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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 10-Q
 
Mark One
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934
 
For the period ended September 30, 2012
 
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF 1934
 
For the transition period from __________ to _________
 
Commission File No. 000-53006
 
Novus Robotics Inc.
(Name of small business issuer in its charter)
 
Nevada
 
20-3061959
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
7669 Kimbal Street
Mississauga, Ontario
Canada L5S 1A7
(Address of principal executive offices)
 
(905) 672-7669
(Issuer’s telephone number)

N/A
 (Former name, former address and former fiscal year, if changes since last report)
 
Securities registered pursuant to Section 12(b) of the Act:
 
Name of each exchange on which registered:
None
   
 
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001
(Title of Class)
 
Indicate by checkmark 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
 
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 (Section 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 o   No x
 
Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
 
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
o
Smaller reporting company
x
 
Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No x
 
Applicable Only to Issuer Involved in Bankruptcy Proceedings During the Preceding Five Years.
 
N/A
 
Indicate by checkmark whether the issuer has filed all documents and reports required to be filed by Section 12, 13 and 15(d) of the Securities Exchange Act of 1934 after the distribution of securities under a plan confirmed by a court.  Yes  o No  o
 
Applicable Only to Corporate Registrants
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the most practicable date:
 
Class
Outstanding as of  November 14, 2012
Common Stock, $0.001
88,650,000
 


 
 

 
NOVUS ROBOTICS INC.

Form 10-Q

Part 1.   FINANCIAL INFORMATION
     
         
Item 1.
Financial Statements (unaudited)
   
3
 
   
   Balance Sheets
   
3
 
      
   Statements of Operations
   
4
 
 
   Statements of Cash Flows
   
5
 
 
   Notes to Financial Statements
   
6
 
           
Item 2.   
Management’s Discussion and Analysis of Financial Condition and Results of Operations
   
13
 
      
         
Item 3.   
Quantitative and Qualitative Disclosures About Market Risk
   
19
 
      
         
Item 4.
Controls and Procedures
   
19
 
           
Part II.   OTHER INFORMATION
       
      
         
Item 1.   
Legal Proceedings
   
22
 
      
         
Item 1A.   
Risk Factors
   
22
 
           
Item 2.  
Unregistered Sales of Equity Securities and Use of Proceeds
   
22
 
           
Item 3.   
Defaults Upon Senior Securities
   
24
 
      
         
Item 4.      
Mine Safety Disclosures
   
24
 
           
Item 5.  
Other Information
   
24
 
      
         
Item 6.      
Exhibits
   
25
 
 
 
2

 
 
PART I

ITEM 1. FINANCIAL STATEMENTS
 
NOVUS ROBOTICS INC.
CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012
(Unaudited)
 
NOVUS ROBOTICS INC.
Consolidated Balance Sheets
(Unaudited)
 
   
September 30,
   
December 31,
 
   
2012
   
2011
 
ASSETS            
             
Current assets
           
Cash
  $ 1,108,117     $ 969,502  
Accounts receivable
    314,523       367,136  
Inventory
    190,827       798,066  
Taxes recoverable
    10,591       39,063  
Prepaid expense
    1,865       2,870  
Total current assets     1,625,923       2,176,637  
                 
Security deposits
    14,839       14,450  
Fixed assets
               
Fixed assets, net of depreciaton     129,245       147,380  
Total assets   $ 1,770,007     $ 2,338,467  
                 
                 
LIABILITIES                
                 
Current liabilities
               
Accounts payable and accrued expenses
  $ 109,152     $ 254,799  
Note payable
    130,000       -  
Deferred revenue
    229,340       1,277,005  
Warranty provision
    16,945       49,165  
Taxes payable
    125,017       -  
Due to shareholder
    304,922       6,254  
Total current liabilities     915,376       1,587,223  
Total liabilities     915,376       1,587,223  
                 
Stockholders' equity
               
Preferred stock: 50,000,000 shares authorized,
               
at $0.001 par value, 0 shares issued and outstanding
    -       -  
Common stock: 500,000,000 shares authorized,
               
at $0.001 par value, 88,650,000 issued and outstanding
               
    (December 31, 2011 - 59,000,000 common shares)
    88,650       59,000  
Accumulated other comprehensive income
    50,049       81,677  
Retained earnings
    715,932       610,567  
Total stockholders' equity     854,631       751,244  
                 
Total liabilities and stockholders' equity   $ 1,770,007     $ 2,338,467  

The accompanying notes are an integral part of these consolidated interim financial statements.

 
3

 
NOVUS ROBOTICS INC.
Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
 
   
For the three months ended
   
For the nine months ended
 
   
September 30,
   
September 30,
 
   
2012
   
2011
   
2012
   
2011
 
                         
Revenue
  $ 590,502     $ 711,739     $ 2,942,306     $ 3,477,643  
Cost of sales
    166,206       146,426       1,292,346       1,746,887  
Gross profit
    424,296       565,313       1,649,960       1,730,756  
                                 
Expenses
                               
Compensation
    336,091       214,895       984,228       891,752  
Occupancy costs
    21,425       21,275       63,999       65,174  
Maintenance and repairs
    -       559       -       9,122  
Travel
    32,389       36,893       73,734       100,082  
Professional fees
    17,037       6,739       75,930       39,757  
Communication
    8,157       5,983       18,281       22,815  
Office and general
    13,218       12,186       47,135       58,779  
Foreign exchange gain
    5,246       -       4,833       -  
Total operating expenses
    433,563       298,530       1,268,140       1,187,481  
Income (loss) before income taxes
    (9,267 )     266,783       381,820       543,275  
Income tax (expense) benefit
    (75,114 )     -       (126,115 )     -  
                                 
Net income (loss)
  $ (84,381 )   $ 266,783     $ 255,705     $ 543,275  
                                 
Other comprehensive loss
                               
Foreign exchange adjustment loss     (24,897 )     -       (31,628 )     -  
Comprehensive income (loss)
    (109,278 )     266,783       224,077       543,275  
                                 
Basic and diluted income (loss) per share
  $ (0.00 )   $ 0.00     $ 0.00     $ 0.01  
                                 
Weighted average number of shares
                               
outstanding - basic and diluted
    88,650,000       59,000,000       85,283,150       59,000,000  

The accompanying notes are an integral part of these consolidated interim financial statements.

 
4

 

NOVUS ROBOTICS INC.
Consolidated Statements of Cash Flows
(Unaudited)
 
   
For the nine months ended
 
   
September 30,
 
   
2012
   
2011
 
             
Cash flow from operating activities            
Net income
  $ 255,705     $ 543,275  
Adjustments to reconcile net income to cash provided by (used in)
               
operating activities:
               
Depreciation
    18,135       28,950  
Changes in operating assets and liabilities                
Accounts receivable
    52,625       (892,694 )
Inventory
    607,433       930,938  
Prepaid expense
    1,005       (1,038 )
Security deposit
    (389 )     -  
Accounts payable and accrued expenses
    (145,646 )     (242,467 )
Deferred revenue
    (1,047,665 )     (174,653 )
Warrant provision
    (32,220 )     130,039  
Taxes recoverable/payable
    153,489       66,953  
Net cash provided by (used in) operating activities
    (137,528 )     389,303  
                 
Cash Flow from investing activity                
Cash received as a result of reverse merger transaction
    2,849       -  
Net cash provided by investing activities
    2,849       -  
                 
Cash Flow from financing activities                
Return of capital
    -       (103,870 )
Advance from shareholder
    490,650       -  
Repayment to shareholder
    (185,728 )     (110,537 )
Net cash provided by (used in) financing activities
    304,922       (214,407 )
                 
Effect of foreign exchange rate on changes in cash     (31,628 )     (49,813 )
                 
Increase in cash
    138,615       125,083  
                 
Cash, beginning of period
    969,502       646,380  
                 
Cash, end of period
  $ 1,108,117     $ 771,463  
                 
Non-cash investing and financing activities:                
Accounts receivable received as a result of reverse merger transaction
  $ (12 )   $ (12 )
Inventory received as a result of reverse merger transaction
  $ (194 )   $ (194 )
Related party receivable received as a result of reverse merger transaction
  $ (6,254 )   $ (6,254 )
Notes payable received as a result of reverse merger transaction
  $ 130,000     $ 130,000  

The accompanying notes are an integral part of these consolidated interim financial statements.
 
5

 
 
NOVUS ROBOTICS INC.
Notes to Interim Consolidated Financial Statements
September 30, 2012

 
1.
Basis of Presentation and Continuance
 
Novus Robotics Inc. (“Novus” or “the Company”) , formerly known as Ecoland International Inc. (“Ecoland”), a Nevada corporation, was incorporated on June 24, 2005 under the name Guano Distributors, Inc. for the purpose of selling Dry-Bar Cave bat guano.  On June 28, 2006, the articles of incorporation were amended to change its name to Ecoland.   On March 13, 2012, the articles of incorporation were amended to change the Company’s name to Novus.

Pursuant to a share exchange agreement dated January 27, 2012 between Novus and D&R Technologies Inc. (“D&R”), D&R incorporated under the laws of the Province of Ontario on June 16, 2004, the Company issued 59,000,000 common shares to the shareholders of D&R in exchange for 100% of their issued and outstanding common shares thereby making D&R its wholly-owned subsidiary.  The acquisition has been treated as a recapitalization of Novus with D&R as the accounting acquirer in accordance with the Reverse Merger rules.

D&R`s principle business activity is the engineering, design and the manufacturing of automated tube processing solutions for the automotive industry.

2.
Reverse Merger Transaction
 
Pursuant to the terms of an acquisition agreement between Ecoland and D&R dated January 27, 2012, the Company completed a reverse merger and recapitalization with D&R such that D&R became a wholly owned subsidiary of Novus and the shareholders of D&R acquired a majority of the common shares of Novus.  D&R, the legal subsidiary, is considered to have acquired the assets and liabilities of Ecoland (now Novus), the legal parent.  Immediate prior to the completion of the transaction, Ecoland had 88,650,000 common shares issued and outstanding.

Based on the balance sheet of Ecoland prepared in connection with the transaction, the net assets acquired by D&R were as follows:

      $  
Cash
    2,849  
Working capital deficiency
    (123,539
      (120,691

As a consequence of the transaction, the Company received cash of $2,849, a related party receivable of $6,254, other assets of $206 and assumed liabilities of $130,000.

For accounting purposes, the acquisition has been treated as a reverse merger and recapitalization of D&R with D&R as the acquirer, in essence, a recapitalization of Novus Robotics Inc. (fka Ecoland International, Inc.).  As such, the historical deficit of Ecoland, $1,053,361, was eliminated along with its additional paid in capital account by charging these amounts to retained earnings.
 
 
6

 

NOVUS ROBOTICS INC.
Notes to Interim Consolidated Financial Statements
September 30, 2012 

 
3.
SIGNIFICANT ACCOUNTING POLICIES
 
These interim consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States and are expressed in US dollars.  D&R’s functional currency is the Canadian Dollar.  They do not include all of the information and note disclosures required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2011included in the Company’s Annual Report on Form 10-K.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of results in accordance with US GAAP have been included and properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:

Principles of Consolidation

The consolidated financial statements include the accounts and operations of Novus and its wholly owned subsidiaries D&R Technologies Inc and D&R Tools Inc. All inter-company accounts and transactions have been eliminated on consolidation.

Uses of Estimates
 
The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Financial statement items subject to significant judgment include expense accruals, as well as income taxes and loss contingencies.  Actual results could differ from those estimates.
 
The areas which require management to make significant judgments, estimates and assumptions in determining carrying values include, but are not limited to:

Assets’ carrying values and impairment charges 

Assets, including property and equipment and inventory, are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount exceed their recoverable amounts.  In the determination of carrying values and impairment charges, management looks at the higher of recoverable amount or fair value less costs to sell in the case of assets and at objective evidence, significant or prolonged decline of fair value on financial assets indicating impairment. These determinations and their individual assumptions require that management make a decision based on the best available information at each reporting period.

Income taxes and recoverability of potential deferred tax assets 
 
In assessing the probability of realizing income tax assets recognized, management makes estimates related to expectations of future taxable income, applicable tax planning opportunities, expected timing of reversals of existing temporary differences and the likelihood that tax positions taken will be sustained upon examination by applicable tax authorities. In making its assessments, management gives additional weight to positive and negative evidence that can be objectively verified. Estimates of future taxable income are based on forecasted cash flows from operations and the application of existing tax laws in each jurisdiction. The Company considers whether relevant tax planning opportunities are within the Company’s control, are feasible, and are within management’s ability to implement. Examination by applicable tax authorities is supported based on individual facts and circumstances of the relevant tax position examined in light of all available evidence. Where applicable tax laws and regulations are either unclear or subject to ongoing varying interpretations, it is reasonably possible that changes in these estimates can occur that materially affect the amounts of income tax assets recognized. Also, future changes in tax laws could limit the Company from realizing the tax benefits from the deferred tax assets. The Company reassesses unrecognized income tax assets at each reporting period.
 
 
7

 

NOVUS ROBOTICS INC.
Notes to Interim Consolidated Financial Statements
September 30, 2012 

 
3.
SIGNIFICANT ACCOUNTING POLICIES - continued
 
Long-lived Assets
 
In accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ASC 360-10, "Property, Plant and Equipment" the carrying value of intangible assets and other long-lived assets is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment.  The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset.  Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value.

Regulatory Matters

The Company is subject to a variety of federal, provincial and state regulations governing land use, health, safety and environmental matters.  The Company’s management believes it has been in substantial compliance with all such regulations.
 
Cash and Cash Equivalents
 
The Company considers all highly liquid instruments with maturities of three months or less at the time of issuance to be cash equivalents.  At September 30, 2012, the Company had no cash equivalents.  The Company maintains its cash in bank deposit accounts which may exceed federally insured limits.  As of September 30, 2012, the Company’s accounts are insured for $100,000 CDN by Canadian Deposit Insurance Corporation for Canadian bank deposits and are for $20,000 by FDIC for US bank deposits.  The Company holds $1,012,532 CDN in one of its Canadian bank accounts, which is $912,532 in excess of the federally insured amount.

Inventory

Inventory, comprised principally of raw materials, is stated at the lower of cost or market using the first-in, first-out (“FIFO”) method. This policy requires D&R to make estimates regarding the market value of our inventory, including an assessment of excess or obsolete inventory. The Company determines excess and obsolete inventory based on an estimate of the future demand and estimated selling prices for its products.

Fixed Assets

Fixed assets are stated at cost.  Depreciation is recorded on a straight line basis reflective of the useful lives of the assets.  Expenditures for maintenance and repairs are charged to operations when incurred, while additions and betterments are capitalized. When assets are retired or disposed, the asset’s original cost and related accumulated depreciation are eliminated from accounts and any gain or loss is reflected in income.
 
   
Estimated
 
   
Useful Life
 
       
Office equipment
 
5 years
 
Computer equipment
 
5 years
 
Shop and Machinery equipment
 
7 to 10 years
 

 
8

 

NOVUS ROBOTICS INC.
Notes to Interim Consolidated Financial Statements
September 30, 2012

 
3.
SIGNIFICANT ACCOUNTING POLICIES - continued
 
Foreign Currency Translation

Gains and losses arising upon settlement of foreign currency denominated transactions or balances are included in the determination of income.  The Company’s functional currency is the U.S. dollar.  Transactions in foreign currency are translated into U.S. dollars in accordance with the ASC 830-30 as follows:

i. monetary items at the rate prevailing at the balance sheet date;
ii. non-monetary items at the historical exchange rate;
iii. revenue and expenses at the average rate in effect during the applicable accounting period.

Translation adjustments are included in accumulated other comprehensive income (loss), a separate component of stockholders’ equity.

Financial Instruments
 
The carrying values of the Company’s financial instruments, which comprise cash, accounts receivable, accounts payable, payroll liabilities, note payable, taxes payable and due to officers/shareholders, approximate their fair values due to the immediate or short-term maturity of these instruments.  Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.

Fair Value Measurements

The authoritative guidance for fair value establishes a three tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

Income Taxes
 
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not.   The Company has adopted ASC 740, "Accounting for Income Taxes," as of its inception.  Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward.  The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will be able to utilize the net operating losses carried forward in future years.

Advertising Costs
Advertising costs are expensed as incurred.  No advertising costs have been incurred by the Company to date

Revenue Recognition

The Company recognizes revenue in accordance with Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 101,"Revenue Recognition in Financial Statements" ("SAB 101") as modified by SEC Staff Accounting Bulletin No.104. Under SAB 101, revenue is recognized when the project is complete, and when collection of the resulting receivable is reasonably assured.

1.  
Spare parts – Revenues and expenses are recognized at the time of sale.
2.  
Service – Revenues and expenses are recognized at the time services are performed and accepted by customer via sign off.
3.  
Seat systems and tooling – progress invoicing to the customer are recorded as deferred revenue.  When the projects are installed and accepted by the customer the final invoice is issued and all deferred revenue is recognized along with the related work in process costs for the project.  Systems generally take 20-28 weeks to design, manufacture, assemble, and then ship to our various customers.

 
9

 
 
NOVUS ROBOTICS INC.
Notes to Interim Consolidated Financial Statements
September 30, 2012 

 
3.
SIGNIFICANT ACCOUNTING POLICIES - continued
 
D&R provides standard warranties for its product from the date of shipment. Estimated warranty obligations are recorded at the time of sale

Earnings per Common Share

Net income per share is provided in accordance with ASC 260-10, “Earnings per Share”.  Basic EPS is computed by dividing reported net income (loss) applicable to common shareholders by the weighted average number of common shares outstanding during the period.  Except where the result would be anti-dilutive to income from continuing operations, diluted earnings per share would be computed assuming the conversion of the convertible long-term debt and the elimination of the related interest expense, and the exercise of stock warrants.  Income per common share has been computed using the weighted average number of common shares outstanding during the year.  For the period ended September 30, 2012, the Company does not have equity instruments outstanding which would determine diluted income per share.

Comprehensive Income

The Company has adopted ASC 220, "Comprehensive Income," which establishes standards for reporting and the display of comprehensive income, its components and accumulated balances.  Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by owners or distributions to owners.  Among other disclosures, ASC 220 requires that all items that are required to be recognized under the current accounting standards as a component of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements.  Comprehensive income (loss) is displayed in the statement of shareholders' equity and in the balance sheet as a component of shareholders' equity.

Recent Accounting Pronouncements
 
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
 
 
10

 

NOVUS ROBOTICS INC.
Notes to Interim Consolidated Financial Statements
September 30, 2012


4.
DUE TO OFFICERS/SHAREHOLDERS
 
In November 2009, two shareholders loaned the Company $172,000 ($180,000 CDN) to finance the purchase of inventory.  The loan is repayable over 3 years and bears interest at the prescribed rates defined by the Canada Revenue Agency.  The loan was repaid in the first quarter of fiscal 2011.

During the first quarter of 2012, a shareholder of D&R loaned the Company $490,650 to assist with working capital requirements.  The loan is unsecured, non-interest bearing with no fixed terms of repayment.  The Company paid back $185,728 during the three months ended September 30, 2012.  As of September 30, 2012, $304,922 remains due.

5. 
COMMON STOCK TRANSACTION
 
Due to the reverse merger referenced in note 1, on February 12, 2012, the Company assumed notes payable and accrued interest totaling $130,000.  Included in this note are three separate notes payable to unrelated parties.  The notes are unsecured, due on demand and accrue interest at the rate of 8.0% per annum.
 
During 2011, the Board of Directors authorized a return of capital to the shareholders in the amount of $103,870.

On February 1, 2012, Novus issued 59,000,000 common shares and cancelled 59,000,000 common shares pursuant to the reverse merger transaction discussed in note 1 and note 2.

6. 
CONCENTRATIONS
 
The Company has significant economic and commercial dependence on Johnson Controls, Inc. (`JCI``).  As a result, D&R is subject to significant financial risk in the event of financial distress of JCI.  For the quarter ended September 30, 2012 and year ended December 31, 2011 more than 90% of all sales and receivables was to this entity.

7. 
LEASES AND OTHER COMMITMENTS
 
The Company leases premises totaling 18,000 square feet with monthly lease payments of approximately $12,000 per month expiring on July 31, 2013.

As at September 30, 2012, the aggregate minimum annual lease payments under operating leases were as follows:
 
2012
  $ 36,000  
2013
    84,000  
    $ 120,000  
 
 
11

 

FORWARD LOOKING STATEMENTS

Statements made in this Form 10-Q that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

We were formed in the State of Nevada on June 24, 2005 under the name Guano Distributors, Inc. Prior to our incorporation, on April 15, 2005, David Wallace, our then-chief executive officer, chief financial officer and sole director, formed Guano Distributors (Pty) Ltd., a South African registered company, for the purpose of selling Dry-Bar Cave bat guano. On May 15, 2005, Mr. Wallace transferred all of his ownership interest in Guano Distributors (Pty) Ltd. to us. On June 28, 2006, we amended our Articles of Incorporation to change our name to Ecoland International, Inc.

Share Exchange Agreement

We entered into that certain share exchange agreement dated January 27, 2012 (the "Share Exchange Agreement") with D&R Technology Inc., a private corporation (“D&R Technology”) and, Beradino Paolucci and Drakso Karanovic, the shareholders of D&R Technology Inc. (the “D&R Shareholders”). Our Board of Directors approved the execution and consummation of the transaction under the Share Exchange Agreement on February 1, 2012.  In accordance with the terms and provisions of the Share Exchange Agreement, we issued an aggregate of 59,000,000 shares of its restricted common stock to the D&R Shareholders in exchange for 100% of the total issued and outstanding shares of D&R Technology, thus making D&R Technology our wholly-owned subsidiary. Our Board of Directors deemed it in the best interests of our shareholders to enter into the Share Exchange Agreement pursuant to which it would acquire all the technology and assets and assume all liabilities of D&R Technology. This resulted in a change in control and our overall business operations thus bringing potential value to our shareholders.

In accordance with further terms and provisions of the Share Exchange Agreement, that certain employment agreement dated June 1, 2009 (the “Employment Agreement”) between us and David Wallace (“Wallace”) was terminated and Wallace waived any and all rights or claims to compensation due and owing under the terms of the Employment Agreement, including any liquidated damages due and owing Wallace under any currently existing severance pay plan for employees and any payments of benefits under any existing benefit coverages in which Wallace was participating in accordance with the terms of such benefit coverages (as that term is defined in the Employment Agreement).
 
 
13

 

Stock Purchase Agreement

We previously announced that certain of our controlling shareholders, who were Capitalsense Ltd., Altimo Ltd., Cimarron Capital Ltd. and David Wallace (the “Controlling Shareholders”), and D&R Technology entered into a stock purchase agreement dated November 7, 2011 (the “Stock Purchase Agreement”). In accordance with the terms and provisions of the Stock Purchase Agreement, the Controlling Shareholders were to transfer an aggregate of 59,000,000 shares of our restricted common stock held of record by the Controlling Shareholders to D&R Technology.

Termination Agreement

Subsequently, it was determined that the structure and transaction represented by the Stock Purchase Agreement did not reflect the intent and strategic goals of the parties. Therefore, the Controlling Shareholders and D&R Technology entered into that certain termination agreement dated January 27, 2012 (the “Termination Agreement”), pursuant to which the parties rescinded the Stock Purchase Agreement and the Controlling Shareholders returned to the Corporation their respective share certificates evidencing the aggregate 59,000,000 shares of common stock of the Corporation. The respective share certificates received from the Controlling Shareholders were cancelled and the 59,000,000 shares of common stock were returned to treasury.  Thus, neither D&R Technology nor the Controlling Shareholders no longer retained the general respective rights attributable to our shareholders. The Controlling Shareholders returned their respective shares to us with the understanding that the shares were to be cancelled and returned to treasury as a condition precedent to consummation of the Share Exchange Agreement whereby 59,000,000 shares of our common stock were going to be issued in exchange for the total issued and outstanding shares of common stock of D&R Technology.
 
Certificate of Amendment

On March 13, 2012, we filed a Certificate of Amendment with the Nevada Secretary of State in order to change our name from “Ecoland International Inc.” to “Novus Robotics Inc.” (the “Name Change”). The Name Change was effective with the Nevada Secretary of State on March 13, 2012, when the Certificate of Amendment was filed. The Name Change was approved by our Board of Directors pursuant to written consent resolutions dated February 21, 2012 and further approved by certain shareholders holding a majority of our total issued and outstanding shares of common stock pursuant to written consent resolutions dated February 21, 2012.

We filed the appropriate documentation with FINRA in order to effectuate the Name Change in the OTC Markets. The Name Change was effected on the OTC Markets on April 10, 2012. Our new cusip number is 67011H108.  The list of officers will be updated with the correct list on or before September 30, 2012.

Therefore, as of the date of this Quarterly Report, our trading symbol is “NRBT”. Our management deemed it appropriate to change our name to Novus Robotics Inc. in furtherance of and to better reflect the nature of our new business operations.

Please note that throughout this Quarterly Report, and unless otherwise noted, the words "we," "our," "us," the "Company," or "Novus Robotics," refers to Novus Robotics Inc.
 
 
14

 

CURRENT BUSINESS OPERATIONS

We are involved in the area of engineering, design and manufacturing of robotics and automation technology solutions, which management believes will enable us to become a recognized technology pioneer and market leader in the area of engineering. Through our wholly-owned subsidiary, D&R Technology, we will provide state of the art automation technologies to solve our customers’ complex automation needs, increase efficiencies and improve manufacturing processes. Serving as a comprehensive engineering partner, we will work with other leading robotic manufacturers to provide the best automation technologies. We will provide automation solutions to a wide spectrum of customers and industries ranging from large Fortune 500 companies to small privately-held businesses. Our automated solutions can be found in manufacturing, assembly and processing lines throughout the United States, Canada, Mexico and South America. D&R Technology has served the automotive industry for more than seven years and is currently applying its service solutions to other markets, such as medical robotics, personal robotic devices and the water treatment industry. Management believes that increasing use of robotics in sectors such as food handling and processing, clean technology and energy, as well as pharmaceutical and general consumer goods production, will lead to increased demand for company’s products as manufacturers look to improve the speed, quality and reliability of production through automation.

We intend to rapidly become one of the leading providers of automated manufacturing solutions, which are used primarily by three of the top ten Tier I automotive part suppliers in the world. We also make precision components and tooling using our own custom-built manufacturing systems, process knowledge and automation technology.

Our business is in its early development and operating stages. To date, our primary activities include designing and installation of retrofits to existing automotive systems, automotive spare parts, automotive maintenance and repairs. We are currently offering products such as Seat Frame Systems, IP Tube systems and Integrated Bend-Weld Systems for the automotive industry. Our primary focus will be placed on product engineering and manufacturing processes as discussed above to ensure the highest quality, product features and efficient manufacturing processing.
 
RESULTS OF OPERATIONS
 
   
Nine Month Periods Ended September 30,
 
   
2012
   
2011
 
                 
Revenues
   
2,942,306
     
3,477,643
 
Cost of Goods Sold
   
1,292,346
     
1,746,887
 
Gross Profit
   
1,649,960
     
1,730,756
 
Expenses
               
Compensation
   
984,228
     
891,752
 
Occupancy costs
   
63,999
     
65,174
 
Maintenance and repairs
   
-0-
     
9,122
 
Travel
   
73,734
     
100,082
 
Professional fees
   
75,930
     
39,757
 
Communication
   
18,281
     
22,815
 
Office and general
   
47,135
     
58,779
 
Foreign exchange loss
   
4,833
     
-0-
 
Total Operating Expenses
   
1,268,140
     
1,187,481
 
Income tax (expense) benefit
   
(126,115)
     
-0-
 
Net Income
   
255,705
     
543,275
 
Foreign exchange adjustment
   
(31,628)
     
-0-
 
Comprehensive income
   
224,077
     
543,275
 
 
 
15

 

Nine Month Period Ended September 30, 2012 Compared to Nine Month Period Ended September 30, 2011

Our comprehensive income for the nine month period ended September 30, 2012 was $224,077 compared to comprehensive income of $543,275 during the nine month period ended September 30, 2011 (a decrease of $319,198).

During the nine month period ended September 30, 2012, we generated revenue in the amount of $2,942,306 compared to revenue generated during the nine month period ended September 30, 2011 of $3,477,643 (a decrease of $535,337).  During the nine month period ended September 30, 2012, cost of goods sold was $1,292,346 compared with $1,746,887 during the nine month period ended September 30, 2011. This resulted in gross profit of $1,646,960 during the nine month period ended September 30, 2012 compared with a gross profit of $1,730,756 during the nine month period ended September 30, 2011. The decrease in revenues during the nine month period ended September 30, 2012 compared with 2011 related to decreased sales to consumers of our special purpose machinery products and services due to management’s focus on the acquisition of our wholly-owned subsidiary. The decrease in cost of sales was due to the decrease in sales.
  
During the nine month period ended September 30, 2012, we incurred operating expenses of $1,268,140 compared to $1,187,481 incurred during the nine month period ended September 30, 2011 (an increase of $80,659). The operating expenses incurred during the nine month period ended September 30, 2012 consisted of: (i) compensation of $984,228 (2011: $891,752); (ii) occupancy costs of $63,999 (2011: $65,174); (iii) maintenance and repairs of $-0- (2011: $9,122); (iv) travel of $73,734 (2011: $100,082); (v) professional fees of $75,930 (2011: $39,757); (vi) communication of $18,281 (2011: $22,815); (vii) office and general of $47,135 (2011: $58,779); and (viii) foreign exchange benefit of $4,833 (2011: $-0-). During the nine month period ended September 30, 2012, we also recorded income tax expense of $126,115 (2011: $-0-). The increase in the incurrence of operating expenses during the nine month period ended September 30, 2012 reflects the greater expenses incurred as a result of compensation to employees and audit and accounting-related expenses during the period. Operating expenses include overhead expenses such as rent, management and staff salaries, general insurance, marketing, accounting, legal and offices expenses.

The decrease in net income during the nine month period ended September 30, 2012 from the nine month period ended September 30, 2011 resulted primarily from the decrease in total revenue generated.   

Due to transactions denominated and settled in foreign currency, we generated a gain on foreign translation of 31,628 (2011: $-0-) during the nine month period ended September 30, 2012.

Three Month Period Ended September 30, 2012 Compared to Three Month Period Ended September 30, 2011

Our comprehensive loss for the three month period ended September 30, 2012 was $109,278 compared to comprehensive income of $266,783 during the three month period ended September 30, 2011 (a decrease of $376,061).

During the three month period ended September 30, 2012, we generated revenue in the amount of $590,502 compared to revenue generated during the three month period ended September 30, 2011 of $711,739 (a decrease of $121,237).  During the three month period ended September 30, 2012, cost of goods sold was $166,206 compared with $146,426 during the three month period ended September 30, 2011. This resulted in gross profit of $424,296 during the three month period ended September 30, 2012 compared with a gross profit of $565,313 during the three month period ended September 30, 2011. The decrease in revenues during the three month period ended September 30, 2012 compared with 2011 related to decreased sales to consumers of our special purpose machinery products and services due to management’s focus on the acquisition of our wholly-owned subsidiary.
 
 
16

 
 
During the three month period ended September 30, 2012, we incurred operating expenses of $433,563 compared to $298,530 incurred during the three month period ended September 30, 2011 (an increase of $135,033). The operating expenses incurred during the three month period ended September 30, 2012 consisted of: (i) compensation of $336,091 (2011: $214,895); (ii) occupancy costs of $21,425 (2011: $21,275); (iii) maintenance and repairs of $-0- (2011: $559); (iv) travel of $32,389 (2011: $36,893); (v) professional fees of $17,037 (2011: $6,739); (vi) communication of $8,157 (2011: $5,983); (vii) office and general of $13,218 (2011: $12,186); and (viii) foreign exchange gain of $5,246 (2011: $-0-). During the three month period ended September 30, 2012, we also recorded an  income tax expense of $75,114 (2011: $-0-). The increase in the incurrence of operating expenses during the three month period ended September 30, 2012 reflects the greater expenses incurred as a result of increased compensation and audit and accounting-related expenses.

The decrease in net income during the three month period ended September 30, 2012 from the net income during the three month period ended September 30, 2011 resulted primarily from the decrease in total revenue generated.   

Due to transactions denominated and settled in foreign currency, we generated a loss on foreign translation of $24,897 (2011: $-0-) during the three month period ended September 30, 2012.

The change in gross profit margin at quarter ended March 31, 2012, quarter ended June 30, 2012 and quarter ended September 30, 2012 resulted from the difference in costs. During the quarter ended March 31, 2012, we realized revenue of approximately $1,624,000 with no costs, which would have resulted in a higher gross margin. During quarter ended June 30, 2012, we realized revenue of approximately $727,000, however, we had higher costs. During quarter ended September 30, 2012, we realized revenue of approximately $591,000 and we had lower costs. These costs related to performance of services related to use of aluminum, which required certain research and development since it was our first time using aluminum. Therefore, we did not realize the usual profit and thus explains the difference in gross margin between the first, second and third quarters of fiscal year 2012.
 
LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2012

As of September 30, 2012, our current assets were $1,625,923 and our current liabilities were $915,337, which resulted in a working capital surplus of $710,586. As at September 30, 2012, current assets were comprised of: (i) $1,108,117 in cash; (ii) $314,523 in accounts receivable; (iii) $190,827 in inventory; (iv) $10,591 in taxes recoverable; and (iv) $1,865 in prepaid expenses. As of September 30, 2012, current liabilities were comprised of: (i) $109,153 in accounts payable and accrued expenses; (ii) $130,000 in note payable; (iii) $229,340 in deferred revenue; (iv) $16,945 in warranty provision; (v) $125,017 in taxes payable; and (vi) $304,922 due from shareholder.

As of September 30, 2012, our total assets were $1,770,007 comprised of: (i) $1,625,923 in current assets; (ii) $14,839 in security deposits; and (iii) $129,245 in fixed assets, net of depreciation. The decrease of total assets during the nine month period ended September 30, 2012 from December 31, 2011 was primarily due decreases in inventory.

As of September 30, 2012, our total liabilities were $915,377 comprised entirely of current liabilities. The decrease in liabilities during the nine month period ended September 30, 2012 was primarily due to decreases in accounts payable, deferred revenue.

Stockholders’ equity increased from $751,244 as of December 31, 2011 to $854,630 as of September 30, 2012.
 
 
17

 

Cash Flows from Operating Activities

We have generated positive cash flows from operating activities. For the nine month period ended September 30, 2012, net cash flows used in operating activities was $137,528. Net cash flows from operating activities was adjusted by $18,135 in depreciation. Net cash flow from operating activities was further changed by an increase of $607,433 in inventory, a decrease of $32,220 in warranty provision and an increase of $153,489 in taxes recoverable/payable. Net cash flow from operating activities was further changed by a decrease of $52,625 in accounts receivable, $1,005 in prepaid expense, $149,647 in accounts payable and accrued expense and $1,047,665 in deferred revenue.

For the nine month period ended September 30, 2011, net cash flows from operating activities was $389,303 consisting primarily of net income of $543,275. Net cash flows from operating activities was adjusted by $28,950 in depreciation. Net cash flow from operating activities was further changed by an increase of $892,694 in accounts receivable, $930,938 in inventory, $1,038 in prepaid expense, $242,467 in accounts payable and accrued expense, $174,653 in deferred revenue, $130,039 in warranty provision and $66,953 in taxes recoverable/payable.
 
Cash Flows from Investing Activities

For the nine month period ended September 30, 2012, net cash flows from investing activities was $2,848 consisting exclusively $2,848 in cash received as result of the Share Exchange Agreement. Net cash flows from investing activities for the nine month period ended September 30, 2011 was zero.

Cash Flows from Financing Activities

For the nine month period ended September 30, 2012, net cash flows provided by financing activities was $304,922 compared to net cash flows used in financing activities of $214,407 for the nine month period ended September 30, 2011. Net cash flows used in financing activities for the nine month period ended September 30, 2012 consisted of 490,650 in advances from officers and repayment of $185,728 to officers. Net cash flows used in financing activities for the nine month period ended September 30, 2011 consisted of repayment of $110,537 to officers and directors and $103,870 in return of capital.

We expect that working capital requirements will continue to be funded through a combination of our existing funds and generation of revenues. Our working capital requirements are expected to increase in line with the growth of our business.

PLAN OF OPERATION AND FUNDING

Our principal demands for liquidity are to increase capacity, inventory purchase, sales distribution, and general corporate purposes. We intend to meet our liquidity requirements, including capital expenditures related to the purchase of equipment, purchase of inventory, and the expansion of our business, through cash flow provided by operations and funds raised through proceeds from the issuance of debt or equity.

Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next six months. We have no lines of credit or other bank financing arrangements. We may finance expenses with further issuances of securities and debt issuances. Any additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all.
 
 
18

 

MATERIAL COMMITMENTS

Note Payable

Due to the reverse merger referenced in note 1 to the financial statements, on February 1, 2012, we  assumed notes payable and accrued interest totaling $130,000. Included in this amount are three separate notes payable to unrelated entities. The notes are unsecured, due on demand and accrue interest at a rate of 8.0% per annum.
 
Loan from Shareholder

During the three month period ended March 31, 2012, a shareholder of D&R Technology, our wholly-owned subsidiary, loaned us $500,000 to assist with working capital requirements. The loan is unsecured, non-interest bearing with no fixed terms of repayment.  The current balance as of September 30, 2012 is $304,922.
 
PURCHASE OF SIGNIFICANT EQUIPMENT

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

OFF-BALANCE SHEET ARRANGEMENTS

As of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required for smaller reporting company.

ITEM 4. CONTROLS AND PROCEDURES
 
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
 
We have performed an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of our disclosure controls and procedures, (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our management, including our CEO and CFO, concluded that our disclosure controls and procedures were not effective as of September 30, 2012 to provide reasonable assurance that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
 
 
19

 

Based on such evaluation, our Chief Executive Officer/Chief Financial Officer have concluded that, as of the end of the period covered by this Quarerly Report on Form 10-Q, our interal controls over financial reporting were not effective:

·
to give reasonable assurance that the information required to be disclosed by us in reports that we file under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and

·
to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding required disclosure.

We believe that the foregoing steps will remediate the significant deficiencies identified above, and we will continue to monitor the effectiveness of these steps and make any changes that our management deems appropriate. A material weakness (within the meaning of PCAOB Auditing Standard No. 5) is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the company's financial reporting.

During our assessment of the effectiveness of internal control over financial reporting as of September 30, 2012, management identified significant deficiencies related to: (i) the absence of an Audit Committee as of September  30, 2012; and (ii) a lack of segregation of duties within accounting functions.

We began preparing to be in compliance with the internal control obligations, including Section 404, for our fiscal year ending December 31, 2012. In an effort to improve our internal control environment, management has engaged a Chartered Accountant to review the work prepared by the controller. He is independent of the daily accounting function. He prepares the quarterly financial statement after reviewing and recommending adjustments to the records based on his analysis of the financial information presented. This review includes vouching and reconciling key accounts to source documents.

In order to correct the foregoing weaknesses, we have taken certain further remediation measures and designed new internal controls and procedures to ensure: (a) effectiveness and efficiency of operations; (b) reliability of financial reporting; and (c) compliance with laws and regulations. To that end, management will provide a controlled environment which organizes and influences its people.
 
(a)
Management is establishing an information and communication system for its executives and employees allowing them to carry out their responsibilities in an organized and process driven manner.
  
(a)
The firm engaged the Chartered Accountant to assist with: (a) compiling and maintaining our financial records; (b) assisting the bookkeeping staff with proper recording of transactions; (c) maintaining permanent accounting records and proper backup procedures; and (d) providing continuous monitoring of accounting functions throughout the company. In addition, the Chartered Accountant will perform a risk assessment which identifies and analyzes the relevant risks management should address in order to achievement of its objectives. The Chartered Accountant will also assist with the preparation of written policies and procedures that will help ensure management directives are carried out.

(b)
Our President/Chief Executive Officer is serving as the point of communication between us and the audit firm. Communication between our President/Chief Executive Officer and the audit firm’s engagement partner has been established to ensure that the audit is aware of management’s intent and actions.
 
 
20

 
  
Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Under the supervision and with the participation of the Company’s management, including the chief executive officer and principal financial officer, we evaluated the effectiveness of our internal control over financial reporting as of September 30, 2012. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework.

This Quarterly Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this Quarterly Report on Form 10-Q.

Inherent Limitations on Effectiveness of Controls

We believe that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, and our CEO and our CFO have concluded that these controls and procedures are not effective at the “reasonable assurance” level.
 
Changes in internal controls

There were no changes in internal controls for the nine month period ended September 30, 2012.

AUDIT COMMITTEE REPORT

Our Board of Directors has not established an audit committee. The respective role of an audit committee has been conducted by our Board of Directors. We intend to establish an audit committee during fiscal year 2012. When established, the audit committee's primary function will be to provide advice with respect to our financial matters and to assist our Board of Directors in fulfilling its oversight responsibilities regarding finance, accounting, and legal compliance. The audit committee's primary duties and responsibilities will be to: (i) serve as an independent and objective party to monitor our financial reporting process and internal control system; (ii) review and appraise the audit efforts of our independent accountants; (iii) evaluate our quarterly financial performance as well as its compliance with laws and regulations; (iv) oversee management's establishment and enforcement of financial policies and business practices; and (v) provide an open avenue of communication among the independent accountants, management and our Board of Directors.
 
 
21

 
 
PART II. OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

No report required.

ITEM IA.  RISK FACTORS

No report required.

ITEM 2.   UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS

Effective on February 1, 2012, we issued an aggregate of 59,000,000 shares of our restricted common stock to the D&R Shareholder, which are non-United States residents. In accordance with the terms and provisions of the Share Exchange Agreement, the D&R Shareholders acquired an aggregate of 59,000,000 shares of our restricted common stock in exchange for one hundred percent (100%) of the total issued and outstanding shares of D&R Technology held of record by the D&R Shareholders in a private transaction.
 
The shares were issued to three non-United States residents in reliance on Regulation S promulgated under the United States Securities Act of 1933, as amended (the “Securities Act”). The shares of common stock have not been registered under the Securities Act or under any state securities laws and may not be offered or sold without registration with the United States Securities and Exchange Commission or an applicable exemption from the registration requirements. The D&R Shareholders acknowledged that the securities to be issued have not been registered under the Securities Act, that they understood the economic risk of an investment in the securities, and that they had the opportunity to ask questions of and receive answers from our management concerning any and all matters related to acquisition of the securities.
 
Beneficial Ownership Chart

The following table sets forth certain information, as of the date of this Quarterly Report, with respect to the beneficial ownership of the outstanding common stock by: (i) any holder of more than five (5%) percent; (ii) each of our executive officers and directors; and (iii) our directors and executive officers as a group. Except as otherwise indicated, each of the stockholders listed below has sole voting and investment power over the shares beneficially owned. Unless otherwise indicated, each of the stockholders named in the table below has sole voting and investment power with respect to such shares of common stock. Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated. As of the date of this Quarterly Report, there are 88,650,000 shares of common stock issued and outstanding.
 
 
22

 
  
Name and Address of Beneficial Owner(1)
 
Amount and Nature of Beneficial Ownership(1)
   
Percentage of Beneficial Ownership
 
Directors and Officers:
           
Berardino Paolucci
7669 Kimbal Street
Mississauga, Ontario
Canada L5S 1A7
   
28,320,000
     
31.95
%
                 
Drasko Karanovic
7669 Kimbal Street
Mississauga, Ontario
Canada L5S 1A7
   
14,160,000
     
15.97
%
                 
Velijko Pjevac
7669 Kimbal Street
Mississauga, Ontario
Canada L5S 1A7
   
-0-
     
0
%
                 
All executive officers and directors as a group (3 person)
   
42,480,000
     
47.93
%
                 
Beneficial Shareholders Greater than 10%
               
                 
D Mecatronics Inc.
7669 Kimbal Street
Mississauga, Ontario
Canada L5S 1A7
   
              16,520,000
(2)    
18.63
%
 
*
Less than one percent.
 
(1)
Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding as of the date of this Current Report. As of the date of this Current Report, there are 88,650,000 shares issued and outstanding.
   
(2)
The individuals who exercise the voting and dispositive power on behalf of D Mecatronics are Beradino Paolucci, and Drasko Karanovic, who are also members of the Board of Directors of the Corporation, and Dino Paolucci Jr., who is the son of Beradino Paolucci.
 
 
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ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

No report required.

ITEM 4.  MINE SAFETY DISCLOSURES

No report required.

ITEM 5.  OTHER INFORMATION

Effective with the Share Exchange Agreement, Mr. David Wallace resigned as our sole officer and director and new officers and directors were appointed. Our directors hold office for one-year terms or until their successors have been elected and qualified. The biographies of the new directors and officers are set forth below as follows:

Berardino Paolucci.  Mr. Paolucci is our President/Chief Executive Officer, Secretary and Treasurer/Chief Financial Officer and a member of the Board of Directors. Mr. Paolucci has over thirty years experience in customer and quality-focused business and provides strategic vision and leadership qualities that drive operational process, productivity, efficiency and improvement at multisite manufacturing organizations. He is an expert in combining financial and business planning with tactical execution to optimize long-term gains in performance, revenues and profitability. His breadth of experience includes quality and manufacturing operations, lean concept, root cause and corrective action preventive action (CAPA) analysis, team concepts, total preventive maintenance, set-up reduction and standard work. Mr. Paolucci has been employed by D&R Technologies Inc. from 1994 through 2004 where he held the position of manufacturing supervisor. His previous responsibilities included: (i) manage and direct all electrical, mechanical, hydraulic and process functions within departments; (ii) continuously impact and improve the key performance indicators across the process such as machine mechanical, hydraulic, pneumatic and electrical build, process improvement, identification and sourcing of new equipment as well as the payout and reallocation of equipment and workforce; (iii) develop and initiate appropriate actions that lead to optimizing production capabilities of all machinery, equipment and resources resuling in improved machine utilization, labor efficiency, expense reduction and on-time delivery; (iv) recommend solutions to customers for preventative maintenance, machine layouts and configuration of machinery for the purpose of proaction planning as well as responding to day to day service issues; and (v) manage and develop department’s team members by conducting regular appraisal, developing performance improvement plans, administering salary and compensation as per company policy and providing direction and support for the development of individuals within the department. Mr. Paolucci also owned his own machine shop and was plant foreman for Dieco Technology for over ten years where he was responsible for production, inventory, purchasing, labor and overall supervision of the plant.

Drasko Karanovic.  Mr. Karanovi is a member of our Board of Directors. Mr. Karanovic has over twenty years of experience in progressive design, supervisory and management experience in engineering fields, comprehensive knowledge of engineering technology, strong management, communication, interpersonal and customer service skills, extensive knowledge of CAD systems and tooling engineering and development expertise. He was employed with Dieco Technologies from 1994 through 2004 and D Mecatronics Inc. from 2004 to current date. His responsibilities included: (i) member of senior management team in setting strategic operation direction; (ii) prepare proposals, evaluating future equipment performance and recommend improvements for new and existing products; (iii) direct personnel activities of staff, i.e. hire, train, appraise, reward, motivate, discipline, recommend termination (iv) direct, coordinate and exercise functional authority for planning, organization, control, integration and completion of engineering projects; (v) supervising staff of mechanical, electrical and hydraulic designers, production engineering support staff in the custom design, development, improvement and modification of machinery; (vi) direct the research and development effort leading to new or improved products; and (vii) develop and maintain overall product development plan so that new or improved products are timely delivered to market.  Mr. Karanovic was the engineering manager for over three years at Dieco Technology. Mr. Karanovic earned a Bachelor of Mechanical Engineer degree 
 
Velijko Pjevac.  Mr. Pjevac is a member of our Board of Directors. Mr. Pjevac has over thirty-five years of experience as an engineer and worldwide industrial manager in the industrial automation field. He also has over thirty-one years experience in designing dies, tooling, tube processing systems and expanded metals for the automobile industry. He has successfully dealt with strategy and engineering issues within small companies and large corporations, all at management levels. He also has extensive knowledge of strategic planning, resource allocation, leadership techniques, production methods and coordination of people and resources. Mr. Pjevac was previously employed with Dieco Technologies Inc. from 1998 through 2004 and has been employed with D&R Technologies from 2004 to current date as an engineering manager. He provides the strategic vision and leadership qualities that drive engineering process, productivity, efficiency and bottom-line improvements. Mr. Pjevac’s responsibilities include: (i) provides technical direction for the development, design, and systems from definition phase through implementation; (ii) applies significant knowledge of industry trends and developments to improve service to our clients; and (iii) reviews work of development and sales team. Previously, Mr. Pjevac was the manager of the technical department for eight years with approximately 500 employees reporting to him
 
 
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ITEM  6.  EXHIBITS AND REPORTS ON FORM 8-K
 
(d) Exhibits.  The exhibits listed in the following Exhibit Index are filed as part of this Current Report on Form 8-K.
 
Exhibit
Number
 
Description
     
3. 1
 
Articles of Incorporation of Ecoland International Inc. incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Registration Statement on Form SB-2 on February 1, 2007
     
3.2
 
Bylaws of Ecoland International Inc. incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Registration Statement on Form SB-2 on February 1, 2007
     
10.1
 
Share Exchange Agreement between Ecoland International Inc. and D&R Technologies Inc. as filed with the Securities and Exchange Commission as an Exhbit to the Current Report on Form 8-K on February 3, 2012.
     
31.1
 
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act.
     
31.2
 
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act.
     
32.1
 
Certification of Chief Executive Officer an Chief Financial Officer under Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act.
 
99.1
 
Audited financial statements of D&R Technologies Inc.
     
99.2
 
Unaudited pro forma combined financial statements of D&R and Ecoland International Inc.
 
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

** 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.
 
 
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SIGNATURES
 
Pursuant to the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
NOVUS ROBOTICS INC.
 
       
Dated: November 15, 2012  
By:
/s/ BERARDINO PAOLUCCI
 
   
Berardino Paolucci,
 
   
President/Chief
 
   
Executive Officer
 
       
Dated: November 15, 2012  
By:
/s/ BERARDINO PAOLUCCI
 
   
Berardino Paolucci,
 
   
Chief Financial Officer
 
 
 
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