UNITED STATES

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 SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

OR

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

For the transition period from ___________ to _____________

Commission file number 000-54000

AUTRIS

(Name of Registrant as specified in its charter)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No

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

Indicate by check mark whether the registrant is a large accelerated 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]

(Do not check if a smaller reporting company)

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

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date:  42,604,556 shares of common stock as of November 19, 2014.

AUTRIS

FOR THE FISCAL QUARTER ENDED

September 30, 2014

INDEX TO FORM 10-Q

PART I - FINANCIAL INFORMATION

Item 1.

Financial Statements.

AUTRIS

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 – Nature of Business

AUTRIS (the “Company”) was incorporated in the State of Nevada on February 28, 2008 as Big Sky Productions, Inc. The Company filed a Certificate of Amendment with the Nevada Secretary of State on January 6, 2014 effecting the name change.

On October 09, 2013, we acquired 100% of the membership interest of NitroHeat, LLC. Under the membership interest purchase agreement, Autris issued 20,000,000 shares of its common stock to Derek Naidoo (100% membership owner) exchange for 100% of NitroHeat, LLC.  For accounting purposes, the acquisition of the NitroHeat, LLC by Autris has been accounted for as a re-capitalization, similar to a reverse acquisition whereby the private company, NitroHeat, LLC, acquired (Autris) due to a change in control.   Accordingly, NitroHeat, LLC is considered the acquirer for accounting purposes and thus, the historical financials are primarily that of NitroHeat, LLC As a result of this transaction, Autris changed its business direction and is now a manufacturer and distributor of heated nitrogen system primarily focused towards the spray painting industry.

Note 2 – Summary of Significant Accounting Policies

Basis of presentation

The accompanying unaudited condensed interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information.

The unaudited interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, which contains the audited financial statements and notes thereto, together with the Plan of Operations for the year ended June 30, 2014.

Certain information or footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted, pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial reporting.  Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows.  It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation.  The interim results for the three months ended September 30, 2014 are not necessarily indicative of results for the full fiscal year.

Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Areas requiring the use of estimates include impairment of long lived assets, valuation allowance applied to deferred tax assets and useful lives used in the depreciation of equipment. Actual results could differ from those estimates.

AUTRIS
Notes to Condensed Consolidated Financial Statements
(Unaudited)

Principles of consolidation

For the period ended September 30, 2014 and June 30, 2014, the consolidated financial statements include the accounts of NitroHeat, LLC and Autris. All significant intercompany balances and transactions have been eliminated. NitroHeat, LLC and Autris will be collectively referred herein to as the “Company”.

Cash and Cash Equivalents

All highly liquid investments with maturity of three months or less are considered to be cash equivalents.  There were no cash equivalents as of September 30, 2014.

Inventory

Inventories are stated at the lower of cost (first-in, first-out basis) or market (net realizable value).

Property and Equipment

Property and equipment are carried at cost. Expenditures for maintenance and repairs are charged against operations. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in income for the period.

Depreciation is computed for financial statement purposes on a straight-line basis over estimated useful lives of the related assets. The estimated useful lives of depreciable assets are:

For federal income tax purposes, depreciation is computed under the modified accelerated cost recovery system. For audit purposes, depreciation is computed under the straight-line method.  

Earnings per share

FASB ASC 260, “Earnings Per Share” provides for calculation of "basic" and "diluted" earnings (loss) per share.  Basic earnings per share includes no dilution and is computed by dividing net income (loss) available to common shareholders by the weighted average common shares outstanding for the period.  Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity similar to fully diluted earnings per share.  Basic and diluted loss per share were the same, at the reporting dates, as there were no common stock equivalents outstanding.

Stock-based compensation

The Company records stock based compensation in accordance with the guidance in ASC Topic 505 and 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards.  This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

AUTRIS

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Stock-based compensation, continued

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.

Revenue Recognition

The Company's financial statements are prepared under the accrual method of accounting. Revenues are recognized when evidence of an agreement exists, the price is fixed or determinable, collectability is reasonably assured and goods have been delivered or services performed.

Through the acquisition of NitroHeat, the Company derived revenues from the sale of advertising space on its radio program “The Ellis Martin Report.” “The Ellis Martin Report” is a paid news magazine airing on select AM radio stations in the United States.  Clients and/or guests compensated the Company for time on this program to expose their business or stories to the listening audience.

Since the acquisition of NitroHeat, the Company derives revenues from the sale of heated nitrogen systems.

Recent Accounting Pronouncements

The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position, or statements.

Note 3 – Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. The Company incurred a net loss from continuing operations for the three months ended September 30, 2014 of $234,635.  The Company’s net operating loss was primarily related to expenses incurred in connection with its merger activities. The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

AUTRIS

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 4 – Fixed Assets

Note 5 – Related Party Transactions

During the three months ended September 30, 2014, the Company repaid outstanding loans from related parties totaling $11,000 and received advancements of $357,658. There was a total of $176,016 due to related parties as of September 30, 2014. The loans are non-interest bearing, due on demand and as such are included in current liabilities.

Note 6 – Stockholders’ Equity

Common Stock

The Company is authorized to issue up to 75,000,000 shares of $0.001 par value common stock. The Company has no stock option plan, warrants or other dilutive securities.

During the three months ended September 30, 2014:

·

The Company sold a total of 250,000 shares of its common stock for cash totaling $25,000 or $0.10 per share.  The Company also accepted subscription agreements for 600,000 shares of its common stock for cash of $60,000.  The shares were issued, but the cash was never received.  The Company is in negotiations with the investor to resolve this issue.

AUTRIS

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 7 – Subsequent Events

Item 2     Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and plan of operations should be read in conjunction with our unaudited interim financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q.  Various statements have been made herein that may constitute “forward-looking statements”.  Forward-looking statements may also be made in the Company’s other reports filed with or furnished to the United States Securities and Exchange Commission (the “SEC”) and in other documents.  In addition, the Company through its management may make oral forward-looking statements.  

Forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from such statements.  The words “believe,” “expect,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely” and similar expressions are intended to identify forward-looking statements.  These statements are not guarantees of future performance, and therefore, you should not put undue reliance upon them.  Some of the statements that are forward-looking include: our ability to successfully implement our business plan; our estimates of revenues and of other expenses associated with our operations; our ability to identify, explore and extract mineralized material; and our ability to generate sufficient cash flows and maintain adequate sources of liquidity to finance our ongoing operations and capital expenditures.  The Company undertakes no obligation to update or revise any forward-looking statements.

CORPORATE HISTORY AND BACKGROUND

Autris, formerly Big Sky Productions, Inc. (the “Company”) was incorporated in the State of Nevada on February 28, 2008.  Effective January 14, 2014, our name change went effective and our ticker symbol was changed to “AUTR”.  The Company has elected a fiscal year end of June 30.  

OUR BUSINESS

We have discontinued our operations of an online news magazine and terrestrial radio program broadcast known as the “Ellis Martin Report” and during the quarter ended September 30, 2013, we completed the acquisition of NitroHeat, LLC, a California limited liability company (“NitroHeat") from its sole member Anand Derek Naidoo. Mr. Naidoo became our Chief Executive officer, President and Director, as well as remaining Chief Executive Officer of NitroHeat as a result of the acquisition. NitroHeat shall operate as a wholly-owned subsidiary of the Company.NitroHeat is a manufacturer and distributor of nitrogen generators and compressed gas heaters, with all manufacturing and assembly conducted in the Gardena, California. This unique solution is currently supplied into the automotive and industrial spray painting markets. Even though NitroHeat’s initial focus was in the spray painting of vehicle and industrial applications, there are a variety of other uses for this system in the following areas: Food production and packaging, shielding gases in the industrial and aeronautical sector, fire retardants, wine production and bottling, shielding gas and aluminum extrusion.

In the painting segment, the benefits derived from the utilization of the NitroHeat system are; improved paint transfer efficiency, faster drying / curing time and a higher finish quality. In the industrial sectors, the Nitrogen generators are used as an alternative to compressed “bottled / tanked” nitrogen. The NitroHeat Nitrogen generators are able to produce “nitrogen on demand”. The Nitroheat compressed gas heaters are also used in a variety of industries requiring “hot air”. Our unique thermal process controllers are able to precisely supply compressed air or nitrogen at very specific temperatures.

Future operations of the Company shall focus on NitroHeat.

Critical Accounting Policies and Estimates

While our significant accounting policies are more fully described in Note 1 to our financial statements for the three months ended September 30, 2014, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this management discussion and analysis.

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We continually evaluate our estimates, including those related to bad debts, recovery of long-lived assets, income taxes, and the valuation of equity transactions. We base our estimates on historical experience and on various other assumptions that we believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Any future changes to these estimates and assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the financial statements.

Principles of Consolidation

The unaudited consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America and present the financial statements of the Company and our wholly-owned subsidiaries. In the preparation of our unaudited consolidated financial statements, intercompany transactions and balances are eliminated.

Results of Operations

The following discussion of the financial condition and results of operations should be read in conjunction with the financial statements included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future.

For the Three Months ended September 30, 2014

For the three months ended September 30, 2014, operating expenses were $305,801, as compared to $125,942 for the three months ended September 30, 2013. The increase in operating expenses for the three month periods were primarily attributable to the increase in travel, promotional and marketing and general and administrative, the increase in professional fees primarily due to accounting and legal fees related to public company filing and reporting requirements increase of $101,003.

We did not incur income (loss) from discontinued during the three months ended September 30, 2014 and 2013.

For the three months ended September 30, 2014 and 2013, we incurred a net loss of $234,635 and net income of $20,272, respectively. 

Liquidity and Capital Resources

As of September 30, 2014, our current assets were $107,191 and our current liabilities were $379,192, resulting in working capital of $272,001. We have been funding our operations through the issuance of common stock for operating capital purposes.

Liquidity and Financial Condition

As of September 30, 2014, the Company had current assets of $107,191 and current liabilities of $379,192; and a cash balance of $34,336.

We anticipate that additional capital will be required to implement our business plan for the next 12 months in our operations of NitroHeat.  In order to obtain the necessary capital, the Company may need to sell additional shares of common stock or borrow funds from private lenders.

Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us or experience unexpected cash requirements that would force us to seek alternative financing.  Further, if we issue additional equity or debt securities as a means of raising additional capital, stockholders may experience dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of common stock.

Operating Activities

For the three months ended September 30, 2014, net cash flows used in operating activities was $173,189 and was primarily attributable to our net loss of $234,635 adjusted for the add back by depreciation of $1,662 and offset by net changes in operating assets and liabilities of $59,784 due to an increase in accounts receivable of $18,654, an increase in inventory of $5,463 and an increase in accounts payable and accrued expenses of $82,577 and increase in accrued imputed interest – related party of $1,324. For the three months ended September 30, 2013, net cash used by operating activities was $113,943 and was primarily attributable to our net income of $20,272 adjusted for the add back by depreciation of $1,518 and offset by net changes in operating assets and liabilities of $92,153 due to an decrease in accounts receivable of $84,153 and an increase in accounts payable and accrued expenses of $8,000.

Investing Activities

Net cash flows used in investing activities were $2,900 for the three months ended September 30, 2014 and compared to $2,774 for the nine months ended September 30, 2013.  

Financing Activities

Net cash flows provided by financing activities were $371,658 for the three months ended September 30, 2014 resulting from the net proceeds received from the proceeds received from the notes payable $346,658 and net proceeds received from the sale of our common stock. Net cash flows provided by financing activities for the three months ended September 30, 2013 was $0 and consisted of net proceeds from the sale of our common stock.

We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern in their audit opinion for the three months ended September 30, 2014. We estimate that based on current plans and assumptions, that our available cash is insufficient to satisfy our cash requirements for the next 12 months. We presently have no other alternative source of working capital. We may not have sufficient working capital to provide working capital necessary for our ongoing operations and obligations for the next 12 months. As of September 30, 2014, we had $34,336 available in cash.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 3     Quantitative and Qualitative Disclosures about Market Risk

This item is not required for a smaller reporting company.

Item 4     Controls and Procedures

Disclosure Controls and Procedures

Our management has evaluated, under the supervision and with the participation of our President, Chief Executive and Chief Financial Officers, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) and 15d-15 (b) under the Securities Exchange Act of 1934 (the “Exchange Act”).  Based on that evaluation, our management has concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are not effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our President, Chief Executive and Chief Financial Officers, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

Item 1  

Legal Proceedings

None.

Item 1A.  

Risk Factors

This Item is not applicable because the Company is a smaller reporting company.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

For the quarter ended September 30, 2014, we raised a total of $25,000 from one (1) investor, at $0.10 per share.  We are therefore obligated to issue a total of 250,000 shares of restricted common stock.  Such shares will be issued in accordance with the exemptions from registration as provided by Section 4(a)(2) of the Securities Act of 1933, as amended (“Securities Act”), and Regulation S promulgated thereunder.

Item 3.

Defaults upon Senior Securities

None. 

Item 4.

Mine Safety Disclosures

This Item is not applicable.

Item 5.  

Other Information

None.

Item 6.

  Exhibits

*  Pursuant to applicable securities laws and regulations, we are deemed to have complied with the reporting obligation relating to the submission of interactive data files in such exhibits and are not subject to liability under any anti-fraud provisions of the federal securities laws as long as we have made a good faith attempt to comply with the submission requirements and promptly amend the interactive data files after becoming aware that the interactive data files fail to comply with the submission requirements. Users of this data are advised that, pursuant to Rule 406T, these interactive data files are deemed not filed and otherwise are not subject to liability.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.