UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

X  .	Quarterly  Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended July 31, 2012
.	Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from __________  to __________
	Commission File Number:  333-147276

Axius Inc.

(Exact name of registrant as specified in its charter)

Nevada	27-3574086
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

6A Easa Al Gurg Tower, 6th Floor, Baiyas Road, P.O. Box 186549, Dubai UAE

(Address of principal executive offices)

00971 44475722

(Registrant’s telephone number)

(Former name, former address and former fiscal year, if changed since last report)

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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      .

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  X  . No      .

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

 

. Large accelerated filer	. Accelerated filer
X  . Smaller reporting company	. Non-accelerated filer

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  X  . No      .

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 58,500,000 common shares as of September 14, 2012.

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	TABLE OF CONTENTS	Page
PART I – FINANCIAL INFORMATION
Item 1:	Financial Statements	3
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	12
Item 4T:	Controls and Procedures	12
PART II – OTHER INFORMATION
Item 1:	Legal Proceedings	13
Item 1A:	Risk Factors	13
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 3:	Defaults Upon Senior Securities	13
Item 4:	Mine Safety Disclosures	13
Item 5:	Other Information	13
Item 6:	Exhibits	14

 

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PART I - FINANCIAL INFORMATION

Item 1.

Financial Statements

 

Our financial statements included in this Form 10-Q are as follows:	Page
Consolidated Balance Sheets as of July 31, 2012 and October 31, 2011 (unaudited);	4
Consolidated Statements of Operations for the three and nine months ended July 31, 2012 and 2011 and period from September 18, 2007 (Inception) to July 31, 2012 (unaudited);	5
Consolidated Statement of Stockholders’ Equity for period from September 18, 2007 (Inception) to July 31, 2012 (unaudited);	6
Consolidated Statements of Cash Flows for the nine months ended July 31, 2012 and 2011 and period from September 18, 2007 (Inception) to July 31, 2012 (unaudited);	7
Notes to Consolidated Financial Statements;	8

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q.  In the opinion of management, all adjustments considered necessary for a fair presentation have been included.  Operating results for the interim period ended July 31, 2012 are not necessarily indicative of the results that can be expected for the full year.

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AXIUS INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED BALANCE SHEETS (unaudited)

As of July 31, 2012 and October 31, 2011

		July 31,			October 31,
		2012			2011
ASSETS
Current Assets
Cash and equivalents		$	10,184		$	33,787
Inventory			31,761			45,976
Due from supplier			4,164			3,834
Prepaid expenses			8,617			3,600
Total Current Assets			54,726			87,197
Intangible Assets, net			140,003			170,003
TOTAL ASSETS		$	194,729		$	257,200
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable.		$	28,545		$	11,915
Notes payable – related party			103,284			44,575
Total Current Liabilities			131,829			56,490
Stockholders’ Equity
Common Stock, $.001 par value, 250,000,000 shares authorized, shares issued and outstanding as of: 7/31/12 58,500,000 shares and 10/31/11 55,000,000 shares			58,500			55,000
Preferred Stock, $.001 par value, 10,000,000 shares authorized, -0- shares issued and outstanding			-			-
Additional paid-in capital			961,750			895,250
Deficit accumulated during the development stage			(957,350)			(749,540)
Total stockholders’ equity			62,900			200,710
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	194,729		$	257,200

See accompanying notes to consolidated financial statements.

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AXIUS INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

Three and Nine Months Ended July 31, 2012 and 2011 and

Period from September 18, 2007 (Inception) to July 31, 2012

		Three Months Ended July 31, 2012		Three Months Ended July 31, 2011		Nine Months Ended July 31, 2012		Nine Months Ended July 31, 2011		Period From September 18, 2007 (Inception) to July 31, 2012
REVENUES	$	1,931	$	611	$	3,139	$	611	$	35,976
COST OF GOODS SOLD		386		1,006		1,354		1,006		3,259
GROSS PROFIT		1,545		(395)		1,785		(395)		32,717
EXPENSES:
Selling		9,775		7,489		32,056		8,489		86,110
Professional fees		2,138		11,604		59,963		26,794		232,261
Consulting		-		315,817		-		396,018		138,120
Salaries, wages and taxes		8,092		2,844		28,666		2,844		50,896
Amortization		10,000		-		30,000		-		59,997
General and administrative		18,433		37,842		57,503		67,988		121,563
Stock-based compensation		-		-		-		-		295,000
TOTAL EXPENSES		48,438		375,596		208,188		502,133		983,947
LOSS FROM OPERATIONS		(46,893)		(375,991)		(206,403)		(502,528)		(951,230)
OTHER EXPENSES
Foreign currency transaction adjustment		157		371		1,407		3,365		6,120
TOTAL OTHER EXPENSES		157		371		1,407		3,365		6,120
LOSS BEFORE PROVISION FOR INCOME TAXES		(47,050)		(376,362)		(207,810)		(505,893)		(957,350)
PROVISION FOR INCOME TAX		-		-		-		-		-
NET LOSS	$	(47,050)	$	(376,362)	$	(207,810)	$	(505,893)	$	(957,350)
NET LOSS PER SHARE:   BASIC AND DILUTED	$	(0.00)	$	(0.01)	$	(0.00)	$	(0.02)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED		58,500,000		43,385,625		57,606,227		28,923,910

See accompanying notes to consolidated financial statements.

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AXIUS INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (unaudited)

Period from September 18, 2007 (Inception) to July 31, 2012

												Deficit accumulated during the development
									Additional
			Common stock						paid-in
			Shares			Amount			capital			stage			Total
Inception, September 18, 2007				-		$	-		$	-		$	-		$	-
Issuance of common stock for cash				10,750,000			10,750			32,250			-			43,000
Net loss for the period ended October 31, 2007				-			-			-			(4,000)			(4,000)
Balance, October 31, 2007				10,750,000			10,750			32,250			(4,000)			39,000
Net loss for the year ended October 31, 2008				-			-			-			(45,000)			(45,000)
Balance, October 31, 2008				10,750,000			10,750			32,250			(49,000)			(6,000)
Net loss for the year ended October  31, 2009				-			-			-			(10,000)			(10,000)
Balance, October 31, 2009				10,750,000			10,750			32,250			(59,000)			(16,000)
Conversion of due to officer to contributed capital				-			-			22,250			-			22,250
Net loss for the year ended October 31, 2010				-			-			-			(61,368)			(61,368)
Balance, October 31, 2010				10,750,000			10,750			54,500			(120,368)			(55,118)
Conversion of note payable to stock				4,500,000			4,500			85,500			-			90,000
Stock issued in exchange for investment				10,000,000			10,000			190,000			-			200,000
Issuance of common stock for cash				15,000,000			15,000			285,000			-			300,000
Issuance of common stock for services				14,750,000			14,750			280,250			-			295,000
Net loss for the year ended October 31, 2011				-			-			-			(629,172)			(629,172)
Balance, October 31, 2011				55,000,000			55,000			895,250			(749,540)			200,710
Issuance of common stock for cash				3,500,000			3,500			66,500			-			70,000
Net loss for the period ended July 31, 2012				-			-			-			(207,810			(207,810
Balance, July 31, 2012				58,500,000		$	58,500		$	961,750		$	(957,350)		$	63

See accompanying notes to consolidated financial statements.

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AXIUS INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

For the nine months ended July 31, 2012 and 2011 and

Period from September 18, 2007 (Inception) to July 31, 2012

 

			Nine Months Ended July 31, 2012		Nine Months Ended July 31, 2011		Period From September 18, 2007 (Inception) to July 31, 2012
CASH FLOWS FROM  OPERATING ACTIVITIES
Net loss for the period		$	(207,810)	$	(505,893)	$	(957,350)
Change in non-cash working capital items:
Amortization			30,000		-		59,997
Stock-based compensation			-		-		295,000
Changes in assets and liabilities:
(Increase) decrease in prepaid expenses and amounts due from supplier			(5,017)		30,770		(8,617)
(Increase) decrease in inventory			14,215		(46,632)		(31,761)
(Increase) decrease due from supplier			(330)		-		(4,164)
Increase (decrease) due to officer			58,709		-		103,284
Increase (decrease) in accounts payable			16,630		17,985		28,545
NET CASH USED BY  OPERATING ACTIVITIES			(93,603)		(503,770)		(515,066)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock			70,000		565,350		393,000
Proceeds from note payable – related party			-		19,575		132,250
NET CASH PROVIDED BY FINANCING ACTIVITIES			70,000		584,925		525,250
NET INCREASE (DECREASE) IN CASH			(23,603)		81,155		10,184
Cash, beginning of period			33,787		24,949		-
Cash, end of period		$	10,184	$	106,104	$	10,184
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid		$	-	$	-	$	-
Income taxes paid		$	-	$	-	$	-
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING INFORMATION
Conversion due to officer to contributed capital		$	-	$	290,000	$	312,250

See accompanying notes to consolidated financial statements.

 

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AXIUS INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

July 31, 2012

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Axius, Inc. (“Axius” and the “Company”) is a development stage company and was incorporated in Nevada on September 18, 2007. The Company has been and remains a “shell” company as defined in SEC Release No. 33-8587 at II A3.  New management is in the process of determining the course(s) of business and/or acquisition of assets that the Company may intend to pursue. In that regard, Axius intends to link world cultures and business enterprise together under a common umbrella in Dubai, UAE; its mission being to improve business effectiveness within the Middle East and Africa region, by integrating International Business Standards to its clientele.

On Dec 13, 2010, Axius, Inc. incorporated a wholly owned subsidiary in Delaware called Dr. Jules Nabet Cosmetics, Inc.  On January 4, 2011 this subsidiary entered into a North American Distribution agreement with French Cosmetics Centre of the UK to distribute a line of skincare products under the Dr. Jules Nabet brand.  Axius, Inc’s 100% wholly owned subsidiary, Dr. Jules Nabet Cosmetics, Inc. distributes a line of 10 skin creams developed by Dr. Jules Nabet, Dr. Jules Nabet Cosmetics owns the North American rights and worldwide internet rights to these products.  On May 9, 2011, Dr. Jules Nabet Cosmetics, Inc. opened its online business.  Its website is www.drjulesnabetskincare.com.

Principles of Consolidation

The consolidated financial statements include the accounts of Axius, Inc. and its wholly owned subsidiary Dr. Jules Nabet Cosmetics, Inc.  All significant intercompany balances and transactions have been eliminated.

Development Stage Company

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles related to development-stage companies.  A development-stage company is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenues there from.

Basis of Presentation

The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Form 10-K filed with the SEC as of and for the period ended October 31, 2011.  In the opinion of management, all adjustments necessary in order for the financial statements to be not misleading have been reflected therein.  The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

Accounting Basis

The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting).  The Company has adopted an October 31 fiscal year end.

Cash and Cash Equivalents

Axius considers all highly liquid investments with maturities of three months or less to be cash equivalents.  At July 31, 2012 and October 31, 2011, the Company had no cash equivalents.

Inventory

Inventory is valued at the lower of cost, determined by the first-in first-out method (“FIFO”), or market.  Inventory consists only of finished goods.

Intangible Asset

Intangible assets consist of rights to certain royalties of future sales of another entity.  The cost of these rights has been capitalized and is being amortized over their initial term of five years.

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AXIUS INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

July 31, 2012

Long-Lived Assets

The Company assesses long-lived assets for impairment as required under ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets.  The Company reviews for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable.  The Company assesses these assets for impairment based on estimated future cash flows from these assets.

Revenue Recognition

The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.

Shipping and Handling Costs

The Company includes costs of shipping and handling billed to customers in Revenue and the related expense of shipping and handling costs in Cost of Goods Sold.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, prepaid expenses and other current assets, accounts payable and accrued expenses. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

Income Taxes

Income taxes are computed using the asset and liability method.  Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws.  A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

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 the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Foreign Currency

The Company maintains both U.S. Dollar and Canadian Dollar bank accounts.  The functional currency is the U.S. Dollar.  The Company accounts for foreign currency translation pursuant to ASC 830-20, Foreign Currency Transactions.  All assets and liabilities are translated into United States dollars using the rates prevailing at the end of the period.  Revenues and expenses are translated using the average exchange rates prevailing throughout the period.  Unrealized foreign exchange amounts resulting from translations at different rates according to their nature are included in accumulated other comprehensive income or loss.  Recognized foreign currency transaction gains and losses are recognized in operations.

Comprehensive Income (Loss)

The Company applies the provisions of FASB’s ASC 220-10, Reporting Comprehensive Income, in which unrealized gains and losses from foreign exchange translations are reported in the consolidated statements of shareholder’s equity as comprehensive income (loss).

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AXIUS INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

July 31, 2012

Basic Income (Loss) Per Share

Basic income (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 July 31, 2012.

Stock-Based Compensation

The Company accounts for stock and stock options issued for services and compensation to employees under ASC 718-10.  For non-employees, the fair market value of the Company’s stock on the date of stock issuance or option/grant is used.  The Company determines the fair market value of the options issued using the Black-Scholes Pricing Model.  Under the provisions of ASC 718-10, share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the employee’s requisite service period.  To date, the Company has not adopted a stock option plan and has not granted any stock options.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current year presentation.  The reclassifications had no effect on the financial position, operations, or cash flows for the period ended July 31, 2011.

Recent Accounting Pronouncements

Axius does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.

NOTE 2 – INTANGIBLE ASSET

In February 2011, the Company entered into an agreement with Alpha Global Industries Ltd. (“AGI”) for the assignment of certain AGI rights in a memorandum of understanding (hereinafter “MOU”) between AGI and French Cosmetic Center Ltd. (“FC”) as related to AGI commissions on amounts invoiced and collected by FC.

In exchange for the rights to these commissions the Company issued 2,000,000 shares of common stock valued at $200,000.  The Company is currently amortizing these rights over their initial term of five years.  During the period ended April 30, 2012, the Company did not receive any commissions under this agreement. Amortization expense was $30,000 for the nine months ended July 31, 2012.

NOTE 3 – COMMON STOCK

The Company has 250,000,000 shares of $0.001 par value common stock authorized and 10,000,000 shares of $0.001 par value preferred stock authorized.  

In February 2012, the Company’s common stock issued and outstanding was forward split to become five shares for every one without any change in par value.  In addition, the Company increased its authorized number of shares from 90,000,000 to 250,000,000.

During the period ended July 31, 2012, 3,500,000 shares were issued at $0.02 per share in exchange for $70,000 in cash.

The Company has 58,500,000 shares of common stock and no shares of preferred stock issued and outstanding as of July 31, 2012.

NOTE 4 – COMMITMENTS AND CONTINGENCIES

The Company leases office space in the province of Ontario.  The lease payments are $1,800 per month ending July 2012. The Company renewed for additional one year term.

 

NOTE 5 – GOING CONCERN

 

The Company has negative working capital, has incurred losses since inception, and has received limited revenues from sales of products or services.  These factors create substantial doubt about the Company’s ability to continue as a going concern.  The financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.

 

The ability of the Company to continue as a going concern is dependent on the Company generating cash from the sale of its common stock and/or obtaining debt financing and attaining future profitable operations.  Management’s plans include selling its equity securities and obtaining debt financing to fund its capital requirement and ongoing operations; however, there can be no assurance the Company will be successful in these efforts.

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Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.   These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions.  We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions.  Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain.  Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.  We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.  Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

Company Overview

New management is in the process of determining the course(s) of business and/or acquisition of assets that the Company may intend to pursue. In that regard, Axius intends to link world cultures and business enterprise together under a common umbrella in Dubai, UAE; its mission being to improve business effectiveness within the Middle East and Africa region, by integrating International Business Standards to its clientele.

 

Significant Equipment

We do not intend to purchase any significant equipment for the next twelve months.

Financing

We intend to obtain business capital through the use of private equity fundraising or shareholders loans. We will need financing in order to implement our business plan.  

In the nine month period ended July 31, 2012, the Company received $70,000 in exchange for 3,500,000 shares of common stock.

Management has also been actively looking for other business opportunities, in addition to exploring for capital.

Results of Operations for the Three Month Periods Ended July 31, 2012 and 2011.

We generated no revenue for the period from September 18, 2007 (Date of Inception) until October 25, 2010.  On October 26, 2010, we received $25,000 for consulting fees.  For the three months ended July 31, 2012 and 2011, the Company received $1,931 and $611 in revenues for product sales.

Our Operating Expenses during the three months ended July 31, 2012 were $48,438, compared with $375,596 for the three month period ended July 31, 2011.  Decrease in operating expenses of $327,158 was a result of consulting fees incurred in prior period of $315,817, which included $305,000 charge for stock-based compensation, that were not present in current period and decrease in general and administrative expenses of $19,409 from $37,842 for the three months ended July 31, 2011 to $18,433 for the three months ended July 31, 2012.  These charges were offset by current period charge in amortization expense of $10,000 and increases to selling, payroll and professional fees.  We, therefore, recorded a net loss of $376,362 for the three months ended July 31, 2011, compared with a net loss for the three months ended July 31, 2012 of $47,050.

 

Results of Operations for the Nine Month Periods Ended July 31, 2012 and 2011 and Period from September 18, 2007 (Date of Inception) until July 31, 2012

We generated no revenue for the period from September 18, 2007 (Date of Inception) until October 25, 2010.  On October 26, 2010, we received $25,000 for consulting fees.  For the nine months ended July 31, 2012 and 2011, the Company received $3,139 and $611 in revenues for product sales.

Our Operating Expenses during the nine months ended July 31, 2012 were $208,188, compared with $502,133 for the nine month period ended July 31, 2011.  Decrease in operating expenses of $293,945 was a result of consulting fees incurred in prior period of $396,018, which included $305,000 charge for stock-based compensation, that were not present in current period.  This charge was offset by current period charge in amortization expense of $30,000 and increases to selling, payroll and professional fees.  Our Operating Expenses for the period from September 18, 2007 (Date of Inception) to July 31, 2012 were $983,947. We, therefore, recorded a net loss of $505,893 for the nine months ended July 31, 2011, compared with a net loss for the nine months ended July 31, 2012 of $207,810 and a net loss of $957,350 for the period from September 18, 2007 (Date of Inception) until July 31, 2012.

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Liquidity and Capital Resources

As of July 31, 2012 we had total current assets of $54,726.  We had $131,829 in current liabilities as of July 31, 2012. Thus, we had negative working capital of $77,103 as of July 31, 2012.  The current liabilities are associated with loans from HMM.  The loan from HMM are for amounts advanced to pay for professional services provided by our outside independent auditors, accountant and attorneys for services rendered for periods ending on and prior to July 31, 2012.   The amount is unsecured, due upon demand, and non-interest bearing. We have no commitment from any officer and director to advance funds in the future. 

Operating activities used $93,603 for the nine months ended July 31, 2012 as compared to $503,770 for the nine months ended July 31, 2011.  Decrease in cash used in operating activities of $410,167 was a result of decreases in net loss, inventory, and accounts payable.  Operating activities used $515,066 in cash for the period from September 18, 2007 (Date of Inception) until July 31, 2012. Financing Activities generated $525,250 in cash during the period from September 18, 2007 (Date of Inception) until July 31, 2012.

 

As of July 31, 2012, we do not have sufficient cash to operate our business at the current level for the next twelve months and insufficient cash to achieve our business goals. The success of our business plan is contingent upon us obtaining additional financing. We intend to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.

Off Balance Sheet Arrangements

As of July 31, 2012, there were no off balance sheet arrangements.

Going Concern

 

We have positive working capital, have incurred losses since inception, but have received revenues from sales of services.  These factors create substantial doubt about our ability to continue as a going concern.  The financial statements do not include any adjustment that might be necessary if we are unable to continue as a going concern.

Our ability to continue as a going concern is dependent on generating cash from the sale of our common stock and/or obtaining debt financing and attaining future profitable operations.  Management’s plans include selling our equity securities and obtaining debt financing to fund out capital requirement and ongoing operations; however, there can be no assurance we will be successful in these efforts.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

A smaller reporting company is not required to provide the information required by this Item.

Item 4.

Controls and Procedures

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of April 30, 2012.  This evaluation was carried out under the supervision and with the participation of our new officers of the Company , Roland Kaufman, President, Chief Executive Officer, Principal Executive Officer and Director and John Figliolini, Secretary/Treasurer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer and Director. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of April 30, 2012, our disclosure controls and procedures are effective.  There have been no changes in our internal controls over financial reporting during the period ended July 31, 2012.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

 

Limitations on the Effectiveness of Internal Controls

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives and our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

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PART II – OTHER INFORMATION

Item 1.

Legal Proceedings

We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

Item 1A:

Risk Factors

A smaller reporting company is not required to provide the information required by this Item.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

Item 3.

Defaults upon Senior Securities

None

Item 4.

Mine Safety Disclosures

None.

Item 5.

Other Information

None

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Item 6.

Exhibits

Exhibit Number	Description of Exhibit
31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

 

 

 

SIGNATURES

 

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.

 

	AXIUS, INC.
Date: September 14, 2012	By:	/s/ Roland Kaufman
		Name: Roland Kaufman
		Title: Chief Executive Officer

 

 

Date: September 14, 2012	By:	/s/ John Figliolini
		Name: John Figliolini
		Title: Chief Financial Officer

 

 

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