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 January 31, 2016

 

or

 

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

 

For the transition period from ______to______.

 

Commission File Number: 333-200624

 

NUTS AND BOLTS INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

 

Nevada		46-3505091
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

600 North Bridge Rd #12-02/03 Parkview Square Singapore		18878
(Address of principal executive offices)		(Zip Code)

 

600 North Bridge Rd #12-02/03

Parkview Square

Singapore 18878

(Address and Telephone Number of Registrant’s Principal

Executive Offices and Principal Place of Business)

 

919-633-2488

(Registrant’s telephone number, including area code)

 

n/a

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

 

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

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  x     No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer	¨	Accelerated Filer	¨
Non-Accelerated Filer	¨	Smaller Reporting Company	x
(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

 

As of March 28, 2016, there were 6,537,500 shares, $0.0001 par value per share, of common stock outstanding.

 

 

NUTS AND BOLTS INTERNATIONAL, INC.

Quarterly Report on Form 10-Q for the

Period Ended January 31, 2016

 

INDEX

 

PART I— FINANCIAL INFORMATION
Item 1.	Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15
Item 4.	Control and Procedures	15
PART II— OTHER INFORMATION
Item 1.	Legal Proceedings	16
Item 1A.	Risk Factors	16
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16
Item 3.	Defaults Upon Senior Securities	16
Item 4.	Mine Safety Disclosures	16
Item 5.	Other Information	16
Item 6.	Exhibits	17
SIGNATURES		18

 

 

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

 

This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.

 

We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management, any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.

 

These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.

 

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

 

CERTAIN TERMS USED IN THIS REPORT

 

When this report uses the words “we,” “us,” “our,” and the “Company,” they refer to Nuts and Bolts International, Inc. “SEC” refers to the Securities and Exchange Commission.

 

 

NUTS AND BOLTS INTERNATIONAL, INC. & SUBSIDIARY

Condensed Consolidated Balance Sheets

 

		January 31, 2016				July 31, 2015
		(Unaudited)
ASSETS
Current Assets
Cash		$	924			$	8,491
Total Current Assets			924				8,491
Property and Equipment, net			536				626
Total Assets		$	1,460			$	9,117
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable and accrued expenses		$	97,711			$	40,650
Loan payable - related party			100				100
Total  Liabilities			97,811				40,750
Commitments and Contingencies (See Note 5)
Stockholders' Deficit
Preferred stock,  $0.0001 par value; 10,000,000 shares authorized, none issued and outstanding			-				-
Common stock, $0.0001 par value; 100,000,000 shares authorized, 6,537,500 and 6,437,500 issued and outstanding, respectively			654				644
Additional paid-in capital			174,796				154,406
Accumulated deficit			(271,801	)			(186,683	)
Total Stockholders' Deficit			(96,351	)			(31,633	)
Total Liabilities and Stockholders' Deficit		$	1,460			$	9,117

 

See accompanying notes to condensed consolidated unaudited financial statements

 

 

NUTS AND BOLTS INTERNATIONAL, INC. & SUBSIDIARY

Condensed Consolidated Statements of Operations

(Unaudited)

 

		For the Three Months Ended January 31, 2016				For the Three Months Ended January 31, 2015				For the Six Months Ended January 31, 2016				For the Six Months Ended January 31, 2015
Revenue		$	43				-			$	77			$	-
Cost of Sales			-				-				-				-
Gross Income			43				-				77				-
Operating Expenses
Professional fees		$	17,456			$	16,694			$	23,662			$	25,794
General and administrative			27,634				25,139				61,233				47,404
Total Operating Expenses			45,090				41,833				84,895				73,198
Loss from Operations			(45,090	)			(41,833	)			(84,895	)			(73,198	)
Other Expenses
Interest Expense			(75	)			-				(300	)			-
LOSS FROM OPERATIONS BEFORE INCOME TAXES			(45,122	)			(41,833	)			(85,118	)			(73,198	)
Provision for Income Taxes			-				-				-				-
NET LOSS		$	(45,122	)		$	(41,833	)		$	(85,118	)		$	(73,198	)
Net Loss Per Share  - Basic and Diluted		$	(0.01	)		$	(0.01	)		$	(0.01	)		$	(0.01	)
Weighted average number of shares outstanding   during the year - Basic and Diluted			6,537,500				6,437,500				6,511,413				6,437,500

 

See accompanying notes to condensed consolidated unaudited financial statements

 

 

NUTS AND BOLTS INTERNATIONAL, INC. & SUBSIDIARY

Condensed Consolidated Statement of Stockholders' Deficit

For the Six Months Ended January 31, 2016

(Unaudited)

 

																		Additional								Total
		Preferred Stock								Common stock								paid-in				Accumulated				Stockholders'
		Shares				Amount				Shares				Amount				capital				Deficit				Deficit
Balance July 31, 2015			-			$	-				6,437,500			$	644			$	154,406			$	(186,683	)		$	(31,633	)
In kind contribution of services			-				-				-				-				10,400				-				10,400
Common stock issued for cash, ($0.10 / per share)			-				-				100,000				10				9,990				-				10,000
Net loss for the six months ended January 31, 2016			-				-				-				-				-				(85,118	)			(85,118	)
Balance January 31, 2016			-			$	-				6,537,500			$	654			$	174,796			$	(271,801	)		$	(96,351	)

 

See accompanying notes to condensed consolidated unaudited financial statements

 

 

NUTS AND BOLTS INTERNATIONAL, INC. & SUBSIDIARY

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

		For the Six Months Ended January 31, 2016				For the Six Months Ended January 31, 2015
Cash Flows From Operating Activities:
Net Loss		$	(85,118	)		$	(73,198	)
Adjustments to reconcile net loss to net cash used in operations
Depreciation			90				91
In kind contribution of services			10,400				3,200
Changes in operating assets and liabilities:
Increase in accounts payable and accrued expenses			57,061				(2,481	)
Net Cash Used In Operating Activities			(17,567	)			(72,388	)
Cash Flows From Financing Activities:
Repayment of loan payable			-				(1,129	)
Proceeds from issuance of common stock, net of offering costs			10,000				-
Net Cash Provided by (Used in) Financing Activities			10,000				(1,129	)
Net Decrease in Cash			(7,567	)			(73,517	)
Cash at Beginning of Period			8,491				108,326
Cash at End of Period		$	924			$	34,809
Supplemental disclosure of cash flow information:
Cash paid for interest		$	-			$	-
Cash paid for taxes		$	-			$	-

 

See accompanying notes to condensed consolidated unaudited financial statements

 

 

NUTS AND BOLTS INTERNATIONAL, INC AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JANUARY 31, 2016

(UNAUDITED)

 

NOTE 1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

 

(A) Basis of Presentation

 

The accompanying condensed consolidated unaudited 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 Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations.

 

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 statements presentation.  The results for the interim period are not necessarily indicative of the results to be expected for the year.

 

Nuts and Bolts International, Inc. (the "Company") was incorporated under the laws of the State of Nevada on August 21, 2013 to create and publish electronic non-fiction books (“eBooks”) through the internet. The Company creates and distributes high quality, multimedia eBooks for the hobby and do-it-yourself consumer markets.

 

Nuts and Bolts Publishing, LLC was organized under the laws of the State of North Carolina on August 22, 2013.

 

(B) Principles of Consolidation

 

The accompanying condensed consolidated financial statements include the accounts of Nuts and Bolts International, Inc. and its wholly owned subsidiary, Nuts and Bolts Publishing, LLC (collectively, the “Company”).  All intercompany accounts have been eliminated upon consolidation.

 

(C) Use of Estimates

 

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Significant estimates include valuation of in kind contribution of services, valuation of deferred tax assets. Actual results could differ from those estimates.

 

(D) Cash and Cash Equivalents

 

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At January 31, 2016 and July 31, 2015, the Company had no cash equivalents.

 

(E) Loss Per Share

 

Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by FASB ASC No. 260, “Earnings Per Share.” As of January 31, 2016 and January 31,2015, there were no common share equivalents outstanding.

 

(F) Income Taxes

 

The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

 

(G) Property and Equipment

 

Property and equipment is recorded at cost and depreciated or amortized using the straight-line method over the estimated useful life of the asset or the underlying lease term for leasehold improvements, whichever is shorter.

 

Additions are capitalized and maintenance and repairs are charged to expense as incurred. Gains and losses on dispositions of equipment are reflected in other income.

 

(H) Revenue Recognition

 

The Company will recognize revenue on arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”.  In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured. The Company will generate revenue from the sale of eBooks which will sell from $2.00 to $10.00.

 

(I) Fair Value of Financial Instruments

 

The Company measures its financial assets and liabilities in accordance with GAAP. For certain of our financial instruments, including cash, accounts payable, and the short-term portion of long-term debt, the carrying amounts approximate fair value due to their short maturities.

 

We adopted accounting guidance for financial and non-financial assets and liabilities (ASC 820). The adoption did not have a material impact on our results of operations, financial position or liquidity. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

 

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

 

Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

 

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

 

(J) Concentration of Credit Risk

 

At January 31, 2016 and July 31, 2015, accounts receivable of $0 and $0, respectively, consisted of receivables from the online courses on the online publishing platform www.udemy.com.

 

 

(K) Recent Accounting Pronouncements

 

In August 2014, the FASB issued Accounting Standards Update “ASU” 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) - Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this Update are effective for public and nonpublic entities for annual periods ending after December 15, 2016. Early adoption is permitted. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

 

In July 2015, FASB issued Accounting Standards Update (“ASU”) No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory” more closely align the measurement of inventory in GAAP with the measurement of inventory in International Financial Reporting Standards (IFRS). The amendments in this ASU do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. An entity should measure inventory within the scope of this Update at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. For public business entities, this ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. For all other entities, this ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. The amendments in this ASU should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

 

In August 2015, FASB issued Accounting Standards Update (“ASU”) No.2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” defers the effective date ASU No. 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in Update 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. All other entities should apply the guidance in Update 2014-09 to annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. All other entities may apply the guidance in ASU No. 2014-09 earlier as of an annual reporting period beginning after December 15, 2016, including interim reporting periods within that reporting period. All other entities also may apply the guidance in Update 2014-09 earlier as of an annual reporting period beginning after December 15, 2016, and interim reporting periods within annual reporting periods beginning one year after the annual reporting period in which the entity first applies the guidance in ASU No. 2014-09. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

 

All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable

 

(L) Business Segments

 

The Company operates in one segment and therefore segment information is not presented.

 

NOTE 2

PROPERTY AND EQUIPMENT

 

Property and equipment consist of the following at January 31, 2016:

 

		January 31,				July 31,				Estimated
		2016				2015				Useful Life
Computer Equipment			896				896			5 years
			896				896
Less: Accumulated Depreciation			(360	)			(270	)
Property and Equipment, Net		$	536			$	626

 

Depreciation expense was $90 and $91 for the six months ended January 31, 2016 and 2015, respectively.

 

NOTE 3

NOTES PAYABLE – RELATED PARTY

 

On October 13, 2013 the Company entered into a promissory note with a related party in the amount of $100. Pursuant to the terms of the note, the note is non-interest bearing, unsecured and is due on demand. (See Note 6).

 

 

NOTE 4

STOCKHOLDERS’ EQUITY

 

(A) Preferred Stock

 

The Company was incorporated on August 21, 2013. The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.0001 per share. Preferred stock may be issued in one or more series with rights and preferences are to be determined by the board of directors. As of January 31, 2016, no shares of preferred stock have been issued.

 

(B) Common Stock

 

The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.0001 per share.

 

On September 17, 2015, the Company issued 100,000 shares of common stock for $10,000 ($0.10/share).

 

(C) In kind contribution of services

 

For the six months ended January 31, 2016, a shareholder of the Company contributed services having a fair value of $10,400 (See Note 6).

 

For the years ended July 31, 2015, a shareholder of the Company contributed services having a fair value of $9,600 (See Note 6).

 

NOTE 5

COMMITMENTS AND CONTINGENCIES

 

(A) Consulting Agreements

 

On March 1, 2014 the Company entered into a consulting agreement to receive administrative and other miscellaneous services. The Company is required to pay $5,000 a month. The agreement is to remain in effect unless either party desires to cancel the agreement.

 

NOTE 6

RELATED PARTY TRANSACTIONS

  

For the six months ended January 31, 2016, a shareholder of the Company contributed services having a fair value of $10,400 (See Note 4(C)).

 

For the year ended July 31, 2015, a shareholder of the Company contributed services having a fair value of $9,600 (See Note 4(C)).

 

On October 13, 2013 the Company entered into a promissory note with a related party in the amount of $100. Pursuant to the terms of the note, the note is non-interest bearing, unsecured and is due on demand. (See Note 3).

 

NOTE 7

GOING CONCERN

 

As reflected in the accompanying financial statements, the Company has minimal operations, has negative working capital deficit of $96,887 and stockholder’s deficit of $96,351 used cash in operations of $17,567 and has a net loss of $85,118 for the six months ended January 31, 2016. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

 

NOTE 8

SUBSEQUENT EVENT

 

On February 29, 2016, the Company entered into a Stock Purchase Agreement (the “SPA”) with the former director and officer of the Company (the “Seller”), and the current director and officer (the “Purchaser”), under which the Purchaser purchased 5,000,000 shares of common stock, par value $0.0001 per share, of the Company (the “Shares”), for an aggregate purchase price of $155,000, payable in full to the Seller (a “Change of Control”). The Shares represent all of the Seller’s interest in and to any securities of the Company, and make up 76.5% of the issued and outstanding shares of common stock of the Company, as exhibited in the Company’s 8K of March 4, 2016.

 

 

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

 

The following plan of operations provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.

 

Overview

 

The Company was established on August 21, 2013 to publish eBooks under the Nuts and Bolts brand name. Earlier in 2013, the Company’s founder began developing the concept for an eBook publisher that would produce products that would appeal to tablet and Smartphone users who were eager to learn more about their hobbies and interests. The family of our founder, Michael Hillerbrand, includes numerous published authors and professional educators.

 

We believe the increased popularity of eBooks in the United States is due to certain industry and social trends that should continue for at least the next few years. The Company believes that the principal changes that have contributed to growth in the eBook market are (1) the emergence of eBook readers, tablet computers and Smartphones that make reading eBooks more convenient than a traditional print book, (2) the low cost of production and distribution of eBooks, and (3) the continued consumer interest in consuming media electronically rather than in the traditional print format.

 

The Company conducts its business through its wholly-owned operating subsidiary Nuts and Bolts Publishing, LLC (“NABP”) which conducts its business worldwide by delivering eBooks through the Internet. To date NABP, using the marketing name Nuts and Bolts Press, has published two eBooks. The Company has also published the first series of online courses on the online publishing platform www.udemy.com.

 

The Company’s strategy is to publish new titles on a regular basis, increasing output each year of operation. As the eBook catalog increases in size, brand awareness and profit margins are projected to increase. Titles will be carefully researched based on consumer search engine topic queries and eBook content will be specifically tailored to match high consumer interests. Formats will be tested to ensure learning effectiveness and positive consumer reception. The eBook electronic format will facilitate easy, low-cost updates and format changes.

 

The eBook creation process starts with market research. This research consists of identifying the categories of current “best sellers” published by other companies and identifying topics in market niches that have a high number of Google and Bing searches, but where such searches result in limited competitive advertising for books. Both of these market research methods are good indicators of potentially profitable eBook titles.

 

The next step in developing eBook titles is to rank this list of potential titles/topics by potential profitability. The ranking order of titles is dynamic and is revised as new topics are identified. Periodically the top titles are moved off the potential title list and put on the production list.

 

Even when a title is published, development is ongoing. Because the eBooks are published electronically, they can be easily modified. If an existing eBook title is not meeting sales expectations, it can be edited, combined with other titles, or re-titled. Edits can be made to enhance the quality of the titles or to add new material.

 

The creation of new titles can range in the time required, depending on familiarity the author has with the subject matter and whether the title is derived from a print book in the public domain or is an original work of the author. Original works on topics unfamiliar to the author take the longest amount of time to produce. The shortest time frame from conception to publication would be about four weeks and the longest could be six months to a year or more. The Company is focused on the titles that have the highest sales potential and the shortest turnaround time to publication.

 

In August 2015, the Company published its first digital multimedia “self-help” course on how to start a freelancing business. The course teaches anyone how to start their own freelancing business. Using the digital publishing platform, www.udemy.com , the course uses 15 audio/video lectures, totaling 75 minutes of content, to teach enrolled students. In addition, 10 worksheets and quizzes are also included. The course currently has over 1,900 students enrolled from 7 countries has received 100% positive reviews from enrolled students.

 

While the student enrollment and response has been very positive, sales have been negligible. According to the Udemy Terms of Service, sales revenues are held in reserve for 1-3 months to offset any refunds before being distributed to the publisher (the Company). In addition, Udemy has the right to advertise courses for sale prices well below the sales price set by the publisher and collects a sales commission of 50% for all sales Udemy generates from its promotional efforts. Also, the majority of students registered for the course redeemed “try it free” promotional coupons. Management is carefully evaluating whether publishing additional multimedia courses makes economic sense.

 

 

Plan of Operation

 

The Company’s strategy is to publish new titles on a regular basis, increasing output each year of operation. The Company currently has three books in its catalog. These are in the business “How To” category and humor category and are available for purchase on the Company’s website: www.nutsandboltspress.com. As the eBook catalog increases in size, brand awareness and profit margins are projected to increase. Titles will be carefully researched based on consumer search engine topic queries and eBook content will be specifically tailored to match high consumer interests. Formats will be tested to ensure effectiveness and positive consumer reception. Given the fact that the Company is marketing its products to both mature and growing consumer markets, it is anticipated that its marketing strategy will continue to change and evolve over time.

 

The Company is currently testing the expansion of its strategy to publish digital multimedia courses rather than eBooks. It is currently evaluating the results from the publication of its first course on how to start a freelancing business that was published on the Udemy publishing platform ( www.udemy.com ). While the student response has been positive, the revenue generated has been below projections and management is evaluating whether publishing additional multimedia courses makes economic sense. Since the change in control of February 29, 2016, current management is continuing to explore the Udemy publishing platform.

 

Limited Operating History

 

The founder of the Company began developing the concept for an eBook publishing company in early 2013. The Company was formed and began operations on August 21, 2013. Prior to that time, the Company had no operations upon which an evaluation of the Company and its prospects could be based. There can be no assurance that management of the Company will be successful in completing the Company’s product development programs, implementing the corporate infrastructure to support operations at the levels called for by the Company’s business plan, conclude a successful sales and marketing plan to attain significant penetration of the eBook market or that the Company will generate sufficient revenues to meet its expenses or to achieve or maintain profitability.

 

Going Concern

 

As reflected in the accompanying financial statements, the Company has minimal operations, has working capital deficit of $96,887 and stockholder’s deficit of $96,351, net used cash in operations of $17,567 and has a net loss of $85,118 for the six months ended January 31, 2016. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

 

 

Results of Operations

 

For the three and six months ended January 31, 2016 and 2015

 

Revenue. Gross revenues during the six months ended January 31, 2016 and 2015 were $77 and $0, respectively, an increase of $77. Gross revenues during the three months ended January 31, 2016 and 2015 were $ 43 and $0, respectively, an increase of $43. The increase in gross revenues was primarily attributable to the increase in sales of eBooks.

 

Operating expenses for the three months ended January 31, 2016 totaled $45,090 resulting in a loss of $45,122, as compared with operating expenses of $41,833 and a loss of 41,833 for the three month period ended January 31, 2015. Our operating expenses for the three months ended January 31, 2015, consisted of $16,694 in professional fees and $25,139 in general and administrative expenses, compared with $17,456 in professional fees and $27,634 in general and operating expenses for the three month period ended January 31, 2016.

 

Operating expenses for the six months ended January 31, 2016 totaled $84,895 resulting in a loss of $85,118, as compared with operating expenses of $73,198 and a loss of $73,198 for the six months period ended January 31, 2015. Our operating expenses for the six months ended January 31, 2016 consisted of $23,662 in professional fees and $61,233 in general and administrative expenses, compared with $25,794 in professional fees and $47,404 in general and administrative expenses for the six months period ended January 31, 2015.

 

Liquidity and Capital Resources

 

At the date hereof, we have minimal cash at hand. We require additional capital to implement our business and fund our operations.

 

Additional funding may not be available on favorable terms, if at all. The Company intends to continue to fund its business by way of equity or debt financing and advances from related parties. In the event we seek to raise additional capital through the issuance of debt or its equivalents, this will result in increased interest expense. If we raise additional capital through the issuance of equity or convertible debt securities, the percentage ownership of our company held by existing shareholders will be reduced and those shareholders may experience significant dilution. In addition, new securities may contain certain rights, preferences or privileges that are senior to those of our common stock. We cannot assure you that we will be able to raise the working capital as needed in the future on terms acceptable to us, if at all.

 

The Company currently has $924 of cash on hand. Our current cash burn rate is approximately $3,000 per month. At the current rate, the Company has resources to last until approximately February 2016.

 

Critical Accounting Policies

 

We have identified the policies outlined below as critical to our business operations and an understanding of our results of operations. The list is not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States, with no need for management's judgment in their application.

 

The Company accounts for income taxes under FASB ASC Topic 740 income taxes (“ASC Topic 740”). Under ASC Topic 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC Topic 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

Revenue Recognition

 

The Company will recognize revenue on arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”.  In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured. The Company will generate revenue from the sale of eBooks which will sell from $2.00 to $10.00. The Company recognizes revenue from the sale of online courses when the course is purchased and the right of return has ended, net of commissions paid and discounts.

 

Recent Accounting Pronouncements

 

In August 2014, the FASB issued Accounting Standards Update “ASU” 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) - Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this Update are effective for public and nonpublic entities for annual periods ending after December 15, 2016. Early adoption is permitted. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

 

 

In August 2015, FASB issued Accounting Standards Update (“ASU”) No.2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” defers the effective date ASU No. 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in Update 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. All other entities should apply the guidance in Update 2014-09 to annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. All other entities may apply the guidance in ASU No. 2014-09 earlier as of an annual reporting period beginning after December 15, 2016, including interim reporting periods within that reporting period. All other entities also may apply the guidance in Update 2014-09 earlier as of an annual reporting period beginning after December 15, 2016, and interim reporting periods within annual reporting periods beginning one year after the annual reporting period in which the entity first applies the guidance in ASU No. 2014-09. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

 

All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable.

 

Off Balance Sheet Transactions

 

None.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

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

 

Item 4. Controls and Procedures

 

Disclosure Controls and Procedures

 

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 ("Exchange Act"), the Company carried out an evaluation, with the participation of the Company's management, including the Company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of the Company's disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company's CEO and CFO concluded that the Company's disclosure controls and procedures were not effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including the Company's CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure as a result of continuing material weaknesses in its internal control over financial reporting.

 

During the assessment of the effectiveness of internal control over financial reporting, our management identified material weaknesses related to the lack of requisite U.S. generally accepted accounting principles (GAAP) expertise of our Chief Financial Officer and our internal bookkeeper. This lack of expertise to prepare our financial statements in accordance with U.S. GAAP without the assistance of the outside accounting consultant hired to ensure that our financial statements are prepared in accordance with U.S. GAAP constitutes a material weakness in our internal control over financial reporting. In order to mitigate the material weakness, we engaged an outside accounting consultant to assist us in the preparation of our financial statements to ensure that these financial statements are prepared in conformity to U.S. GAAP. This outside accounting consultant has significant experience in the preparation of financial statements in conformity with U.S. GAAP. We believe that the engagement of this consultant will lessen the possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis, and we will continue to monitor the effectiveness of this action and make any changes that our management deems appropriate. We expect to continue to rely on this outside consulting arrangement to supplement our internal accounting staff for the foreseeable future. Until such time as we hire the proper internal accounting staff with the requisite U.S. GAAP experience, however, it is unlikely we will be able to remediate the material weakness in our internal control over financial reporting.

 

 

Changes in Internal Controls over Financial Reporting

 

There were no changes that occurred to our internal control over financial reporting during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

None.

 

Item 1A. Risk Factors.

 

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

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

  

None.

  

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

On February 29, 2016 Tan Sri Dato’ Sri Lai Teck Peng closed a transaction in which he acquired a total of 5,000,000 shares of restricted stock of the Company, representing 78% of the shares in the Company from Michael Hillerbrand, our former Director. On the same day, the shareholders of the Corporation voted Tan Sri Dato’ Sri Lai Teck Peng as Director of the Company, as noted in the 8K filed with the SEC on March 4, 2016.

 

None.

 

 

Item 6. Exhibits

 

Exhibit Number		Description
31.1 *		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1+		Certification of Principal Executive Officer and Principal 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 Definitions Linkbase Document
101. LAB*		XBRL Taxonomy Extension Label Linkbase Document
101. PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

 

* Filed herewith.

 

+ In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	Nuts and Bolts International, Inc.
	By:	/s/ Tan Sri Dato' Sri Lai Teck Peng
		Tan Sri Dato' Sri Lai Teck Peng, Director
	Dated: March 21, 2016