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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, 2014

 

¨

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

 

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 x No ¨

 

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

¨

Accelerated filer

¨

Non-accelerated filer

¨

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 ¨ 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 ¨ No ¨

 

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 13, 2014

Common Stock, $0.001

 

88,650,000

  

 

 

NOVUS ROBOTICS INC.

 

Form 10-Q

 

PART I. FINANCIAL INFORMATION

     
         

Item 1.

Financial Statements (unaudited)

   

4

 
 

Balance Sheets

   

4

 
 

Statements of Operations

   

5

 
 

Statements of Cash Flows

   

6

 
 

Notes to Financial Statements

   

7

 
           

Item 2.

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

   

12

 
           

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

   

23

 
           

Item 4.

Controls and Procedures

   

23

 
           

PART II. OTHER INFORMATION

       
           

Item 1.

Legal Proceedings

   

25

 
           

Item 1A.

Risk Factors

   

25

 
           

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

   

25

 
           

Item 3.

Defaults Upon Senior Securities

   

25

 
           

Item 4.

Mine Safety Disclosures

   

25

 
           

Item 5.

Other Information

   

25

 
           

Item 6.

Exhibits

   

26

 

  

 
2

 

 

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.

 

 

 
3

 

 

PART I

 

ITEM 1. FINANCIAL STATEMENTS

 

NOVUS ROBOTICS INC.

CONSOLIDATED FINANCIAL STATEMENTS

 

SEPTEMBER 30, 2014

(Unaudited)

 

NOVUS ROBOTICS INC.
Consolidated Balance Sheets
(Unaudited)

 

    September 30,
2014
    December 31,
2013
 
         
ASSETS        
Current assets        
Cash   $ 788,265     $ 885,407  
Amounts receivable     224,090       289,504  
Inventory     657,512       300,866  
Taxes recoverable     18,107       26,633  
Security deposits     13,459       14,183  
Prepaid expense     3,182       156  
Total current assets     1,704,615       1,516,749  
               
Fixed assets                
Fixed assets, net of deprecation     180,759       211,282  
Total assets   $ 1,885,374     $ 1,728,031  
               
LIABILIITIES                
Current liabilities                
Accounts payable and accrued expenses   $ 200,577     $ 323,427  
Convertible note payable     185,600       185,600  
Deferred revenue     684,779       320,336  
Warranty provision     12,665       19,327  
Total current liability     1,083,621       848,690  
Total liability     1,083,621       848,690  
               
STOCKHOLDERS' EQUITY                
Preferred Stock                
     50,000,000 shares authorized with a par value of $0.001; 0 issued and outstannding                
Series A - 100 designated, none outstanding     -       -  
Series B - 49,999,900 designated, none outstanding     -       -  
Common Stock                
     500,000,000 shares authorized with a par value of $0.001, 88,650,000 issued and outstanding (December 31, 2013 - 88,650,000 common shares)     88,650       88,650  
Accumulated other comprehensive income (loss)   (116,360 )     24,280  
Retained earnings     829,463       766,411  
Total stockholders' equity     801,753       879,341  
               
Total liabilities and stockholders' equity   $ 1,885,374     $ 1,728,031  

 

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

 

 
4

 

NOVUS ROBOTICS INC.
Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited)

  

  For the Three Months Ended
September 30,
  For the Nine Months Ended
September 30,
 
  2014     2013     2014     2013  
               
Revenue   $ 752,121     $ 57,019     $ 1,246,518     $ 1,562,971  
Cost of sales     112,143       44,762       419,934       905,836  
Gross Profit     639,978       12,257       826,584       657,135  
                               
Expenses                                
Compensation     313,689       67,508       625,292       175,818  
Occupancy costs     18,120       54,431       58,325       96,640  
Travel     11,743       4,921       35,476       52,361  
Professional fees     11,738       12,456       52,530       98,025  
Communication     4,336       4,883       12,948       13,803  
Office and general     17,423       7,704       42,514       33,009  
Foreign exchange gain   (31,032 )   (26,943 )   (74,691 )   (56,018 )
Total operating expenses     346,018       124,960       752,395       413,638  
                               
Income (loss) from operations     293,959     (112,703 )     74,188       243,497  
Interest on convertible debentures     3,712       3,711       11,136       11,135  
Income before taxes     290,247     (116,414 )     63,052       232,362  
Income tax expense (benefit)     -     (72,420 )     -       40,752  
Net income (loss)     290,247     (43,994 )     63,052       191,610  
                               
Other comprehensive loss                                
Foreign exchange adjustment   (89,651 )   (17,737 )   (140,640 )   (22,782 )
                               
Comprehensive income (loss)   $ 200,596     $ (61,731 )   $ (77,588 )   $ 168,828  
                               
Basic and diluted income (loss) per shares   $ 0.00       -$ 0.00     $ 0.00     $ 0.00  
                               
Weighted average number of shares outstanding - basic and diluted     88,650,000       88,650,000       88,650,000       88,650,000  

 

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

 

 
5

 

NOVUS ROBOTICS INC.
Consolidated Statements of Cash Flows
(Unaudited)

  

  For The Nine Months Ended
September 30,
 
    2014     2013  
Cash flow from operating activities        
Net income   $ 63,052     $ 191,610  
Adjustments to reconcile net income (loss) to net cash provided by operating activities:                
Depreciation     30,999       33,133  
Changes in operating assets and liabilities                
Decrease (increase) in accounts receivable     65,414       178,587  
Decrease (increase) in inventory   (356,646 )   (584,535 )
Decrease (increase) in prepaid expenses   (3,026 )     1,581  
Decrease (increase) in security deposits     724       493  
Increase (decrease) in accounts payable and accrued expense   (122,850 )   (137,753 )
Increase (decrease) in deferred revenue     364,443       662,111  
Increase (decrease) in warranty payable   (6,662 )   (37,704 )
Increase (decrease) in taxes recoverable/payable     8,526     (50,694 )
Net cash provided by operating activities     43,974       256,829  
               
Cash Flow from investing activity                
Purchase of fixed assets   (10,509 )   (91,618 )
Net cash used in investing activity   (10,509 )   (91,618 )
               
Effect of foreign exchange rate on changes in cash   (130,607 )   (22,782 )
               
Increase (decrease) in cash   (97,142 )     142,429  
               
Cash, beginning of period     885,407       921,332  
               
Cash, end of period   $ 788,265     $ 1,063,761  

 

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

 

 
6

 

NOVUS ROBOTICS INC.

Notes to Interim Consolidated Financial Statements  

September 30, 2014


 

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 between Novus and D&R Technologies Inc. (“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.  SIGNIFICANT ACCOUNTING POLICIES


 

Basis of presentation

 

The consolidated financial information furnished herein reflects all adjustments, which, in the opinion of management, are necessary to fairly state the Company's financial position and the results of its operations for the periods presented.

 

These 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.

 

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.

 

 
7

  

NOVUS ROBOTICS INC. 

Notes to Interim Consolidated Financial Statements  

September 30, 2014


 

2. SIGNIFICANT ACCOUNTING POLICIES - continued


 

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.

 

Warranty provision

 

In assessing the warranty provision, management makes estimates related to expectations of future repair cost needed to service new seat frame sales under its two year warranty terms. These determinations and their individual assumptions require that management make a decision based on the best available information at each reporting period

 

Long-lived Assets

 

In accordance with the Financial Accounting Standards Board ("FASB") SFAS No. 144, "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, 2014, 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, 2014, the Company’s accounts are insured for $100,000 CDN by Canadian Deposit Insurance Corporation for Canadian bank deposits and are insured for $250,000 by FDIC for US bank deposits.

 

 
8

  

NOVUS ROBOTICS INC. 

Notes to Interim Consolidated Financial Statements  

September 30, 2014


 

2.  SIGNIFICANT ACCOUNTING POLICIES - continued


 

Factoring Agreement and Accounts Receivable

 

The Company has a financing agreement that included a non-recourse factoring arrangement that provides nonrecourse factoring on the Company’s receivable from its primary customer Johnson Controls, Inc. The factor is based on credit approved orders, assumes the accounts receivable risk of the Company’s customer in the event of insolvency or non-payment. The Company assumes the risk on accounts receivable not factored to which is shown as accounts receivable on the accompanying balance sheets. As of September 30, 2014 and December 31, 2013, factored accounts receivable were $582,184 and $225,955, respectively. Loss on sale of factored receivable for the period ended September 30, 2014 and 2013 was $11,627 and $3,281 respectively and are included in office and general expense.

 

Allowance for Doubtful Accounts

 

The Company extends credit to customers in the normal course of business. The allowance for doubtful accounts represents the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on specific customer information, historical write-off experience and current industry and economic data. Account balances are charged off against the allowance when the Company believes it is probable the receivable will not be recovered. Management believes that there are no concentrations of credit risk for which an allowance has not been established. Although management believes that the allowance is adequate, it is possible that the estimated amount of cash collections with respect to accounts receivable could change. As of September 30, 2014 and December 31, 2013, the Company has not deemed any accounts uncollectible.

 

Inventory

 

Inventory is stated at the lower of cost or market using the first-in, first-out (“FIFO”) method. Cost of work in progress and finished goods includes raw materials, direct labor and indirect manufacturing costs. 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

 

Delivery trucks

   

5 years

 

Shop and Machinery equipment

   

5 to 10 years

 

  

 
9

 

NOVUS ROBOTICS INC.

Notes to Interim Consolidated Financial Statements  

September 30, 2014


 

2.  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 Canadian dollar. Transactions in foreign currency are translated into Canadian dollars then translated into U.S. dollars for reporting in accordance with the ASC 830-30 as follows:

 

·

For assets and liabilities, the exchange rate at the balance sheet date shall be used.

 

 

·

For revenues, expenses, gains, and losses, the exchange rate at the dates on which those elements are recognized shall be used.

  

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

 

Financial Instruments

 

The carrying values of the Company’s financial instruments, which comprise cash, accounts receivable, accounts payable, payroll liabilities, loan 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 values 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 70, 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.

 

 
10

  

NOVUS ROBOTICS INC.

Notes to Interim Consolidated Financial Statements  

September 30, 2014


 

2.  SIGNIFICANT ACCOUNTING POLICIES - continued


 

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 on a percentage of completions basis and when collection of the resulting receivable is reasonably assured.

 

1.

Spare parts – Revenues and cost of sales are recognized at the time of sale.

2.

Service – Revenues and cost of sales 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. As of September 30, 2014 and December 31, 2013 customer deposits were $684,779 and $320,336, respectively.

 

D&R provides standard warranties for its product from the date of shipment. Estimated warranty obligations are recorded at the time of sale. Estimated warranty obligations are recorded at the time of sale and amortized over the two year warranty period. As of September 30, 2014 and December 31, 2013, warranty liability was $12,665 and $19,327, respectively.

 

Earnings per Common Share

 

Net income per share is provided in accordance with ASC 260-10, “Earnings per Share”. We present basic income per share (“EPS”) and diluted EPS the face of the statement of operations. 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-diluted 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, 2014, the Company has outstanding convertible debt that may dilute common stock an additional 37,120,000 shares.

 

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

 

There have been no recent accounting pronouncements or changes in accounting pronouncements that impacted fiscal year 2014, or which are expected to impact future periods, that were not already adopted and disclosed in prior periods.

 

 
11

  

NOVUS ROBOTICS INC.

Notes to Interim Consolidated Financial Statements  

September 30, 2014


 

3. CONVERTIBLE NOTES PAYABLE


 

Due to the share exchange agreement referenced in note 1, on January 27, 2012, the Company assumed convertible notes payable and accrued interest totaling $185,600. This total relates to three separate convertible notes payable to unrelated parties. The convertible notes are unsecured, due on demand, accrue interest at the rate of 8.0% per annum, and are convertible into shares of our restricted common stock at the rate of $0.005 per share. The convertible notes were assigned and are now payable to Bernardino Paolucci, CEO on January 2, 2013. The Company recognized $11,136 and $11,135 in interest expense during the nine months ended September 30, 2014 and 2013.

 

4.  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 year ended December 31, 2013 more than 58% sales and receivables was to this entity. During the first three quarters of 2014, the Company was dependent on JCI for its business of which completed sales and receivables are anticipated to be 75% and 90% respectively.

 

5.  LEASES AND OTHER COMMITMENTS


 

The Company leases premises totaling 18,000 square feet with monthly lease payments of approximately $8,400 per month expiring on July 31, 2016.

 

As at September 30, 2014, the aggregate minimum annual lease payments under operating leases were as follows:



2014

 

$

25,200

 

2015

 

$

100,800

 

2016

 

$

58,800

 
 

$

183,800

 

  

 
12

    

  

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.

 

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

 

Share Exchange Agreement

 

Ecoland International, Inc., now known as Novus Robotics Inc., 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”) entered into that certain share exchange agreement dated January 27, 2012 (the “Share Exchange Agreement”). 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 our restricted common stock to the D&R Shareholders (which consisted of Messrs. Paolucci and Karanovic and D Mecatronics, which is holding the shares for the benefit of the remaining shareholders of D&R Technology) in exchange for 100% of the total issued and outstanding shares of D&R Technology, thus making D&R Technology its 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. D&R Technology was previously the wholly-owned subsidiary of D Mecatronics Inc., a Delaware corporation. On approximately November 10, 2011, D Mecatronics spun-off D&R Technology. D&R Technology subsequently issued shares of its restricted common stock to the shareholders of D Mecatronics on a pro-rata basis in accordance with their respective equity holdings in D Mecatronics. The equity percentages regarding the issuance of shares by D&R Technology were 48% to Berardino Paolucci, 24% to Drasko Karanovic and 28% to various shareholders (which shares were previously held by D Mecatronics on behalf of these shareholders).

 

 
13

  

Escrow Agreement

 

On June 4, 2013, our Board of Directors authorized the execution of that certain escrow agreement dated June 4, 2013 (the "Escrow Agreement") with Manhattan Transfer Registrar Co., our transfer agent ("Manhattan Transfer").

 

As disclosed in previous filings with the Securities and Exchange Commission, on approximately November 10, 2011, D Mecatronics Inc. ("D Mecatronics") spun-off our wholly-owned subsidiary, D&R Technology. D&R Technology subsequently issued shares of its restricted common stock to the shareholders of D Mecatronics on a pro-rata basis in accordance with their respective equity holdings in D Mecatronics. The equity percentages regarding the issuance of shares by D&R Technology were 48% to Berardino Paolucci, 24% to Drasko Karanovic and 28% to various shareholders (which shares were being held by D Mecatronics on behalf of these shareholders). The transfer agent for D Mecatronics at the time of the spin-off was Global Sentry Equity Transfer Inc. ("Global Sentry"). At the time of the spin-off, management of D Mecatronics had attempted on several occasions to contact Global Sentry with regards to its shareholder list and records. However, any and all attempts were to no avail. To date, D Mecatronics has not been able to obtain any of its records, including a shareholders list, from Global Sentry. Management has no knowledge or information as to the whereabouts of Global Sentry or its management nor of the location of its records and shareholders list. This has impeded the issuance of the shares of D&R Technology to the appropriate 28% minority shareholders of D Mecatronics and thus the reason why D Mecatronics was holding the shares in trust for the benefit of its shareholders.

 

Subsequently, we entered into the Share Exchange Agreement. Our Board of Directors had 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 our restricted common stock to the D&R Shareholders (which consisted of Messrs. Paolucci and Karanovic and D Mecatronics, which held the shares for the benefit of the remaining shareholders of D&R Technology) in exchange for 100% of the total issued and outstanding shares of D&R Technology, thus making D&R Technology our wholly-owned subsidiary. The Board of Directors deemed it in the best interests of the 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.

 

The majority shareholders of D&R Technology approved the Share Exchange Agreement as did its Board of Directors. The Board of Directors of D&R Technology resolved in its board resolutions to issue to D Mecatronics the 16,520,000 shares to be issued to the missing 28% minority shareholders of D&R Technology (who are also the unknown shareholders of D Mecatronics). Therefore, D Mecatronics held in trust and for the benefit of its unknown shareholders (and as shareholders of D&R Technology) the shares to be issued to them by the Company. D Mecatronics is in the process of attempting to locate the transfer agent in order to obtain its records.

 

We are and have been in the process of locating the missing shareholders of D Mecatronics (and also as shareholders of D&R Technology) to whom our shares should be issued in accordance with the terms and provisions of the Share Exchange Agreement. Therefore, we entered into the Escrow Agreement. In accordance with the terms and provisions of the Escrow Agreement, D Mecatronics returned to Manhattan Transfer the share certificate evidencing the shares of our common stock issued to it as trustee. A new share certificate was issued to Manhattan Transfer as trustee in the aggregate denomination of 16,520,000 shares to be held in escrow. We have placed on our website www.novusrobotics.com under "Investor Relations" contact information to be used by persons/entities that believe they were shareholders of D Mecatronics. Such individuals/entities should contact our management

 

Manhattan Transfer and the Company used its best efforts to create a shareholders list (the "Shareholders List") indicating each record owner of the shares. As of the date of this Quarterly Report, Manhattan Transfer believes it appropriate that the shares should be released to this individuals named on the Shareholders List. Therefore, as of the date of this Quarterly Report, Manhattan Transfer is releasing shares of our restricted common stock to each of the persons indicated on the Shareholders List in accordance with the terms and provisions of the Escrow Agreement. We have indemnified and are holding harmless Manhattan Transfer in the delivery of these shares.

 

 
14

  

CURRENT BUSINESS OPERATIONS

 

We are involved in the area of engineering, design and manufacture of robotics and automation technology solutions for tube bending machines, 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 through its automated tube bending machines which we design, engineer and build for the automotive industry to solve its 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 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. As of the date of this Annual Report, we have not generated any revenue from the medical robotics, personal robotic devices, water treatment industry, food handling and processing, clean technology and energy or pharmaceutical and general consumer goods production.

 

We are involved in the area of engineering, design and the manufacturing of automated solutions through its automated tube bending machines for the automotive industry and intends 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. We purchase from third parties components for the electrical cabinet, which creates the automation and controls section of the machinery. The electrical cabinet consists of fuses, holders, relays, cables, wiring, controls and sensors, which we purchase from our suppliers, i.e. Gerrie Electric, Beckhoff, Allen Bradley and others. We integrate these purchased parts from our suppliers into our electrical and controls design to make the automated tube bending machines operational. We provide all the programming of the electrical cabinet as well. The computer programming is based upon the specific needs.

 

Our business is in the early development and operating stages. To date, our primary activities include designing and installation of retrofits to existing automated systems, automated spare parts for our tube bending machines, automated 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.

 

We are a full service provider of turn-key production solutions, specializing in tubular components for our tube bending machines. Our experience is firmly rooted in fabrication solutions for automated components, such as seat frames and instrument panel beams. Our expertise is in the areas of automation and machinery for computer numerical control (CNC ) bending, forming, piercing and laser cutting, which is applicable to a wide range of production solutions. We produce spare parts for the manufacturing equipment we design. We do not produce spare parts for automobiles.

 

MANAGEMENT DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS

 

RESULTS OF OPERATION

 

Overview

 

We, through our wholly owned subsidiary D&R Technology Inc., are involved in the engineering, design and manufacture 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.. Serving as a comprehensive engineering partner, we work with other leading robotic manufacturers to provide the best automation technologies providing automation solutions to a wide spectrum of customers and industries ranging from large Fortune 500 companies to small privately-held businesses. The automated solutions can be found in manufacturing, assembly and processing lines throughout the United States, Canada, Mexico and South America. D&R Technology Inc. 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 water treatment industry. As of the date of this Quarterly Report, we have not realized any revenue from the medical robotics, personal robotic devices or water treatment industry.

 

 
15

  

We are involved in the area of engineering, design and the manufacturing of automated solutions through our automated tube bending machines for the automotive industry and 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. We purchase from third parties components for the electrical cabinet, which creates the automation and controls section of the machinery. The electrical cabinet consists of fuses, holders, relays, cables, wiring, controls and sensors, which we purchase from our suppliers, i.e. Gerrie Electric, Beckhoff, Allen Bradley and others. We integrate these purchased parts from our suppliers into our electrical and control design to make the automated tube bending machines operational. We provide all the programming of the electrical cabinet as well. The computer programming is based upon the specific needs.

 

Our business is in its early development and operating stages. To date, our primary activities include designing and installation of retrofits to existing automated systems, automated spare parts for our tube bending machines, automated 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.

 

We are a full service provider of turn-key production solutions, specializing in tubular components for its tube bending machines. Our experience is firmly rooted in fabrication solutions for automated components, such as seat frames and instrument panel beams. Our expertise is in the areas of automation and machinery for computer numerical control (‘CNC’) bending, forming, piercing and laser cutting, which is applicable to a wide range of production solutions. We produce spare parts for the manufacturing equipment we design. We do not produce spare parts for automobiles.

 

    For the Three Months Ended
September 30,
  For the Nine Months Ended
September 30,
 
    2014     2013     2014     2013  
                 

Revenue

 

$

752,121

   

$

57,019

   

$

1,246,518

   

$

1,562,971

 

Cost of sales

   

112,143

     

44,762

     

419,934

     

905,836

 

Gross Profit

   

639,978

     

12,257

     

826,584

     

657,135

 
                               

Expenses

                               

Compensation

   

321,070

     

67,508

     

632,673

     

175,818

 

Occupancy costs

   

18,120

     

54,431

     

58,325

     

96,640

 

Travel

   

11,743

     

4,921

     

35,476

     

52,361

 

Professional fees

   

11,738

     

12,456

     

52,530

     

98,025

 

Communication

   

4,336

     

4,883

     

12,948

     

13,803

 

Office and general

   

17,423

     

7,704

     

42,514

     

33,009

 

Foreign exchange gain

 

(31,032

)

 

(26,943

)

 

(74,691

)

 

(56,018

)

Total operating expenses

   

346,018

     

124,960

     

752,395

     

413,638

 
                               

Income (loss) from operations

   

293,959

   

(112,703

)

   

74,188

     

243,497

 

Interest on convertible debentures

   

3,712

     

3,711

     

11,136

     

11,135

 

Income before taxes

   

290,247

   

(116,414

)

   

63,052

     

232,362

 
                               

Income tax expense (benefit)

   

-

   

(72,420

)

   

-

     

40,752

 

Net income (loss)

   

290,247

   

(43,994

)

   

63,052

     

232,362

 
                               

Other comprehensive loss

                               

Foreign exchange adjustment

 

(89,651

)

 

(17,737

)

 

(140,461

)

 

(22,782

)

                               

Comprehensive income (loss)

 

$

200,596

   

$

(61,731

)

 

$

(77,588

)

 

$

168,828

 

  

 
16

 

The financial information in the table above is derived from the quarterly unaudited financial statements. The following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere in this Current Report on Form 10-Q. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. The Corporation’s actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this Current Report on Form 10-Q. The financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

 

Nine Month Period Ended September 30, 2014 Compared to Nine Month Period Ended September 30, 2013

 

Revenue. We generated revenue during the nine month period ended September 30, 2014 in the amount of $1,246,518 compared to $1,562,971 generated during the nine month period ended September 30, 2013 (a decrease of $316,453. Overall, revenue decreased 20% from 2013 to 2014 due primarily to the price point on machines sold during the nine month period ended September 2013 as compared to the nine month period ended September 30, 2014 of approximately a $700,000 difference. However, this price point deduction was offset by completion of the retooling work that increased sales in this area by $400,000. The trend experienced during the nine month period ended September 30, 2013 continued during the nine month period ended September 30, 2014 as efficiencies in the machines and repairs completed in the prior year resulted in fewer spare parts and service revenue.

 

Major components of the revenue mix for change from September 30, 2013 to September 30, 2014 are as follows:

 

 

a.

Prototypes Parts – increased $40,000 as we replenished the inventory for JCI Mexico and JCI Michigan.

 

 

 
 

b.

Spare Parts – decreased $50,000 for parts required by many customers including JCI, Toyota, PWO – Kitchener, Van Rob – Mexico and M.I.G. – Athens to replace worn parts. The trend of fewer spare parts being requested from existing customers continued in the first three quarters of 2014 as the existing machines continued to operate efficiently.

 

 

 
 

c.

Retrofit Systems – increase of $400,000. We assess old machines and recommend that specified work needs to be done on them. This includes all mechanical , electrical, hydraulic and pneumatics as required. We then replace worn parts on old benders – overhauled benders for JCI- Lakewood Bender #2, MIG-Athens, PWO - Kitchener, JCI-Athens and JCI-Ramos move machines for customers, install additional tooling units on existing benders. Retooling work for JCI Plymouth, Honda and Toyota was completed in the quarter, a significant increase over the prior year.

 

 

 
 

d.

Seat Frame System – decrease of $702,000. While one machine was completed in each of the first nine months of 2013 and 2014, the selling price was considerably lower in the current year versus 2013.

 

 

 
 

e.

Medical robotics, personal robotic devices and water treatment industry – We have not generated revenue from these sources as yet and will continue to investigate opportunities in these areas to augment its core business.

   

 
17

 

Cost of sales: During the nine month period ended September 30, 2014, cost of sales was $419,934 compared to $905,836 during the nine month period ended September 30, 2013 (a decrease of $485,902. The change in products sold in the nine month period ended September 30, 2014 contributed to a increase in our gross margin by approximately 24% over the nine month period ended September 30, 2013. During the nine month period ended September 30, 2014, we experienced significant revenue from retrofit systems for which the customers bear the majority of the cost. Revenue in this area increased considerably in 2014. The primary revenue source as noted above was the completion a seat frame system with respective parts and labor costs associated therein.

 

Gross Profit. Thus, based on the above, our gross profit increased to $826,584 during the nine month period ended September 30, 2014 from $657,135 during the nine month period ended September 30, 2013.

 

Operating expenses: During the nine month period ended September 30, 2014, we incurred operating expenses in the amount of $752,395 compared to operating expenses incurred during the nine month period ended September 30, 2013 of $413,638 (an increase of $338,757). Operating expenses include: (i) compensation of $625,292 (2013: $175,818; (ii) occupancy costs of $58,325 (2013: $96,640); (iii) travel of $35,476 (2013: $52,361); (iv) professional fees of $52,530 (2013: $98,025); (v) communication of $12,948 (2013: $13,803); (vi) office and general of $42,514 (2013: $33,009); and (vii) foreign exchange gain of ($74,691) (2013: ($56,018)). In respect of compensation, fewer labour charges were capitalized to the work in process projects during the nine month period ended September 30, 2014 compared to the nine month period ended September 30, 2013 due to the timing and completion of specific projects resulting in an additional $257,000 being charged in 2014. However, a lower management bonus charged during the nine month period ended September 30, 2013 compared to the nine month period ended September 30, 2014, which was paid in lieu of salary, resulted in administrative wages increasing $200,000 during the nine month period ended September 30, 2013. Occupancy costs decreased $40,000. In 2013, the plant was relatively idle during the nine month period ended September 30, 2013, which resulted in a larger amount of occupancy costs being expensed during the nine month period ended September 30, 2013 compared to the nine month period ended September 30, 2014. Travel decreased by $17,000 as the efforts to source new customers and opportunities explored during the nine month period ended September 30, 2013 were not undertaken in the same time period in 2014. Professional fees also decreased by $45,000 during the nine month period ended September 30, 2014 as compared to the nine month period ended September 30, 2013 due to costs increased efficiencies associated with the ongoing audits and quarterly reviews by the external accountants and assistance provided by legal counsel.

 

Foreign exchange: The continued weakening Canadian dollar in 2014 against the United States dollar resulted during the nine month period ended September 30, 2014 in a foreign exchange gain of $74,691 on denominations transacted and settled in foreign currencies, primarily being sales to the United States from which the monies are being converted and used to satisfy Canadian dollar operational requirements.

 

Income from Operations. Thus, this resulted in income from operations of $74,188 during the nine month period ended September 30, 2014 compared to income from operations of $243,497 during the nine month period ended September 30, 2013.

 

Other Expenses. During the nine month period ended September 30, 2014, we incurred $11,136 in interest on convertible debenture and also realized a foreign exchange adjustment of ($140,640) compared to $11,135 incurred in interest and a foreign exchange adjustment of ($22,782) incurred during the nine month period ended September 30, 2013.

 

Comprehensive income (loss). During the nine month period ended September 30, 2014, our comprehensive loss was ($77,588) compared to comprehensive income of $168,828 for the nine month period ended September 30, 2013. The weighted average number of shares outstanding was 88,650,000 for each of nine month periods ended September 30, 2014 and September 30, 2013.

 

 
18

  

Three Month Period Ended September 30, 2014 Compared to Three Month Period Ended September 30, 2013

 

Revenue: We generated revenue during the three month period ended September 30, 2014 in the amount of $752,121 compared to $57,019 generated during the three month period ended September 30, 2013 (an increase of $695,102). Overall, revenue increased during the three month period ended September 30, 2014 from the three month period ended September 30, 2013 due primarily to the retooling work completed for JCI Plymouth, Honda and Toyota.

 

Cost of sales: During the three month period ended September 30, 2014, cost of sales was $112,143 compared to $44,762 during the three month period ended September 30, 2013 (an increase of $67,381). The change in products sold during the three month period ended September 30, 2014 contributed to an increase in our gross margin as compared to the three month period ended September 30, 2013. During the three month period ended September 30, 2014, we experienced significant revenue from retrofit systems for which the customers bear the majority of the cost. The primary revenue source as noted above was the completion a seat frame system with respective parts and labor costs associated therein.

 

Gross Profit. Thus, based on the above, our gross profit increased to $639,978 during the three month period ended September 30, 2014 from $12,257 during the three month period ended September 30, 2013.

 

Operating expenses. During the three month period ended September 30, 2014, we incurred operating expenses in the amount of $346,018 compared to operating expenses incurred during the three month period ended September 30, 2013 of $124,960 (an increase of $221,058). Operating expenses include: (i) compensation of $313,689 (2013: $67,508); (ii) occupancy costs of $18,120 (2013: $54,431); (iii) travel of $11,743 (2013: $4,921); (iv) professional fees of $11,738 (2013: $12,456); (v) communication of $4,336 (2013: $4,883); (vi) office and general of $17,423 (2013: $7,704); and (vii) foreign exchange gain of ($31,032) (2013: ($26,943)). In respect of compensation, fewer labour charges were capitalized to the work in process projects during September 30, 2014 compared to September 30, 2013 due to the timing and completion of specific projects resulting in an additional $270,000 being charged in 2014. Occupancy costs decreased $36,000. In 2013, the plant was relatively idle during the three month period ended September 30, 2013, which resulted in a larger amount of occupancy costs being expensed during the three month period ended September 30, 2013 compared to the three month period ended September 30, 2014. Travel increased by $6,000 as the efforts to source new customers and opportunities explored were undertaken during the three month period ended September 30, 2014 which were not undertaken in the same time period in 2013.

 

Foreign exchange: The continued weakening Canadian dollar in 2014 against the United States dollar resulted during the three month period ended September 30, 2014 in a foreign exchange gain of $31,032 compared to a gain of $26,943 during the three month period ended September 30, 2013 on denominations transacted and settled in foreign currencies, primarily being sales to the United States from which the monies are being converted and used to satisfy Canadian dollar operational requirements.

 

Income from Operations. Thus, this resulted in income from operations of $293,959 during the three month period ended September 30, 2014 compared to a loss from operations of ($112,703) during the three month period ended September 30, 2013.

 

Other Expenses. During the three month period ended September 30, 2014, we incurred $3,712 in interest on convertible debenture and also realized a foreign exchange adjustment of ($89,651) compared to $3,711 incurred in interest and a foreign exchange adjustment of ($17,737) incurred during the three month period ended September 30, 2013.

 

Comprehensive income (loss). Therefore, during the three month period ended September 30, 2014, our comprehensive income was $200,596 compared to a comprehensive loss of ($61,731) for the three month period ended September 30, 2013. The weighted average number of shares outstanding was 88,650,000 for each of the three month periods ended September 30, 2014 and 2013 as no new shares were issued.

 

 
19

  

LIQUIDITY AND CAPITAL RESOURCES

 

As of September 30, 2014

 

As of September 30, 2014, our current assets were $1,704,615 and our current liabilities were $1,083,621, which resulted in a working capital surplus of $620,994. As of September 30, 2014, current assets were comprised of: (i) $788,265 in cash; (ii) $224,090 in accounts receivable; (iii) $657,512 in inventory; (iv) $18,107 in taxes recoverable; (v) $13,459 in security deposits; and (vi) $3,182 in prepaid expenses. As of September 30, 2014, current liabilities were comprised of: (i) $200,577 in accounts payable and accrued expenses; (ii) $185,600 in convertible notes payable; (iii) $684,779 in deferred revenue; and (iv) $12,665 in warranty provision.

 

As of September 30, 2014, our total assets were $1,885,374 comprised of: (i) $1,704,615 in current assets; and (ii) $180,759 in fixed assets, net of depreciation. The slight increase of total assets during the nine month period ended September 30, 2014 from December 31, 2013 was primarily due an increase in inventory.

 

As of September 30, 2014, our total liabilities were $1,083,621 comprised entirely of current liabilities. The increase in liabilities during the nine month period ended September 30, 2014 was primarily due to an increase in deferred revenue.

 

Total stockholders’ equity decreased from $879,341 as of December 31, 2013 to $801,753 as of September 30, 2014.

 

Cash Flows from Operating Activities

 

For the nine month period ended September 30, 2014, net cash flows provided by operating activities was $43,974 consisting of net income of $63,052. Net cash flows provided by operating activities was adjusted by $30,999 in depreciation. Net cash flow from operating activities was further changed by: (i) a decrease of $65,414 in accounts receivable; (ii) an increase of $356,646 in inventory; (iii) an increase of $3,026 in prepaid expenses; (iv) a decrease of $724 in security deposits; (v) a decrease of $122,850 in accounts payable and accrued expenses; (vi) an increase of $364,443 in deferred revenue; (vii) a decrease of $6,662 in warranty payable; and (viii) an increase of $8,526 in taxes recoverable/payable.

 

For the nine month period ended September 30, 2013, net cash flows provided by operating activities was $256,829 consisting primarily of a net loss of $191,610. Net cash flows provided by operating activities was adjusted by $33,133 in depreciation. Net cash flow from operating activities was further changed by: (i) a decrease of $178,587 in accounts receivable; (ii) an increase of $584,535 in inventory; (iii) a decrease of $1,581 in prepaid expenses; (iv) a decrease of $493 in security deposit; (v) a decrease of $137,753 in accounts payable and accrued expense; (vi) an increase of $662,111 in deferred revenue; (vii) a decrease of $37,704 in warranty provision; and (viii\) an increase of $50,694 in taxes recoverable/payable.

 

Cash Flows from Investing Activities

 

For the nine month period ended September 30, 2014, net cash flows used in investing activities was $10,509 compared to net cash flows used in investing activities for the nine month period ended September 30, 2013 of $91,618 resulting from purchase of fixed assets.

 

Cash Flows from Financing Activities

 

For the nine month periods ended September 30, 2014 and September 30, 2013, net cash flows provided by financing activities was $-0-.

 

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.

 

 
20

  

PLAN OF OPERATION

 

Our principal demands for liquidity are to increase capacity, inventory purchase, sales distribution, and general corporate purposes. We are in the process of being accepted as a global prototype supplier by Johnson Controls compared to our prior role as a supplier for North America. We had been involved in discussions with Johnson Controls regarding prototypes and parts production. Johnson Controls visited our facility during early 2012 to conduct an audit for global recommendation. Their goal was to understand the processes we use to run the business and the controls that we have in place so that we were assured to have utmost control over the quality of work. The audit was based on our employees and their qualifications, data management, processes, tooling and equipment and parts and material management. Johnson Controls conducted a tour of our facility, which was followed up with a final review on May 3, 2012. Subsequently we received a call from Johnson Controls stating that we had been accepted and recommended for their global work. Therefore, we have been accepted for global work and thus provided the basis for previously disclosed projections. We may achieve those revenue projections during fiscal year 2014, however, we may also not achieve that level of revenue.

 

We intend to meet our liquidity requirements, including capital expenditures related to the purchase of equipment, purchase of inventory, and the expansion of its business, through cash flow provided by operations and funds raised through proceeds from the issuance of debt or equity.

 

Although we have not met our anticipated growth rate and level of business necessary to achieve the projections set forth in our November 7, 2011 press release, we continue to be well positioned financially. Cash reserves at September 30, 2014 totaled approximately $788,265 and with a working capital surplus of $620,994. Accounts payables have decreased by $122,850 at September 30, 2014 from December 31, 2013 because of lower trade payables due to fewer projects ongoing at year end. The notes payable is due to debt assumed by the business on the reverse merger with Ecoland International Inc.

 

With a flexible labor force, workers are hired on a project by project basis, and strong inventory management, we are able to manage our cash flow to meet the ever changing needs of the business. We can expand and contract very quickly based on customer demand. Our major customers, JCI and Tennessee Rand, are consistently submitting new projects. We have $522,000 of project work in process at the end of September 30, 2014 with a total contract value of approximately $738,188 We have received committed future orders of over $500,160 which are anticipated to be completed during the last half of 2014. Other revenue opportunities have historically materialized to supplement this revenue being service and retooling.

 

We have not paid any sums for public relations or investor relations.

 

MATERIAL COMMITMENTS

 

Convertible Promissory Notes

 

A material commitment during the fiscal year 2014 is the Convertible Promissory Notes pertaining to the aggregate amount of $36,000 that were formerly due and owing to each of Messrs. Treanor and Russell. We are currently in default of the Convertible Promissory Note regarding the remaining aggregate $36,000 due and owing to each of Messrs. Treanor and Russell, which accrue interest at the rate of 8% per annum until paid in full. As of the date of this Quarterly Report, we have received executed assignments from the respective creditors regarding the Settlement Agreements and the Convertible Notes related to the remaining portion due and owing of $72,000.

 

The original Convertible Notes consisted of the following: (i) principal amount of $40,000 dated April 15, 2008 issued to Donna Boyle, (b) principal amount of $60,000 dated December 15, 2006 issued to Raymond Russell; and (c) principal amount of $60,000 dated December 15, 2006 issued to Stephen Treanor. On December 15, 2009, we entered into three separate Settlement Agreements with Raymond Russell, Donna Boyle and Stephen Treanor, respectively, with regards to the aggregate amounts due and owing to each creditor under the respective Convertible Promissory Note. In accordance with the Settlement Agreement with Stephen Treanor: (i) an aggregate of $72,000 in principal and accrued interest was agreed as due and owing as of December 15, 2009; and (ii) we agreed to convert $36,000 of the Convertible Note into shares of our restricted common stock at the rate of $0.005 per share. In accordance with the Settlement Agreement with Raymond Russell: (i) an aggregate of $72,000 in principal and accrued interest was agreed as due and owing as of December 15, 2009; and (ii) we agreed to convert $36,000 of the Convertible Note into shares of our restricted common stock at the rate of $0.005 per share. In accordance with the Settlement Agreement with Donna Boyle: (i) an aggregate of $41,600 in principal and accrued interest was agreed as due and owing as of December 15, 2009; and (ii) we agreed to convert $41,600 of the Convertible Note into shares of our common stock at the rate of $0.005 per share.

 

 
21

  

Thus, there is no remaining liability associated with Donna Boyle. The remaining liability associated with Stephen Treanor and Raymond Russell is $36,000 plus accrued interest, respectively. We are currently in default of the Convertible Promissory Note regarding the remaining aggregate $36,000 due and owing to each of Messrs. Treanor and Russell, which accrues interest at the rate of 8% per annum until paid in full. The two remaining Convertible Notes and the Settlement Agreements have been assigned to Mr. Paolucci. In the event that Mr. Paolucci elects to convert the two remaining Convertible Notes and/or the Settlement Agreements, an aggregate 37,120,000 shares of common stock would be issuable.

 

We recognized $11,136 and $11,135 in interest expense during the nine month periods ended September 30, 2014 and September 30, 2013.

 

CRITICAL ACCOUNTING ESTIMATES AND POLICIES

 

The discussion and analysis of our financial condition and plan of operations is based upon our interim consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The preparation of these interim financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates including, among others, those affecting revenue, the allowance for doubtful accounts, the salability of inventory and the useful lives of tangible and intangible assets. The discussion below is intended as a brief discussion of some of the judgments and uncertainties that can impact the application of these policies and the specific dollar amounts reported on our financial statements. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, or if management made different judgments or utilized different estimates. Many of our estimates or judgments are based on anticipated future events or performance, and as such are forward-looking in nature, and are subject to many risks and uncertainties, including those discussed elsewhere in this Quarterly Report on Form 10-Q. We do not undertake any obligation to update or revise this discussion to reflect any future events or circumstances.

 

Uses of Estimates

 

The preparation of interim 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.

 

 
22

  

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, 2014, 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, 2014, our accounts are insured for $100,000 CDN by Canadian Deposit Insurance Corporation for Canadian bank deposits and are insured for $250,000 by FDIC for US bank deposits. The entirety of our US bank deposits are insured at September 30, 2014.

 

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.

 

Allowance for Doubtful Accounts

 

We extend credit to our customers in the normal course of business. The allowance for doubtful accounts represents our best estimate of the amount of probable credit losses in our existing accounts receivable. We determine the allowance based on specific customer information, historical write-off experience and current industry and economic data. Account balances are charged-off against the allowance when we believe it is probable the receivable will not be recovered. Management believes that there are no concentrations of credit risk for which an allowance should be established. Although management believes that now allowance is needed, it is possible that the estimated amount of cash collections with respect to accounts receivable could change. As of September 30, 2014 and December 31, 2013, we have not deemed any accounts uncollectible.

 

Revenue Recognition

 

We recognize 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 cost of sales are recognized at the time of sale.

2.

Service – Revenues and cost of sales 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.

 

D&R provides standard warranties for its product from the date of shipment. Estimated warranty obligations are recorded at the time of sale and amortized over the two year warranty period as of September 30, 2014 and December 31, 2013, warranty liability was $12,665 and $19,327, respectively.

 

 
23

  

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, 2014 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.

 

Based on such evaluation, our Chief Executive Officer/Chief Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our internal 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, 2014, management identified significant deficiencies related to: (i) the absence of an Audit Committee as of September 30, 2014; 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, 2014. 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.

 

 
24

  

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.

 

(b)

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.

 

(c)

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.

 

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, 2014. 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 six month period ended September 30, 2014.

 

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 2014. 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.

 

 
25

  

PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

No report required.

 

ITEM 1A. RISK FACTORS

 

No report required.

 

ITEM 2. UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS

 

No report required.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

No report required.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

No report required.

 

ITEM 5. OTHER INFORMATION

 

No report required.

 

 
26

  

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. and all amendments thereto 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 and the Current Report on Form 8-K filed with the Securities and Exchange Commission on July 20, 2012.

     

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

     

10.2

 

Lease Agreement between STENVI STEEL CO. LTD. (The Landlord) and D & R TECHNOLOGY INC. (The Tenant) incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on form 8-K on August 20, 2012.

     

10.3

 

Lease between Stenvi Steel Co. Ltd and D&R Technology Inc. dated March 10, 2010 incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on form 8-K on October 11, 2012.

     

10.4

 

Stock Purchase Agreement among D&R Technology, Inc. and certain selling shareholders of Ecoland International Inc. dated November 7, 2011 as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on Form 8-K on February 8, 2013.

     

10.5

 

Rescission Agreement among D&R Technology Inc. and certain shareholders of Ecoland International Inc. dated January 27, 2012 2011 as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on Form 8-K on February 8, 2013.

     

10.6

 

Convertible Promissory Note between Ecoland International Inc. and Stephen Treanor dated December 15, 2006 incorporated herewith as filed with the Securities and Exchange Commission as an exhibit to the SB-2 Registration Statement on April 18, 2007.

     

10.7

 

Convertible Promissory Note between Ecoland International Inc. and Raymond Russell dated December 15, 2006 incorporated herewith as filed with the Securities and Exchange Commission as an exhibit to the S-1 Registration Statement on April 18, 2007.

     

10.8

 

Convertible Promissory Note between Ecoland International Inc. and Donna Boyle dated April 15, 2008 incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on form 8-K on October 11, 2012.

     

10.9

 

Purchase Order 013863 dated March 6, 2012 from Broshco Fab Products incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on form 8-K on October 11, 2012.

 

 
27

 

10.10

 

Purchase Order 39066968 dated September 14, 2011 from Johnson Controls incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on form 8-K on October 11, 2012.

     

10.11

 

Purchase Order 39073789 from Johnson Controls incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on form 8-K on October 11, 2012.

     

10.12

 

Purchase Order 39074711 from Johnson Controls incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on form 8-K on October 11, 2012.

     

10.13

 

Purchase Order 39079925 from Johnson Controls incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on form 8-K on October 11, 2012.

     

10.14

 

Purchase Order 39082436 from Johnson Controls incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on form 8-K on October 11, 2012.

     

10.15

 

Purchase Order 39083371 from Johnson Controls incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on form 8-K on October 11, 2012.

     

10.16

 

Purchase Order 39083718 from Johnson Controls incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on form 8-K on October 11, 2012.

     

10.17

 

Purchase Order 4006857 from Manufacturers Industrial Group incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on form 8-K on October 11, 2012.

     

10.18

 

Settlement Agreement between Ecoland International Inc. and Stephen Treanor dated December 15, 2009 incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on form 8-K on October 11, 2012.

     

10.19

 

Settlement Agreement between Ecoland International Inc. and Raymond Russell dated December 15, 2009 incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on form 8-K on October 11, 2012.

     

10.20

 

Settlement Agreement between Ecoland International Inc. and Donna Boyle dated December 15, 2009 incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on form 8-K on October 11, 2012.

     

10.21

 

Purchase Order 39076849 from Johnson Controls incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on form 8-K on December 17, 2012 2011 as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on Form 8-K on February 8, 2013

  

 
28

 

10.22

 

Purchase Order 39064982 from Johnson Controls incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on form 8-K on December 17, 2012 2011 as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on Form 8-K on February 8, 2013.

     

10.23

 

Purchase Order 39043224 from Johnson Controls incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on form 8-K on December 17, 2012 2011 as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on Form 8-K on February 8, 2013.

     

10.24

 

Purchase Order 39061937 from Johnson Controls incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on form 8-K on December 17, 2012 2011 as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on Form 8-K on February 8, 2013.

     

10.25

 

Assignment Agreement dated January 2, 2013 between Stephen Treanor and Bernardino Paolucci 2011 as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on Form 8-K on February 8, 2013.

     

10.26

 

Assignment Agreement dated January 2, 2013 between Raymond Russell and Bernardino Paolucci 2011 as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on Form 8-K on February 8, 2013.

     

10.27

 

Assignment Agreement dated January 2, 2013 between Donna Boyle and Bernardino Paolucci.

     

10.28

 

Purchase Order 39099733 Rev. 2 dated February 5, 2013 from Johnson Controls 2011 as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on Form 8-K on February 8, 2013.

     

10.29

 

Purchase Order 50382 dated November 15, 2011 with PWO Canada Inc. as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on Form 8-K on March 20, 2013.

     

10.30

 

Purchase Order 182366 dated November 23, 2011 Toyota Boshuku as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on Form 8-K on March 20, 2013.

     

10.31

 

Purchase Order 182367 Dated November 28, 2011 with Toyota Boshuku as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on Form 8-K on March 20, 2013.

     

10.32

 

Purchase Order 40863 dated February 4, 2012 with Toyota Boshuku as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on Form 8-K on March 20, 2013.

  

 
29

 

10.33

 

Purchase Order 21052074 dated March 12, 2012 with Johnson Controls as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on Form 8-K on March 20, 2013.

     

10.34

 

Escrow Agreement between Novus Robotics Inc. and Manhattan Transfer Registrar Co. dated June 4, 2013 as filed with the Securities and Exchange Comission as an Exihibt to the Current Report on Form 8-K on June 4, 2013.

     

21

 

List of Subsidiaries incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on form 8-K on December 17, 2012

     

99.1

 

Audited financial statements of D&R Technologies Inc. incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on form 8-K on August 20, 2012.

     

99.2

 

Unaudited pro forma combined financial statements of D&R and Ecoland International Inc. incorporated herewith as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on form 8-K on August 20, 2012.

     

99.3

 

Press Release of Novus Robotics Inc. dated January 5, 2013 as filed with the Securities and Exchange Commission as an Exhibit to the Current Report on Form 8-K on March 20, 2013..

     

31.1

 

Rule 13a-15(e)/15d-15(e) Certification by the Chief Executive Officer and Chief Financial Officer *

     

32.1

 

Certification by the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *

 

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.

 

 
30

  

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 14, 2014

By:

/s/ Berardino Paolucci

 
   

Berardino Paolucci,

 
   

President/Chief

 
   

Executive Officer

 
       

Dated: November 14, 2014

By:

/s/ Berardino Paolucci

 
   

Berardino Paolucci,

 
   

Chief Financial Officer

 

 

 

 

 31