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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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 September 30, 2013

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________ to ___________

 

Commission File Number: 333-149617

 

Novagen Ingenium, Inc.

(Name of registrant as specified in its charter)

 

Nevada

 

98-0471927

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

9120 Double Diamond Pkwy, Suite 2227, Reno, Nevada 89521

(Address of Principal Executive Offices)

 

(310) 994-7988

(Issuer’s telephone number)

 

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 (§232.405 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. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller Reporting Company

x

 

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

 

As of September 22, 2014, the issuer had 48,510,901 shares of common stock, $0.001 par value per share, issued and outstanding.

 

 

 

 NOVAGEN INGENIUM, INC.

 

TABLE OF CONTENTS

 

PART I – FINANCIAL INFORMATION

3

 

 

 

Item 1.

Financial Statements.

3

Item 2.

Management’s Discussion and Analysis or Plan of Operation.

9

Item 3.

Quantitative and Qualitative Disclosure about Market Risk.

12

Item 4.

Controls and Procedures.

12

 

 

 

PART II – OTHER INFORMATION

13

 

 

 

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

 

 

 

SIGNATURES

15

 

 
2

 

PART I – FINANCIAL INFORMATION

 

Item 1 – Financial Statements

 

NOVAGEN INGENIUM, INC.

BALANCE SHEETS

(Unaudited)

 

    September 30,
2013
    December 31,
2012
 
         

ASSETS

       

Cash and equivalents

 

$

493

   

$

1,451

 

Accounts receivable

   

106

     

7,995

 

Other current assets

   

8

     

13,056

 

Investments

   

-

     

18,821

 

Total current assets

   

607

     

41,323

 
               

Property and equipment, net

   

-

     

31,576

 

Intangible assets

   

-

     

5,759

 

Total non-current assets

   

-

     

37,335

 
               

TOTAL ASSETS

 

$

607

   

$

78,658

 
               

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

               

Accounts payable and accrued liabilities

 

$

96,312

   

$

156,413

 

Notes payable

   

164,049

     

129,730

 

Notes payable, related parties

   

109,577

     

290,834

 

Deferred income

   

80,728

     

59,972

 

Total current liabilities

   

450,666

     

636,949

 
               

TOTAL LIABILITIES

   

450,666

     

636,949

 
               

STOCKHOLDERS' DEFICIT

               

Preferred stock, $0.0001 par value, 50,000,000 shares authorized; no shares issued and outstanding

    -      

-

 

Common stock, $0.0001 par value; 100 million shares authorized, 48,510,901 and 46,510,901 shares issued and

outstanding at September 30, 2013 and December 31, 2012, respectively

   

4,852

     

4,652

 

Additional paid in capital

   

1,610,338

     

1,199,494

 

Accumulated other comprehensive gain (loss)

   

56,448

   

(4,233

)

Accumulated deficit

 

(2,121,697

)

 

(1,758,204

)

TOTAL STOCKHOLDERS' DEFICIT

 

(450,059

)

 

(558,291

)

               

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

 

$

607

   

$

78,658

 

 

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

 

 
3

 

NOVAGEN INGENIUM, INC.

RESULTS OF OPERATIONS

(Unaudited)

 

    Successor     Successor     Predecessor     Successor     Successor  
    July 1, 2012
to September 30,
2012
    July 1, 2013
to September 30,
2013
    January 1, 2012
to June 25,
2012
    June 25, 2012
to September 30,
2012
    January 1, 2013
to September 30,
2013
 
                     

REVENUES

                   

Sales

 

$

3,367

   

$

1,964

   

$

250

   

$

3,367

   

$

27,694

 

Cost of revenues

   

-

     

1,810

     

1,458

     

-

     

27,988

 

Gross profit

   

3,367

     

154

   

(1,208

)

   

3,367

   

(294

)

                                       

OPERATING EXPENSES

                                       

General and administrative expenses

   

192,122

     

38,213

     

2,450

     

192,122

     

163,711

 

Depreciation, depletion and amortization

   

24,309

     

-

     

-

     

24,309

     

568

 

Total operating expenses

   

216,431

     

38,213

     

2,450

     

216,431

     

164,279

 
                                       

Net loss

 

(213,064

)

 

(38,059

)

 

(3,658

)

 

(213,064

)

 

(164,573

)

                                       

OTHER INCOME/(EXPENSE)

                                       

Interest income

   

-

     

-

     

-

     

-

     

-

 

Interest expense

   

-

   

(4,553

)

   

-

     

-

   

(82,459

)

Gain on extinguishment of debt

   

-

   

(144

)

   

-

     

-

     

56

 

Total other expense

   

-

   

(4,697

)

   

-

     

-

   

(82,403

)

                                       

Net loss from continuing operations

 

(213,064

)

 

(42,756

)

 

(3,658

)

 

(213,064

)

 

(246,976

)

Discontinued operations

   

-

   

(1,567

)

    -      

-

   

(116,517

)

Net loss

 

(213,064

)

 

(44,323

)

 

(3,658

)

 

(213,064

)

 

(363,493

)

 
OTHER COMPREHENSIVE INCOME/(LOSS)                  

Currency translation

 

(257

)

 

(103,110

)

 

-

   

(257

)

 

(17,422

)

Net comprehensive loss

 

$

(213,321

)

 

$

(147,433

)

 

$

(3,658

)

 

$

(213,321

)

 

$

(380,935

)

                                       

Net loss per share

                                       

From continuing operations

   

-

     

-

     

n/a

     

-

   

(0.01

)

From discontinued operations

   

-

     

-

     

n/a

     

-

     

-

 

Weighted average number of shares outstanding

   

46,551,724

     

48,510,901

     

n/a

     

48,510,901

     

47,228,850

 

 

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

 

 
4

 

NOVAGEN INGENIUM, INC.

STATEMENTS OF CASH FLOWS

(Unaudited)

 

    Successor     Predecessor     Successor  
    9 Months Ended September 30,
2013
    January 1, 2012
to June 25,
2012
   

June 26, 2012
to September 30,
2012

 
             
CASH FLOWS FROM OPERATING ACTIVITIES          

Net income / (loss) – continuing operations

 

$

(246,976

)

 

(3,658

)

 

$

(213,064

)

Net income / (loss) - Discontinued operations

 

(116,517

)

           

-

 
                       
Adjustments to reconcile net loss to net cash used in operating activities:                    

Depreciation

   

568

     

-

     

-

 

Amortization of debt discount

   

52,200

     

-

         
                       

Change in operating assets and liabilities:

                       

Accounts receivable

   

7,889

   

(293

)

   

-

 

Inventory

   

-

     

3,070

         

Other current assets

   

13,042

     

3,053

     

-

 

Deferred revenue

   

20,756

     

-

     

-

 

Accounts payable and accrued expenses

   

76,217

     

5,884

     

181,615

 

Net cash provided by / (used in) operations

 

(192,821

)

   

8,056

   

(31,449

)

                       
CASH FLOWS FROM INVESTING ACTIVITIES                  

Cash divested upon sale of subsidiary to a related party

 

(3,366

)

   

-

     

-

 

Net cash used in investing activities

 

(3,366

)

           

-

 
                       
CASH FLOWS FROM FINANCING ACTIVITIES                  

Proceeds from notes payable

   

51,910

     

-

     

-

 

Proceeds from related-party notes payable

   

129,467

     

-

     

-

 

Payments on related-party notes payable

 

(3,570

)

 

(10,499

)

   

-

 

Net cash provided by/(used in) financing activities

   

177,807

   

(10,499

)

   

-

 
                       

Foreign exchange effect

   

17,422

     

-

     

31,438

 
                       

Net change in cash and equivalents

 

(958

)

 

(2,443

)

 

(11

)

Cash and equivalents, beginning of period

   

1,451

     

2,611

     

57

 

Cash and equivalents, end of period

 

$

493

     

168

   

$

246

 
                       
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                  

Cash paid for interest

 

$

527

   

$

-

   

$

-

 

Cash paid for income taxes

   

-

   

$

-

     

-

 
                       
SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITIES                

Debt conversions

 

$

94,094

   

$

-

   

$

-

 

Debt discount

   

52,200

     

-

     

-

 

Sale of subsidiary

   

264,750

     

-

     

-

 

 

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

 

 
5

 

NOVAGEN INGENIUM, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

SEPTEMBER 30, 2013

 

Note 1 – Basis of Presentation

 

Nature of Business

 

Novagen Solar Inc. (referred to herein collectively with its subsidiaries as “Novagen” and the “Company”), was incorporated in the State of Nevada, U.S.A., on June 22, 2005 under the name of Pickford Minerals, Inc. The Company’s fiscal year end is December 31. The Company was originally engaged in the exploration of mineral deposits in Labrador, Newfoundland, but was unable to implement its exploration program. In April 2009, the Company began to pursue business opportunities relating to photovoltaic solar energy. On May 12, 2009, the Company changed its name to Novagen Solar Inc.

 

On December 7, 2011, there was a change in control of the Company when Twenty Second Trust, a trust organized under the laws of the State of Queensland, Australia acquired control of the Company by purchasing 67% of the issued and outstanding shares of the Company’s common stock from shareholders of the Company. Following the change in control, the board of directors determined that the Company should expand its business to include the development of environmentally sustainable energy solutions through innovative and eco-friendly products and technologies.

 

As part of the change in control and the incorporation of the new Australian subsidiaries, the Company entered into a new development stage for accounting purposes effective from January 1, 2012.

 

On January 3, 2012, the Company formed Novagen Pty Ltd under the laws of Australia, as a wholly owned operating subsidiary. All of the Company’s operations are currently conducted through Novagen Pty Ltd. On January 17, 2012, the Company formed Novagen Productions Pty Ltd. under the laws of Australia, as a wholly owned operating subsidiary. On March 2, 2012, the Company formed Novagen Finance Pty Ltd under the laws of Australia, as a wholly owned non-operating subsidiary.

 

On June 25, 2012 the Company acquired Renegade Streetwear Pty Ltd. (“Renegade”), under the laws of Australia as a wholly owned operating subsidiary. Prior to the acquisition of Renegade Streetwear Pty Ltd the Company was a shell company.

 

Under Securities and Exchange Commission rules, when a registrant succeeds to substantially all of the business of another entity and the registrant’s own operations before the succession appear insignificant relative to the operations assumed or acquired, the registrant is required to present financial information for the acquired entity (the “Predecessor”) for all comparable periods being presented before the acquisition.

 

We are therefore providing additional information in our financial statements regarding the predecessor business for periods prior to June 25, 2012. Renegade Streetwear Pty Ltd is considered the predecessor company. The financial information in this report that relates to the predecessor company is labeled “Predecessor Business” in the financial statements.

 

Basis of Presentation

 

The interim condensed financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in U.S. Dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.

 

These statements reflect all adjustments, which in the opinion of management, are necessary for fair presentation of the information contained therein. Except as otherwise disclosed, all such adjustments are of a normal recurring nature. These interim condensed financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2012 and notes thereto included in the Company’s Annual Report on Form 10-K, filed on September 26, 2013. The Company follows the same accounting policies in the preparation of interim reports.

 

 
6

 

Note 2 – Going Concern

 

As shown in the accompanying financial statements, the Company incurred net losses from operations resulting in an accumulated deficit of $2,121,697, and a working capital deficit of $450,059. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company is currently in search of additional sources of capital to fund short term operations. The Company, however, is dependent upon its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful; therefore, without sufficient financing it would be unlikely for the Company to continue as a going concern.

 

The financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company’s ability to continue as a going concern. The financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

Note 3 – Related Party Transactions

 

During the nine months ended September 30, 2013, we had borrowings from related parties of $129,467 and repaid $3,570 to related parties.

 

On July 1, 2013, we sold our subsidiary, Novagen Pty Ltd. to a related party for AU$100 (about US$92). The effect on the financial statements was to reduce assets by US$51,394, reduce liabilities by US$307,900, reduce stockholders’ equity by $22,700, increase the foreign exchange effect by $14,456, and to record a gain of $264,750 on the sale as follows:

 

Financial Statement Item

  Financial Effect  

Assets

   

Cash and equivalents

 

$

(3,365

)

Other current assets

 

(6

)

Investments

 

(16,747

)

Property, plant and equipment

 

(35,946

)

Accumulated depreciation

   

6,981

 

Intangible assets

 

(2,309

)

Total assets

 

(51,394

)

       

Liabilities

       

Accounts payable and accrued liabilities

   

42,432

 

Notes payable

   

25,383

 

Notes payable, related parties

   

240,085

 

Deferred income

   

-

 

Total current liabilities

   

307,900

 
       

Stockholders' Deficit

       

Additional paid in capital

   

6,745

 

Accumulated loss

   

15,955

 

Total stockholders' deficit

   

22,700

 
       

Foreign exchange effect

 

(14,456

)

       

Gain on sale of Novagen Pty Ltd to related party

 

$

264,750

 

 

Because the sale was to a related party, we included the gain in Additional Paid in Capital.

 

 
7

 

Note 4 – Property, Plant and Equipment

 

As of December 31, 2012, the Company had property and equipment being depreciated over period between two to thirty-five years.

 

On July 1, 2013, we sold our subsidiary, Novagen Pty Ltd. to a related party for $100. This subsidiary contained all of our property, plant and equipment. As such, those accounts are relieved of their carrying amounts.

 

Note 5 – Notes Payable

 

During the quarter ended March 31, 2013, we issued a promissory note for AU$50,000 (US$52,200) in exchange for cash. The note bears interest at 5% on unmatured amounts and 10% on matured but unpaid amounts. It is callable by the maker at any time and can be converted into common stock at the rate of AU$0.10. We valued this beneficial conversion feature at the number of shares convertible (500,000) times the closing price of our common stock on February 27, 2013 which resulted in a value greater than the present value of the underlying promissory note. We therefore capped the value at the nominal value of promissory note and included $52,200 in interest expense for the nine months ended September 30, 2013.

 

On July 1, 2013, we sold our subsidiary, Novagen Pty Ltd. to a related party. Included in the assets and liabilities assumed by the buyer were AU$27,500 (US$25,770) of promissory notes which have been removed from the consolidated accounts of the Company as of September 30, 2013.

 

Note 6 – Stockholders’ Equity

 

During the nine months ended September 30, 2013, we issued 1 million shares each to Rubyden Pty Ltd., and Jennifer Mewett Pty Ltd. to convert their debt balances to equity. We valued the shares at their grant date fair value of $94,094.

 

Note 7 – Subsequent Events

 

On October 11, 2013, the Company acquired certain plant and equipment in exchange for AU$270,000 (approximately US$239,563) plus 270,000 shares of the Company common stock.

 

On August 1, 2014, we entered into a written agreement with Stuart Campbell to exchange one stock motorcycle for three utility trucks equipped for traffic control work.

 

 
8

  

Item 2. Management’s Discussion and Analysis or Plan of Operation.

 

This report on form 10−Q contains forward-looking statements. Our actual results could differ materially from those set forth as a result of general economic conditions and changes in the assumptions used in making such forward-looking statements. The following discussion and analysis of our financial condition and results of operations should be read together with the financial statements and accompanying notes and the other financial information appearing elsewhere in this report. The analysis set forth below is provided pursuant to applicable Securities and Exchange Commission regulations and is not intended to serve as a basis for projections of future events.

 

Overview

 

Novagen Solar Inc. (hereinafter, the “Company”), was incorporated in the State of Nevada, U.S.A., on June 22, 2005 under the name of Pickford Minerals, Inc. The Company’s fiscal year end is December 31. The Company was originally engaged in the exploration of mineral deposits in Labrador, Newfoundland, but was unable to implement its exploration program. In April 2009, the Company began to pursue business opportunities relating to photovoltaic solar energy. On May 12, 2009, the Company changed its name to Novagen Solar Inc.

 

On December 7, 2011, there was a change in control of the Company when Twenty Second Trust, a trust organized under the laws of the State of Queensland, Australia acquired control of the Company by purchasing 67% of the issued and outstanding shares of the Company’s common stock from shareholders of the Company. Following the change in control, the board of directors determined that the Company should expand its business to include the development of environmentally sustainable energy solutions through innovative and eco-friendly products and technologies.

 

On January 3, 2012, the Company formed Novagen Pty Ltd. under the laws of Australia, as a wholly owned operating subsidiary. Novagen Pty Ltd is engaged in the manufacture and distribution of products for commercialization in the area of solar energy and other clean technologies including low carbon emission engines. Novagen Pty Ltd operates from leased premises situated at Helensvale, Queensland for use as a workshop and employs seven full time employees, including qualified mechanics, machinists, a draughtsman and administrative support.

 

On January 17, 2012, the Company formed Novagen Productions Pty Ltd under the laws of Australia, as a wholly owned non-operating subsidiary.

 

On March 2, 2012, the Company formed Novagen Finance Pty Ltd under the laws of Australia as a wholly owned operating subsidiary. Novagen Finance Pty Ltd operates as an internal finance company for Novagen Solar Inc. and its wholly owned subsidiaries.

 

On June 25, 2012, the Company acquired all the outstanding capital stock of Renegade Streetwear Pty Ltd, an Australian corporation ("Renegade"), for an aggregate of 400,000 shares of the Company’s common stock. Renegade is in the business of design, manufacture and distribution of V-Twin engines, custom motorcycles and related urban clothing under the Renegade brand. Management believes that the acquisition of Renegade will enable the Company to accelerate its development of products and services that provide clean technology solutions for today’s global challenges.

 

On September 27, 2012, the Company acquired all the issued and outstanding shares of Y Engine Developments Pty Ltd, a development stage Australian company (hereunder “Y Engine Developments”), from Michael Nugent, who is also the President and a director of Novagen. Y Engine Developments owns all rights in and to an opposing piston divaricate cylinder twin crank journal reciprocating piston engine. Y Engine Developments will continue to operate as a wholly owned subsidiary of Novagen, developing engines utilizing advances in bio fuel technologies.

 

 
9

 

Our currently available capital and cash flow has been generated through share subscriptions and loans from management and non-affiliated third parties and it is our management’s intention that this will continue until the Company earns sufficient revenue to be self-sustaining.

 

Our ultimate success will depend upon our ability to raise capital including joint venture projects and debt or equity financings. Future financings through equity investments are likely to be dilutive to existing stockholders. Also, the terms of securities we may issue in future capital transactions may be more favorable for our new investors. Newly issued securities may include preferences, superior voting rights, and the issuance of warrants or other derivative securities, which may have additional dilutive effects. Further, we may incur substantial costs in pursuing future capital and financing, including investment banking fees, legal fees, accounting fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible notes and warrants, which will adversely impact our financial condition.

 

Our ability to obtain needed financing may be impaired by such factors as the capital markets, both generally and specifically in the renewable energy industry, and the fact that we have not been profitable, which could impact the availability or cost of future financings.

 

Results of Operations

 

The following is a discussion and analysis of our results of operations for the six- and three-month period ended September 30, 2013, and the factors that could affect our future financial condition. This discussion and analysis should be read in conjunction with our financial statements and the notes thereto included elsewhere in this report. Our financial statements are prepared in accordance with United States generally accepted accounting principles. All references to dollar amounts in this section are in United States dollars unless expressly stated otherwise.

 

Nine Months Ended September 30, 2013 versus 2012

 

Comparison figures for 2012 in this section is the sum of (a) the period from January 1, 2012 to June 25, 2012 for the predecessor and (b) the period from June 26, 2012 to September 30, 2012 for the post-acquisition successor.

 

Revenues and cost of sales:

 

On a post-acquisition basis, we generated $27,694 in revenues and $27,988 in cost of sales for the nine months ended September 30, 2013 versus revenues and cost of revenues for the same period in 2012 of $3,617 and $1,458, respectively.

 

General and administrative expenses:

 

General and administrative expenses totaled $163,711 for the post-acquisition successor for the nine months ended September 30, 2013 versus $194,572 for the same period in 2012.

 

 
10

 

Depreciation, depletion and amortization:

 

Depreciation, depletion and amortization was $568 for the nine months ended September 30, 2013 versus $24,309 for the same period in 2012. The decrease is due to the liquidation of our property, plant and equipment when we sold our subsidiary Novagen Pty Ltd.

 

Interest expense and interest income:

 

Interest expense was $82,459 for the nine months ended September 30, 2013 versus zero for the same period in 2012. The increase is due to an increase in total debt and our inclusion in 2013 of the amortization of the discount on the convertible note (see Note 5).

 

Currency translation and net comprehensive income:

 

The effect of translating the Australian dollar accounts into US dollar accounts was a negative $17,422 for the nine months ended September 30, 2013 and a negative $257 for the same period in 2012.

 

Three Months Ended September 30, 2013 versus 2012

 

Revenues and cost of sales:

 

On a post-acquisition basis, we generated $1,964 in revenues and $1,810 in cost of sales for the three months ended September 30, 2013 versus $3,367 and $0 for the same period in 2012.

 

General and administrative expenses:

 

General and administrative expenses totaled $38,213 for the three months ended September 30, 2013 versus $192,122 for the same period in 2012.

 

Depreciation, depletion and amortization:

 

Depreciation, depletion and amortization was $0 for the three months ended September 30, 2013 and $24,309 for the same period in 2012.

 

Interest expense:

 

Interest expense was $4,553 for the three months ended September 30, 2013 and $0 for the same period in 2012.

 

Currency translation and net comprehensive income:

 

The effect of translating the Australian dollar accounts into US dollar accounts was a negative $103,110 for the three months ended September 30, 2012 a negative $257 for the same period in 2012.

 

 
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Liquidity and Capital Resources

 

Our principal source of operating capital has been provided from unrelated and related-party debt financing. At September 30, 2013, we had negative working capital of $450,059 and negative cash flows from operations of $192,821 for the nine months ended September 30, 2013. As we continue to develop our business and attempt to expand operational activities, we expect to continue to experience net negative cash flows from operations in amounts not now determinable. We will be required to obtain additional financing to fund operations through common stock offerings and debt borrowings to the extent necessary to provide working capital. We have and expect to continue to have substantial capital expenditure and working capital needs. We do not now have funds sufficient to fund our operations at their current level for the next twelve months. We need to raise additional cash to fund our operations and implement our business plan. We expect that the additional financing will (if available) take the form of a private placement of equity, although we may be constrained to obtain additional debt financing in lieu thereof. We are maintaining an ongoing effort to locate sources of additional funding, without which we will not be able to remain a viable entity. There are no assurances that we will be able to obtain adequate financing to fund our operations. If we are able to obtain the financing required to remain in business, eventually achieving operating profits will require substantially increasing revenues or drastically reducing expenses from their current levels or both. If we are able to obtain the required financing to remain in business, future operating results depend upon a number of factors that are outside of our control.

 

Our ability to continue as a going concern is dependent on our ability to generate sufficient cash from operations to meet our cash needs and/or to raise funds to finance ongoing operations and repay debt. There can be no assurance, however, that we will be successful in our efforts to raise additional debt or equity capital and/or that our cash generated by our future operations will be adequate to meet our needs. These factors, among others, indicate that we may be unable to continue as a going concern for a reasonable period of time.

 

Off-Balance Sheet Arrangements

 

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company.

 

Item 3. Quantitative and Qualitative Disclosure about Market Risk.

 

Smaller reporting companies are not required to provide the information required by this Item.

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(f) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, in consideration of the fact that the Company has no employees besides the President and Chief Executive Officer, the officer concluded that the Company’s disclosure controls and procedures are not effective at September 30, 2013 or December 31, 2012. Through the use of external consultants, the Company believes that the financial statements and the other information presented herewith are not materially misstated.

 

Inherent Limitations of Internal Controls

 

Our Principal Executive Officer does not expect that the Company’s disclosure controls and procedures or the Company’s internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. 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 the controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 
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PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

None.

 

Item 1A. Risk Factors.

 

Smaller reporting companies are 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.

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

 
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Item 6. Exhibits.

 

Exhibit No.

 

Document Description

   

3.1

 

Amended Articles of Incorporation, Novagen Ingenium Inc (incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012).

   

3.2

 

Amended and Restated Bylaws, Novagen Ingenium Inc (incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012)

   

31.1

 

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

   

32.1

 

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

   

Exhibit 101 

 

The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, formatted in XBRL: (i) Consolidated Statements of Cash Flows, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Balance Sheets, and (v) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags.

 

 
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SIGNATURE

 

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 hereunto duly authorized.

 

 

 

NOVAGEN INGENIUM, INC.

 

 

 

Date: October 27, 2014

By:

/s/ Micheal P. Nugent

 

 

 

Micheal P. Nugent

Principal Executive Officer

 
   

Date: October 27, 2014

By:

/s/ Micheal P. Nugent

 

 

 

Micheal P. Nugent

Principal Financial Officer

 

 

 

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