire the
National Australian Bank loan in the amount of $2,508,962 (Aus
$3,136,202) (3) arrange for an additional investment of $179,037
(Aus $223,797) and (4) assume the Commonwealth Bank of Australia
loan in the amount of $3,265,109 (Aus $4,081,387).
Subsequent to December 31, 2004, the Company determined that such
acquisition was not in its best interest and agreed with Dominion to
unwind the transaction. During this period, Dominion borrowed
approximately $3,000,000 from General Electric Credit Australia to
replace the Commonwealth Bank of Australia loan and lent $344,381 to
a subsidiary of the Company.
The agreement to unwind the acquisition requires (1) the return of
the 20,000,000 shares of Company common stock which is currently
held in escrow, (2) the signing of a novation agreement to forgive
the $344,381 note payable by the company's Subsidiary to Dominion,
and (3) the issuance of a note to the Company's principal
shareholder in the amount of $2,560,000 (Aus $3,200,000) for the
retirement of the National Australian Bank loan.
At the date of this report, the transaction has been agreed to by
the shareholders and management of each company, and is awaiting the
securitization of property as collateral for the note agreement to
the Company's principal shareholder. Management believes that the
transaction will be successfully unwound and accordingly, the
assets, liabilities and results of operations for the year ended
March 31, 2005 of Dominion have not been included in these
consolidated financial statements.
F-11
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
For the fiscal year ended March 31, 2005, our accountants were Meyler & Company,
LLC, independent certified public accountants. At no time has there been any
disagreement with either such accountants regarding any matter of accounting
principals or practices, financial statement disclosure, or auditing scope or
procedure.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT
OFFICERS AND DIRECTORS
Messrs. Adam Mauerberger and Andrew Bayley are the directors of the Company. The
Company's directors are elected at each Annual Meeting of Shareholders. The
directors currently serving on the Company's Board and the executive officers
are set forth in the table below:
Name Age Positions and Offices With The Company
------- ----- ---------------------------------------
Adam Mauerberger 35 Chairman; Chief Executive Officer;
President; Chief Financial Officer
Andrew Bayley 36 Director; Senior Vice President of Sales and Manufacturing
Christopher Burr 55 Executive Consultant to Atlantic Wine Agencies Ltd
No director holds any directorship in a company with a class of securities
registered pursuant to Section 12 of the Securities Exchange Act of 1934 or
subject to the requirements of Section 15(d) of such Act. No director holds any
directorship in a company registered as an investment company under the
Investment Company Act of 1940.
As the Board of Directors only has one director and the Company one employee, no
Audit or Strategy Committee has been established. The Company does not have a
standing nominating committee or any committee performing a similar function.
For the above reasons, the Company has not adopted a code of ethics.
On March 18, 2005, Mr. Harry Chauhan resigned as a member of the Board of
Directors and in the capacity of Chief Financial Officer for personal reasons
and to pursue other business interests.
On March 22, 2005, Mr. Carl Voss resigned as a member of the Company's Board of
Directors citing his disagreement with the current policies, procedures and
direction of the Company. The Company disputed Mr. Voss' allegations and is
presently undergoing an investigation into the conduct of the management of the
Dominion Entities.
The following is a biographical summary of the directors and officers of the
Company:
Adam Mauerberger
On March 1, 2004 , the Company's wholly-owned subsidiary, Atlantic Wine Agencies
Limited, contract with Mr. Adam Mauerberger as its CEO and acting sales and
marketing manager director. On July 26, 2004, Mr. Mauerberger was elected to the
Company's board of directors and he assumed the title of President of the
Company at that time. Upon Mr. Harry Chauhan's resignation, Mr. Mauerberger
assumed the title of Chief Financial Officer as well.
Adam was responsible for the development and management of Zachys Wine Merchants
Limited, an exclusive premium wine dealer based in London. He also managed the
launch and management of the Mayfair fine wine format for Majestic Wines
Limited. He was responsible for driving the development of several prestige
agency brands including Bollinger, Rustenburg and Southcorp brands. Adam was
also key in the development of premium wine agencies for London and the South
East under BRL Hardy and Constellation Wines.
Andrew Bayley
On October 26, 2004, the Company's shareholder's elected Mr. Bayley to the
Company's board of directors. Also, on that date, Mr. Bayley was appointed as
the Company's Senior Vice President of Sales and Marketing.
Andy joins the Company from Les Grands Chais de France where he was the Business
Manager, responsible for the development of GCF UK business and brands within
the UK Off Trade sector for major accounts including Booker, Majestic Wine,
Sainsburys and Waitrose.
Prior to Les Grands Chais de France, Andy worked for Seagram UK covering the
complete wine and spirit portfolio for key national wholesale accounts. His wine
'apprenticeship' was at Majestic Wine, where he was responsible for their
successful new store opening in Mayfair.
While working as Business manager for Les Grands Chais de France he was
instrumental in increasing JP Chenet (the company's major wine brand) to almost
10 million bottles in less than three years. He also created and implemented key
strategy in the wholesale sector resulting in a significant increase in sales of
the 25cl single serve format.
In addition Andy also brings to the Company extensive firsthand experience from
the wine regions in France, Italy, Spain and California.
Christopher Burr
On February 15, 2004, the Company's wholly owned subsidiary, Atlantic Wine
Agencies Limited, contracted with Mr. Christopher Burr, a leading international
figure in the industry. Mr. Burr has worked in a number of senior positions as
European Director of Bass Brewers, then Managing Director of two fine wine
shipping businesses. Christopher reached the pinnacle of the industry, when he
was appointed as International Head of Wine at Christies, the traditional
auction house, overseeing sales in London, New York, Los Angeles, Tokyo and
other worldwide sales centres.
Whilst rising to the top of his profession, Christopher became a Master of Wine,
won the Villa Maria prize for his papers on viticulture had his opinions on wine
and the industry published regularly around the world and has hosted some of the
world's most prestigious tastings.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Not applicable.
ITEM 10. EXECUTIVE COMPENSATION
The table below sets forth all annual and long-term compensation paid by the
Company through the latest practicable date to the Chief Executive Officer of
the Company and to all executive officers of the Company who received total
annual salary and bonus in excess of $100,000 for services rendered in all
capacities to the Company and its subsidiaries during the fiscal year ended
March 31, 2005.
The following table sets forth information concerning all remuneration paid by
the Company as of March 31, 2005 to the Company's Directors and Executive
Officers. All of the following dollar denominations are adjusted from United
Kingdom Pounds at a rate of 1.77 USD per Pound.
Summary Compensation Table
Long-Term
Compensation
Awards
------
Securities
Underlying
Option (#) All Other
Name and Principal Position Year Salary Bonus /SARS Compensation
--------------------------- ---- ------ ----- ----- ------------
Adam Mauerberger - CEO, President 2003 95,580* 0 0 0
and CFO 2004 95,580
Andy Bayley - Sr. V.P. of Sales and
Marketing 2004 88,500**
Christopher Burr - Consultant to 4,049****
subsidiary 2003 24,049 0 0 0
2004 24,049 0 0 0
* Mr. Mauerberger's contract is for a period of 5 years with an annual salary of
$95,580 in year one (fiscal 2003) and escalating to $168,073 in year five
(fiscal 2007). In addition to his annual salary, Mr. Mauerberger has the right
to receive $2,200 in additional benefits and reimbursement of approved expenses
up to a maximum of $14,720 per month. The employment agreement may be terminated
for "cause".
**Mr. Bayley's contract if for a period of 5 years with an annual salary of
$88,500 in year one (fiscal 2004) and escalating to $106,200 in year five
(fiscal 2008). In addition to his annual salary, Mr. Bayley received 100,000
shares of the Company's common stock and has the right to receive $50,000 of
stock each year for the remaining 4 years as well as an automobile leased by the
Company. The employment agreement may be terminated for "cause".
****Mr. Burr's contract is for a renewable one year term with an annual salary
of approximately $50,000. He also has been granted an option to purchase the
Company's products at terms to be mutually agreed upon at the time Mr. Burr
exercises such right.
Directors' Compensation
During the fiscal year ended March 31, 2005 no fees were paid to our Directors.
Employment Contracts
See footnote to the compensation table immediately above for the material terms
of our officers employment/consulting agreements with the Company.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners
The following table sets forth information regarding the beneficial ownership of
the shares of the Common Stock (the only class of shares previously issued by
the Company) at August 16, 2005, by (i) each person known by the Company to be
the beneficial owner of more than five percent (5%) of the Company's outstanding
shares of Common Stock, (ii) each director of the Company, (iii) the executive
officers of the Company, and (iv) by all directors and executive officers of the
Company as a group. Each person named in the table, has sole voting and
investment power with respect to all shares shown as beneficially owned by such
person and can be contacted at the address of the Company.
Title of Class Name of Beneficial Owner Shares of Common Stock Percent of Class
-------------- ------------------------ ---------------------- ----------------
Common Willowcreek International Ltd 20,000,000 23.81%
Goodman's Bay Corporation Ctr
West Bay Street
Nassau, Bahamas
Common Adam Mauerberger(1) 19,960,000 23.76%
Common Crayson Properties Ltd 9,332,824 11.11%
Akara Bldg
24 De Castro Street
Wickams Cay, Road Town
Tortola, BVI
Common Andy Bayley 100,000 .12%
Directors and Officers
as a group 20,060,000 23.88%
(1)Mr. Mauerberger is the sole shareholder of Fairhurst Properties S A. Akara
Bldg 24 De Castro Street Wickams Cay, Road Town, Tortola BVI.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS
The Company's CEO Adam Mauerberger is brother to Benjamin Mauerberger, a
consultant to the Company. However, they do not reside at the same address and
do not have any agreement between them regarding the respective shares
controlled by them.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Exhibit Number Exhibit Description
21.1 Subsidiaries of the Company
23.1 Consent of Independent Certified Public Accountant
31.1 Section 302 Certification
32.1 Section 906 Certification
(b) Reports on Form 8-K.
On January 21, 2005 the Company filed an amended Form 8-K with the Securities
and Exchange Commission with respect to its merger with New Heights 560 Holdings
LLC.
On March 21, 2005 the Company filed an 8-K disclosing that Harry Chauhan had
resigned as a member of the Board of Directors and in the capacity of Chief
Financial Officer of Atlantic Wine Agencies, Inc. The Company and Mr. Chauhan
mutually agreed that Mr. Chauhan should resign for personal reasons and to
pursue other business interests.
On March 23, 2005 the Company filed and 8-K disclosing that Carl Voss resigned
as a member of the Board of Directors of the Company. Mr. Voss cited his
disagreement with the current policies of the Board of Directors, procedures and
direction of the Company as his reasons for his resignation. The Company
strenuously disputed each and every allegation of Mr. Voss as set forth in his
letter of resignation and it retained local Australian counsel and accountants
to investigate the conduct of the management of its Australian subsidiaries
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
For the Company's fiscal year ended March 31, 2005, the estimated cost for
professional services rendered for the audit of our financial statements and the
review of the Form 10-KSB is approximately $15,000 to $20,000. We were billed
approximately $15,000 for professional services rendered for the review of
financial statements included in our periodic and other reports filed with the
Securities and Exchange Commission for our year ended March 31, 2004.
Tax Fees
For the Company's fiscal year ended March 31, 2005, the estimated cost for
professional services rendered for tax compliance, tax advice, and tax planning
is approximately $3,500.
All Other Fees
The Company incurred fees equal to approximately: (i) $20,000 related to travel
expenses and audit services with the Dominion Entities the fiscal year ended
March 31, 2005; (ii)$13,500 for the audit related to the merger of the Company
with New Heights 560 Holdings, LLC and (iii) $15,000 for the three quarterly
reports on Form 10-QSB.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
ATLANTIC WINE AGENCIES INC.
/s/ Adam Mauerberger
Name: Adam Mauerberger
Title: Chairman of the Board, Chief Executive Officer,
President, Chief Financial Officer and Secretary
Date: August 16, 2005
/s/ Andrew Bayley
Name: Andrew Bayley
Title: Director, Senior Vice President of Sales and Marketing
Date: August 16, 2005