The accompanying notes are an integral part of these financial statements.
ANGLESEA ENTERPRISES, INC.
(A Development Stage Company)
Notes to Financial Statements
For the Six Months ended March 31, 2014 and 2013
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
The financial statements presented are those of Anglesea Enterprises, Inc. The Company was originally incorporated under the laws of the state of Nevada on February 8, 2011. The Company has not commenced significant operations and, in accordance with ASC Topic 915, is considered a development stage company. Anglesea Enterprises, Inc. offers internet and web-related services to small businesses including website development, creative writing and design, and marketing analysis. The Company provides Internet solutions to small businesses that are looking to expand their existing marketing efforts to reach a larger audience via the World Wide Web. Management has experience in marketing, commercial website development and business-to-business sales.
The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, the accompanying financial statements include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Actual results and outcomes may differ from managements estimates and assumptions.
Interim results are not necessarily indicative of results for a full year. Our financial statements as of and for the six months ended March 31, 2014 are considered unaudited. Operating results for the six month period ended March 31, 2014 are not necessarily indicative of the results that may be expected for the year ending September 30, 2014. The financial statements should be read in conjunction with the financial statements from our September 30, 2013 audited financial statements.
The basis is accounting principles generally accepted in the United States of America. The Company has adopted a September 30th year end.
Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. As at March 31, 2014 and March 31, 2013 the Company had no cash equivalents.
Revenue is recognized in accordance with the criteria established in the accounting literature regarding recognition of revenues, specifically, FASB Accounting Standards Codification topic 605, Revenue Recognition. The Company will recognize revenue for its design and development services as the projects are completed. Revenue from other services provided such as website hosting and maintenance, creative design updates and marketing analysis will be recognized as billed on a monthly basis.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Basic (Loss) per Common Share
Basic (loss) per share is calculated by dividing the Company's net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company's net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of March 31, 2014.
Fair value of financial instruments
The carrying amounts of financial instruments including cash approximate their fair value because of their short term maturities. The Company does not hold any investments that are available-for-sale.
Recent Accounting Pronouncements
The company has evaluated all the recent accounting pronouncements and believes that none of them will have a material effect on the companys financial statements.
These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. During the period from inception through March 31, 2014, the Company recognized no sales revenue and incurred a net loss of $111,167. As of March 31, 2014, the Company had an accumulated deficit of $111,167. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's future business. Additionally the Company is actively seeking strategic alliances in order to accelerate its growth in the industry. These factors raise substantial doubt regarding the Companys ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
The stockholders' equity section of the Company contains the following classes of
Capital stock as of March 31, 2014, respectively:
Preferred stock, $0.00001 par value, 20,000,000 shares authorized 0 shares issued and outstanding.
Common Stock, $0.00001 par value, 250,000,000 shares authorized 66,033,000 shares issued and outstanding.
On February 8, 2011, the Company entered into an agreement with one of its founders for the sale of 60,000,000 shares of common stock at a price of $0.0000003 per share. The Company realized $180 from this subscription and $420 was realized towards the services rendered to the Company by the founding member.
On February 10, 2011, the Company entered into an agreement with one investor for the sale of 6,000,000 shares of common stock at a price of $0.01 per share. The Company realized $60,000 from these subscriptions.
In June 2011, the Company entered into an agreement for the sale of 33,000 shares at a price of $0.01 per share to 33 different investors. The Company realized $330 from these subscriptions.
At March 31, 2014 and September 30, 2013 the Company owed $41,498 and $34,300 as loans to a less than 5% shareholder. The notes have no definitive payment terms and bear no interest. The Company will pay the balance off when it has the available funds.
Management has evaluated all activity since March 31, 2014, through the date the financial statements were issued and has concluded that no subsequent events have occurred that would require recognition in the Financial Statements or disclosure in the Notes to the Financial Statements.
ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.
Anglesea Enterprises Inc. (the Company or Anglesea) was formed on February 8, 2011 in the State of Nevada. We are a development stage company with no revenues and net losses to date. We plan to provide marketing and web-related services to small businesses including website development and design, creative writing and graphics, virtual tours, audio/visual services, marketing analysis and search engine optimization. We also plan to provide economical internet-related marketing services to small businesses that are looking to expand their existing marketing efforts to reach a larger audience via their website.
Accordingly, you cannot fully evaluate our business, and therefore our future prospects, due to a lack of operating history and revenues. To date, our business development activities have consisted solely of developing our own website and preliminary discussions of our planned service offering with prospective customers strategic partners who offer such services. In addition, there is no guarantee that we will be able to expand our business development efforts and establish revenue and profit generating operations. Failure to generate revenues and profit will cause us to suspend or cease operations.
The demand for web development and marketing services in the small business market continues to grow. The majority of e-commerce service providers focus on servicing large and medium-sized corporations. We are developing a business network to try to reduce project costs and afford us the opportunity to offer web development services at competitive prices. We hope to accomplish this by strategically aligning ourselves with other service providers to bundle affordable internet and business services to our customers. To date, we have not established any strategic alliances.
Limited Operating History
We are a development stage company with limited operations and no revenues to date from our business. There is limited historical financial information about us upon which to base an evaluation of our performance. There is no guarantee that we will be successful in the implementation of our business plan as described herein. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns, such as increases in advertising and marketing costs, increases in administration expenditures associated with daily operations, increases in accounting and audit fees, increases in legal fees related to filings and regulatory compliance.
Our auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an ongoing business for the next twelve months. The financial statements do not include any adjustments that might result from the uncertainty about our ability to continue in business. As such, we may have to cease operations and you could lose your investment.
We anticipate relying on equity sales of our common stock in order to continue to fund implementation of our business plan. There is no assurance that we will achieve any of additional sales of our equity securities or arrange for debt or other financing to fund our planned business activities. We may also rely on loans from our shareholders; however, there are no assurances that our shareholders will provide us with any additional funds. Currently, we do not have any arrangements for additional financing. We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop, or expand our operations. Equity financing could result in additional dilution to existing shareholders.
PLAN OF OPERATION
We have begun limited operations toward developing our business plan and beginning to market our website development and internet marketing-related services to small businesses by networking with professionals in the business community such as attorneys and accountants to establish our referral source network. All business functions are coordinated and managed by our Chief Executive Officer and President, Mr. James Christie.
Results of Operations
For the period from inception (February 8, 2011) through March 31, 2014, the registrant has been in the development stage and has had no revenue.
For the three months ended March 31, 2014, we paid professional fees of $3,873 and general and administrative expenses of $574. As a result, we had a net loss of $4,447 for the three months ended March 31, 2014.
Comparatively, for the three months ended March 31, 2013, we paid professional fees of $7,984 and general and administrative expenses of $357. As a result, we had a net loss of $8,341 for the three months ended March 31, 2013.
The $3,894 difference in net loss between the three months ended March 31, 2014 and 2013 is a result of increased professional fees accrued during the three months ended March 31, 2013 as we were pursuing strategic alliance possibilities with outside companies. These pursuits ultimately did not result in an alliance.
For the six months ended March 31, 2014, we paid professional fees of $13,755 and general and administrative expenses of $643. As a result, we had a net loss of $14,398 for the six months ended March 31, 2014.
Comparatively, for the six months ended March 31, 2013, we paid professional fees of $12,984 and general and administrative expenses of $1,133. As a result, we had a net loss of $14,117.
The $281 difference in net loss between the six months ended March 31, 2014 is a result of increased professional fees during the six months ended March 31, 2014 and increased general and administrative expenses during the six months ended March 31, 2013. These two increases balanced each other out to result in a relatively small increase in net loss during the six months ended March 31, 2014.
As of the date of this filing, we have one employee. We intend to hire more personnel once we have sufficient operations.
As reflected in the accompanying financial statements, we have a deficit accumulated during the development stage of $111,167 and no revenues to date. We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. This raises substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to raise additional capital and implement our business plan. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
Management believes that actions presently being taken to obtain additional capital and implement our business plan provide for us the opportunity to continue as a going concern. However, there can be no assurance that we will be successful in implementing our business plan to generate revenue and net profits, and there can be no assurance that we will be successful in obtaining additional capital to fund ongoing operations.
Liquidity and Capital Resources
As of December 31, 2013 we had $0 in cash on hand. Based on our cash position, we believe we do not have enough cash to support minimal daily operations while we are attempting to commence operations and produce revenues. We estimate the Company requires at minimum $45,000 to implement its business plans over the next twelve months. We will need to spend approximately $20,000 to meet our obligations as a limited reporting company over the next twelve months. In addition, we anticipate we will need $25,000 to cover minimal marketing expenses and operational costs to achieve revenues. The Company estimates it will commence generating sales revenues from our new marketing and sales programs within the next twelve months. We may be unable to successfully implement our business plan to generate revenues.
We are a development stage company with limited operations and no revenues and net losses to date from our business. To meet our needs for cash required for the long-term implementation of our business plan we will need to generate sufficient revenues and net profit to continue our operations or require additional capital. If we are unable to generate revenues for any reason, or if we are unable to make a reasonable profit, we may have to cease operations. At the present time, we have not made any arrangements to raise additional cash. If we need additional cash and cannot raise it through equity financings, we may ask our existing shareholders to invest additional capital into the Company. There can be no assurance that our existing shareholders will provide us with additional capital. If we are unable to raise sufficient capital we may have to either, suspend implementation of our business plan until we are able to raise capital, or cease operations entirely if revenue from operations will not be sufficient to cover our operating costs. We believe we can implement our business plan and achieve profitable operations, however, we cannot guarantee that our operations and proceeds from any capital raise will be sufficient for us to continue as going concern.
Cash Flows from Operating Activities
For the six months ended March 31, 2014, we had a net loss of $14,398. We had an increase in accounts payable and accrued expenses of $7,148. As a result, we had net cash used in operating activities of $7,250 for the six months ended March 31, 2014.
For the six months ended March 31, 2013, we had a net loss of $14,117. We had a decrease in accounts payable and accrued expenses of $8,461. As a result, we had net cash used in operating activities of $22,578 for the six months ended March 31, 2013.
Cash Flows from Investing Activities
The Company had no cash used in or provided by investing activities for the period from inception (February 8, 2011) through March 31, 2014.
Cash Flow from Financing Activities
For the six months ended March 31, 2014, we received proceeds from loans of $7,198. As a result, we had net cash provided by financing activities of $7,198 for the six months ended March 31, 2014.
For the six months ended March 31, 2013, we received proceeds from loans of $20,950. As a result, we had net cash provided by financing activities of $20,950 for the six months ended March 31, 2013.
We estimate the Company needs, at minimum, $45,000 to implement its business plan over the next twelve months. The majority shareholder has committed to cover any cash shortfalls of the Company, although there is no written agreement or guarantee. If we are unable to satisfy our cash requirements we may be unable to proceed with the registration statement and our plan of operations.
The foregoing represents our best estimate of our cash needs based on current planning and business conditions. In the event we are not successful in reaching our initial revenue targets, additional funds may be required, and we may not be able to proceed with our business plan for the development and marketing of our services. We expect to keep operating costs to a minimum until cash is available through operating activities or financing. We plan to continue to seek, in addition to equity financing, other sources of debt financing on favorable terms; however, there can be no assurances that any such financing can be obtained on favorable terms, if at all. If we are unable to generate profits sufficient to cover our operating costs or unable to obtain additional capital for our working capital needs, we may need to curtail, suspend or cease operations. Furthermore, there is no assurance that the net proceeds from any successful financing arrangement will be sufficient to cover unforeseen cash requirements during the initial stages of operations.
We do not anticipate the purchase or sale of any significant equipment. We also do not expect any significant additions to the number of employees.
Critical Accounting Policies and Estimates
Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States. GAAP requires the use of estimates, assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates
on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.
Our significant accounting policies are summarized in Note 1 of our financial statements. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our results of operations, financial position or liquidity for the periods presented in this report.
Section 187 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(8) of the Security Act for complying with new or revised accounting standards. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as special purpose entities.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable for smaller reporting companies.
Item 4. Controls and Procedures
During the period ended March 31, 2014, there were no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our chief executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of March 31, 2014. Based on this evaluation, our chief executive officer and principal financial officers have concluded such controls and procedures to be effective as of March 31, 2014 to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Commissions rules and forms and to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuers management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Item 1A. Risk Factors
Not applicable for smaller reporting companies
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
Exhibit 31* - Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32* - Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS** XBRL Instance Document
101.SCH** XBRL Taxonomy Extension Schema Document
101.CAL** XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF** XBRL Taxonomy Extension Definition Linkbase Document
101.LAB** XBRL Taxonomy Extension Label Linkbase Document
101.PRE** XBRL Taxonomy Extension Presentation Linkbase Document
* Filed herewith
**XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: May 20, 2014
Anglesea Enterprises, Inc.
Chief Executive Officer
Principal Financial Officer