UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D. C. 20549

FORM 10-QSB

QUARTERLY REPORT UNDER SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2007
Commission file number 333-63432

Atlantic Wine Agencies Inc.
(Exact name of small business issuer as specified in its charter)
 
Florida
65-1102237
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
 
Mount Rosier Estate (Pty) Ltd.
Farm 25 A-Sir Lowry’s Pass Village
Somerset West, 7129
South Africa
(Address of principal executive offices) (Zip Code)

Issuer's telephone number: 011.27.218.581130
(Issuer's telephone number)
 
Check whether the issuer (1) has 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 o
 
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date.
 
The number of shares of outstanding common stock of Atlantic Wine Agencies, Inc. (the “Company”), which is the only class of its common equity, on August 14, 2007, was 86,323,880.
 
 
 
 
 
Item 1. Financial Statements

Description
  
Page No.
  
         
FINANCIAL INFORMATION:
        
         
Financial Statements
        
         
Consolidated Balance Sheets at June 30, 2007 (unaudited) and March 31, 2007 (audited)
    
3
 
         
Consolidated Statement of Operations for the Three Months Ended June 30, 2007 and 2006 respectively (Unaudited)
   
4
  
         
Consolidated Statements of Cash Flows for the Three Months Ended June 30, 2007 and 2006 respectively (Unaudited)
   
5
  
         
Notes to Consolidated Financial Statements (Unaudited)
    
6
  

 
2
 

ATLANTIC WINE AGENCIES, INC. and SUBSIDIARIES
(Formerly New England Acquisitions, Inc.)

CONSOLIDATED BALANCE SHEETS

   
June 30,
 
March 31,
 
 
 
2007
 
2007
 
 
 
(Unaudited)
 
(Audited)
  
CURRENT ASSETS
          
Cash
      
$
341
  
Accounts receivable
  
$
35,874
    
37,875
  
Inventory
    
140,719
    
144,480
  
Prepaid expenses and other
            
13
  
Total Current Assets
    
176,593
    
182,709
  
               
OTHER ASSETS
              
Property, plant and equipment, net
    
2,511,257
    
2,437,488
  
Trademark
    
1,242
    
1,207
  
Total Assets
  
$
2,689,092
  
$
2,621,404
  
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
              
               
CURRENT LIABILITIES
              
Bank overdraft
  
$
433,458
  
$
158,967
  
Loans from principal shareholders
    
1,259,863
    
1,259,863
  
Accounts payable
    
166,197
    
208,669
  
Accrued expenses
    
278,763
    
332,618
  
Loan payable to principal officer
    
135,320
    
135,320
  
Total Current Liabilities
    
2,273,601
    
2,095,437
  
               
STOCKHOLDERS’ EQUITY
              
Common stock authorized 150,000,000
              
shares; $0.00001 par value; issued
              
and outstanding 86,323,880 shares
    
868
    
868
  
Additional contributed capital
    
7,829,536
    
7,829,536
  
Accumulated deficit
    
(7,915,052
)
  
(7,749,230
)
Accumulated other comprehensive income
    
500,139
    
444,793
  
Total Stockholders’ Equity
    
415,491
    
525,967
  
               
   
$
2,689,092
  
$
2,621,404
  
 
See accompanying notes to financial statements.
 
3
 

ATLANTIC WINE AGENCIES, INC. and SUBSIDIARIES
(Formerly New England Acquisitions, Inc.)

CONSOLIDATED STATEMENTS OF OPERATIONS

   
For the Three Months Ended
 
 
 
June 30,
 
 
 
2007
 
2006
 
 
 
(Unaudited)
 
(Unaudited)
  
           
NET SALES
  
$
46,020
  
$
55,959
  
               
COSTS AND EXPENSES
              
Cost of goods sold
    
20,330
    
13,820
  
Selling, general and administrative
    
157,328
    
42,185
  
Depreciation and amortization
    
32,172
    
26,086
  
Interest expense
    
4,972
    
 
 
Total Costs and Expenses
    
214,802
    
82,091
  
               
OTHER INCOME
              
Insurance claims
          
9,195
  
Other miscellaneous income
    
2,960
    
 
 
Total Other Income
    
2,960
    
9,195
  
               
NET LOSS
    
(165,822
)
  
(16,937
)
               
NET LOSS PER SHARE, basic and diluted
  
$
(0.01
)
$
(0.01
)
               
Weighted average number of common shares outstanding
    
86,323,880
    
86,323,880
  

See accompanying notes to financial statements.
 
 
4
 

ATLANTIC WINE AGENCIES, INC. and SUBSIDIARIES
(Formerly New England Acquisitions, Inc.)

CONSOLIDATED STATEMENTS OF CASH FLOWS
 
   
For the Three Months Ended
  
   
June 30,
 
 
 
2007
 
2006
 
 
 
(Unaudited)
 
(Unaudited)
  
CASH FLOWS FROM OPERATING ACTIVITIES
          
Net loss for period
  
$
(165,822
)
$
(16,937
)
Non-cash item included in net loss:
              
Depreciation and amortization
    
32,172
    
26,086
  
Changes in operating assets and liabilities:
              
Accounts receivable
    
2,001
    
206,017
  
Inventory
    
3,761
    
(309,726
)
Prepaid expense and other
    
13
    
606
  
Accounts payable
    
(42,472
)
  
12,435
  
Accrued expenses
    
(53,855
)
  
(134,415
)
Accrued payroll taxes
           
(25,207
)
Net Cash Used In Operating Activities
    
(224,202
)
  
(241,141
)
               
CASH FLOWS FROM FINANCING ACTIVITIES
              
Bank overdraft
    
274,491
        
Loan from principal shareholders
          
96,643
  
Due to factoring agent
           
(97,883
)
Net Cash Used In Financing Activities
    
274,491
    
(1,240
)
CASH FLOWS FROM INVESTING ACTIVITIES
              
Capital expenditure
    
(36,190
)
      
Disposal of fixed assets
           
191,791
  
Net Cash Provided by (Used in) Investing Activities
    
(36,190
)
  
191,791
  
               
EFFECT OF EXCHANGE RATE CHANGES ON
              
CASH
    
(14,440
)
  
3,823
  
               
NET DECREASE IN CASH
    
(341
)
  
(46,767
)
               
CASH AND CASH EQUIVALENTS AT
              
BEGINNING OF PERIOD
    
341
    
78,145
  
               
CASH AT END OF PERIOD
   $    
$
31,378
  

See accompanying notes to financial statements.
 
 
5
 

ATLANTIC WINE AGENCIES,
INC. and SUBSIDIARIES
(Formerly New England Acquisitions, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007
(Unaudited)

NOTE A - BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary in order to make the financial statements not misleading have been included. Results for the three months ended June 30, 2007 are not necessarily indicative of the results that may be expected for the year ending March 31, 2008. For further information, refer to the financial statements and footnotes thereto included in the Atlantic Wine Agencies, Inc., formerly New England Acquisitions, Inc., annual report on Form 10-KSB for the year ended March 31, 2007.

NOTE B - GOING CONCERN

As indicated in the accompanying financial statements, the Company has an Accumulated deficit of $7,915,052. 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.

NOTE C - OVERDRAFT FACILITY

On April 17, 2007, the Company entered into an additional overdraft facility arrangement with ABSA, a South African Bank for R 7,000,000 (U.S. $1,000,000). The loan is secured by the assets of the South African Winery and bears interest at the South African prime rate 12.5% per annum. The balance at June 30, 2007 is $433,458.

 
6
 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation
 
On October 13, 2006, we entered into an agreement with Auction Alliance, a South African auction firm, to sell our Myrtle Grove Property and Estates, subject to the minimum reserve being met. Assets including land, vineyards, winery equipment and stock were included in the auction sale. The initiation of the auction process resulted from the conclusions that (i) after expending considerable resources and efforts in developing our business and building world class wine brands from South Africa, significantly more capital is necessary to further grow the business which are unable to procure on commercially acceptable terms, (ii) The ZAR (South African Rand) has shown considerable volatility related to uncertainty regarding future political situation and (iii) the best time to maximize our South African property and operations is by selling through the public auction process locally in South Africa prior to the growing season in the southern hemisphere. We failed to agree to the terms to sell our assets in the auction process and thus continue operating our winery business. However, we will continue to seek alternative business operations and any transaction that would involve the sale of most or all of our assets. When the sale has been completed, we will seek to use the proceeds from such sale, after satisfying our current liabilities, to develop or acquire a business or businesses which we believe will best serve the long term interests of our shareholders. Such businesses may or may not be related to the wine industry. 
 
RESULTS OF OPERATIONS
 
Operating costs for the three-months ended June 30, 2007 aggregated $214,802 or ($0.01) per share as compared to $82,091 or ($0.01) per share for the year ended June 30, 2006.
 
LIQUIDITY AND CAPITAL RESOURCES
 
For the three-months ended June 30, 2007 net cash used to fund operating activities aggregated ($224,202), net cash utilized by investing activities aggregated ($36,190) and net cash provided by financing activities aggregated $274,491.
 
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
 
The Company's discussion and analysis of its financial condition and results of operations are based upon 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.
 
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation 48, “Accounting for Income Tax Uncertainties” (“FIN 48”). FIN 48 defines the threshold for recognizing the benefits of tax return positions in the financial statements as “more-likely-than-not” to be sustained by the taxing authority. Recently issued literature also provides guidance on the derecognition, measurement and classification of income tax uncertainties, along with any related interest and penalties. FIN 48 also includes guidance concerning accounting for income tax uncertainties in interim periods and increases the level of disclosures associated with any recorded income tax uncertainties. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company expects to adopt the provisions of FIN 48 beginning in the first quarter of 2007. The Company is currently in the process of determining the impact, if any, of adopting the provisions of FIN 48 on its financial position, results of operations and liquidity.
 
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which defines fair value, establishes a framework for measuring fair value under other accounting pronouncements that permit or require fair value measurements, changes the methods used to measure fair value and expands disclosures about fair value measurements. In particular, disclosures are required to provide information on the extent to which fair value is used to measure assets and liabilities; the inputs used to develop measurements; and the effect of certain of the measurements on earnings (or changes in net assets).
 
 
7
 
 
SFAS No. 157 is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Early adoption, as of the beginning of an entity’s fiscal year, is also permitted, provided interim financial statements have not yet been issued. The Company is currently evaluating the potential impact, if any, that the adoption of SFAS No. 157 will have on its consolidated financial statements.
 
In September 2006, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (“SAB No. 108”). SAB No. 108 provides guidance on how prior year misstatements should be considered when quantifying misstatements in the current year financial statements. SAB No. 108 requires registrants to quantify misstatements using both a balance sheet and an income statement approach and evaluate whether either approach results in quantifying a misstatement that, when all relevant quantitative and qualitative factors are considered, is material. SAB No. 108 does not change the guidance in SAB No. 99, “Materiality,” when evaluating the materiality of misstatements. SAB No. 108 is effective for fiscal years ending after November 15, 2006. Upon initial application, SAB No. 108 permits a one-time cumulative effect adjustment to beginning retained earnings. The Company adopted SAB No. 108 for the fiscal year ended March 31, 2007. Adoption of SAB No. 108 did not have a material impact on the consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”). SFAS 159 allows entities to measure at fair value many financial instruments and certain other assets and liabilities that are not otherwise required to be measured at fair value. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The Company has not determined what impact, if any, that adoption will have on our results of operations, cash flows or financial position.
 
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.
 
Item 3. Controls and Procedures.

(a) Our principal executive officer and principal financial officer have 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
 
 
8
 
 
PART II
 
Item 1. Legal Proceedings
 
None.

Item 2. Changes in Securities
 
None

Item 3. Defaults Upon Senior Securities
 
None

Item 4. Submission of Matters to a Vote of Security Holders
 
None

Item 5. Other Information
 
None

Item 6. Exhibits and Reports on Form 8-K

a. Exhibit Index

Exhibit 99.1    Certification of President and Principal Financial Officer

Exhibit 99.2    Certification of President and Principal Financial Officer
 
b. Reports on Form 8-K
 
None.
 
 
9
 
 
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.
 
ATLANTIC WINE AGENCIES INC.
 
 
/s/ Adam Mauerberger
Name: Adam Mauerberger
Title: President, Chief Financial Officer and Chairman of the Board
Date: August 14, 2007

 
10