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[May 20, 2014]
ANGLESEA ENTERPRISES, INC. - 10-Q - Management's Discussion and Analysis of Financial Condition and Results of Operations.
(Edgar Glimpses Via Acquire Media NewsEdge) 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.
Executive Summary 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.
9 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.
10 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.
Going Concern 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.
11 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.
12 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 13 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.
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