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EX-32.1 - Nexus Enterprise Solutions, Inc.ex32_1.htm
EX-31.2 - Nexus Enterprise Solutions, Inc.ex31_2.htm
EX-31.1 - Nexus Enterprise Solutions, Inc.ex31_1.htm
EX-32.2 - Nexus Enterprise Solutions, Inc.ex32_2.htm
 
 
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

FORM 10-Q

 
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Quarterly period ended   March 31, 2016

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

 
Commission File No. 333-184832

NEXUS ENTERPRISE SOLUTIONS, INC.
 (Exact Name of Small Business Issuer as specified in its charter)
 
Wyoming
45-2477894
(State or other jurisdiction)
(IRS Employer File Number)
   
 5340 N. Federal Highway
Suite 206
Lighthouse Point, FL
 33064
(Address of principal executive offices)   (zip code)
   
 (561)-767-4346
 (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant: (1) 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 þ  No o

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

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

Large accelerated filer o
Accelerated filer o
Non-accelerated filer  o  (Do not check if a smaller reporting company)
 Smaller reporting company  þ

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

As of May 13, 2016, registrant had outstanding 19,007,144 shares of the registrant's common stock.
 
 

 

 
FORM 10-Q
 
NEXUS ENTERPRISE SOLUTIONS, INC.
 
TABLE OF CONTENTS
 
 
     
PART I  FINANCIAL INFORMATION Page 
   
Item 1.
Financial Statements for the period ended March 31, 2016
 
 
Balance Sheets (Unaudited)  
3
 
Statements of Operations (Unaudited)
4
 
Statements of Cash Flows (Unaudited)
5
 
Notes to Unaudited  Financial Statements
6
     
Item 2.
Management’s Discussion and Analysis and Plan of Operation
8
     
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
11
     
Item 4.
Controls and Procedures
11
 
 
 
PART II  OTHER INFORMATION
 
     
Item 1.
Legal Proceedings
12
     
Item 1A.
Risk Factors
12
     
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
12
     
Item 3.
Defaults Upon Senior Securities
12
     
Item 4.
Mine Safety Disclosures
12
     
Item 5.
Other Information
12
     
Item 6.
Exhibits
13
 
 
 
Signatures
 
14
 

- 2 -

 
 
 
 
PART I FINANCIAL INFORMATION

References in this document to "us," "we," or "Company" refer to Nexus Enterprise Solutions, Inc.

 
ITEM 1. FINANCIAL STATEMENTS
 
 
NEXUS ENTERPRISE SOLUTIONS, INC.
 
Balance Sheets
 
(Unaudited)
 
         
   
March 31,
   
December 31,
 
   
2016
   
2015
 
ASSETS
       
CURRENT ASSETS
       
Cash
 
$
4,265
   
$
18,842
 
Accounts receivable, net of allowance for doubtful accounts
   
173,811
     
173,203
 
Total Current Assets
   
178,076
     
192,045
 
                 
Property and equipment, net of accumulated depreciation
   
547
     
547
 
Intangible assets
   
275,000
     
275,000
 
                 
TOTAL ASSETS
 
$
453,623
   
$
467,592
 
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
               
CURRENT LIABILITIES
               
Accounts payable and accrued expenses
 
$
180,143
   
$
239,293
 
Accrued expenses to related parties
   
215,122
     
211,721
 
Convertible debt
   
142,500
     
170,500
 
Notes payable to related parties
   
127,485
     
127,485
 
Total Current Liabilities
   
665,250
     
748,999
 
                 
Long-term portion of convertible debt
   
-
     
15,000
 
                 
TOTAL LIABILITIES
   
665,250
     
763,999
 
                 
STOCKHOLDERS' DEFICIT
               
Preferred stock, 10,000,000 shares authorized,
               
no par value, no shares issued and outstanding
   
-
     
-
 
Common stock, 500,000,000 shares authorized; $.001 par
               
value, 19,007,144 and 19,007,144 shares issued and
               
outstanding, respectively
   
19,007
     
19,007
 
Additional paid-in capital
   
1,542,270
     
1,542,270
 
Accumulated deficit
   
(1,772,904
)
   
(1,857,684
)
Total Stockholders' Deficit
   
(211,627
)
   
(296,407
)
                 
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
 
$
453,623
   
$
467,592
 
                 
 
 
 
The accompanying notes are an integral part of these unaudited financial statements.
 
 
 
 
 
- 3 -

 
 
 
 
NEXUS ENTERPRISE SOLUTIONS, INC.
     
Statements of Operations
     
(Unaudited)
     
         
   
Three Months Ended
 
   
March 31,
 
   
2016
   
2015
 
         
REVENUES
 
$
367,837
   
$
555,289
 
COST OF SALES
   
127,130
     
324,483
 
GROSS PROFIT
   
240,707
     
230,806
 
                 
OPERATING EXPENSES
               
  General and administrative
   
28,756
     
27,974
 
  Consulting and professional fees
   
123,770
     
123,710
 
    Total Operating Expenses
   
152,526
     
151,684
 
                 
INCOME FROM OPERATIONS
   
88,181
     
79,122
 
                 
OTHER EXPENSES
               
  Interest expense
   
(3,401
)
   
(7,385
)
                 
NET INCOME
 
$
84,780
   
$
71,737
 
                 
BAISC AND DILUTED NET INCOME PER COMMON SHARE
               
  BASIC AND DILUTED
 
$
0.00
   
$
0.00
 
                 
WEIGHTED AVERAGE NUMBER OF COMMON
               
  SHARES OUTSTANDING - BASIC AND DILUTED
   
19,007,144
     
18,807,144
 
                 
 
 
The accompanying notes are an integral part of these unaudited financial statements
         
 
 
 
 
- 4 -

 
 
 
 
 
NEXUS ENTERPRISE SOLUTIONS, INC.
 
Statements of Cash Flows
 
(Unaudited)
 
         
   
Three Months Ended
 
   
March 31,
 
   
2016
   
2015
 
OPERATING ACTIVITIES
       
  Net income
 
$
84,780
   
$
71,737
 
  Adjustments to reconcile net income to net cash provided
    by operating activities:
               
    Stock-based compensation
   
-
     
13,151
 
    Changes in operating assets and liabilities:
               
      Accounts receivable
   
(608
)
   
(6,642
)
      Accounts payable
   
(59,150
)
   
(16,018
)
      Interest payable
   
3,401
     
7,385
 
Net Cash Provided by Operating Activities
   
28,423
     
69,613
 
                 
FINANCING ACTIVITIES
               
  Borrowing from related party note payable
   
8,000
     
-
 
  Repayment of related party note payable
   
43,000
 
   
-
 
  Repayment of convertible note
   
(43,000
)
   
(85,000
)
Net Cash Used In Financing Activities
   
(43,000
)
   
(85,000
)
                 
NET (DECREASE) INCREASE IN CASH
   
(14,577
)
   
(15,387
)
CASH AT BEGINNING OF PERIOD
   
18,842
     
31,575
 
CASH AT END OF PERIOD
 
$
4,265
   
$
16,188
 
                 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
               
CASH PAID FOR:
               
  Interest
 
$
-
   
$
-
 
  Income taxes
   
-
     
-
 
                 
 
 
The accompanying notes are an integral part of these unaudited financial statements.
 
 
 
 
 
 
- 5 -

 



NEXUS ENTERPRISE SOLUTIONS, INC.
Notes to the Financial Statements
 (Unaudited)


NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The unaudited interim financial statements of Nexus Enterprise Solutions, Inc. (the "Company") have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information in accordance with Securities and Exchange Commission (SEC) Regulation S-X rule 8-03.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  In the opinion of management, the unaudited interim financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position and the results of operations and cash flows for the interim periods presented herein. The financial data and other information disclosed in these notes to the interim financial statements related to the period are unaudited. The results for the three month period ended March 31, 2016, are not necessarily indicative of the results to be expected for any subsequent quarters or for the entire year ending December 31, 2016.  These financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2015.

Reclassifications

Certain prior period amounts have been reclassified to conform to current period presentation.

Basic and Diluted Earnings (Loss) Per Share

The computations of basic loss per share of common stock are based on the weighted average number of shares outstanding at the date of the financial statements. The Company computes net income (loss) per share in accordance with ASC 260. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period.

Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. Basic and diluted net income (loss) per share is the same for each of the three months ended March 31, 2016, and 2015, due to the absence of common stock equivalents.
 

NOTE 2 - GOING CONCERN

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States, which contemplate continuation of the Company as a going concern.  The Company has a working capital deficit of $487,174 and an accumulated deficit of $1,772,904 as of March 31, 2016.  The Company currently has limited liquidity and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time.  These factors raise substantial doubt about the Company's ability to continue as a going concern.

Management anticipates that the Company will be dependent, for the near future, on additional investment capital, primarily from its shareholders, to fund operating expenses. The Company intends to position itself so that it may be able to raise additional funds through the private placement of its common stock. In light of management's efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.
 

NOTE 3 – RELATED PARTY TRANSACTIONS

As of March 31, 2016, and December 31, 2015, the balance of accrued expenses to related parties, which consists of accrued interest on notes payable to related parties and accrued payroll, was $215,122 and $211,721, respectively. At March 31, 2016, and December 31, 2015, the accrued interest on the outstanding notes payable to related parties was $97,122 and $93,721, respectively. The outstanding balance of accrued payroll to officers was $118,000 as of March 31, 2016, and December 31, 2015.

The Company pays monthly consulting fees to two stockholders. During the three months ended March 31, 2016 and 2015, these fees aggregated $42,300 and $40,500.
 
 
- 6 -





NEXUS ENTERPRISE SOLUTIONS, INC.
Notes to the Financial Statements
 (Unaudited)



 
NOTE 4 – NOTES PAYABLE TO RELATED PARTIES

As of March 31, 2016, and December 31, 2015, the Company had outstanding notes payable to related parties of $127,485. These notes are unsecured bear interest between 0% and 6% and are due on demand.

During the three months ended March 31, 2016, the Company borrowed $8,000 under a note payable to a related party that bore interest of 15% per annum and was due on demand. The balance was repaid in full during the three months ended March 31, 2016.
 

NOTE 5 – NOTES PAYABLE

In April 2013, the Company and a third party reached an agreement for Nexus to use certain intellectual property in its lead generation business into perpetuity in exchange for a $150,000 note and 500,000 common shares which were previously issued during February 2012 (the fair value of these shares of $125,000 was reclassified from deposits to intangible assets during the year ended December 31, 2013). The note will be repaid in 18 monthly installments, with the monthly payments varying based on the Company's gross profit for that month. The monthly payments range from $5,000 to $25,000. The note does not bear interest unless a monthly payment is not made, at which time the note will bear interest at 12.5% until the non-payment is cured. During 2015, and 2014, the Company made payments of $30,500 and $65,500, respectively. The outstanding balance under this note payable was $0 as of March 31, 2016, and December 31, 2015, respectively. The outstanding balance of interest payable related to this agreement was $5,502 as of March 31, 2016, and December 31, 2015, respectively.

The note is currently in default over the amount of accrued interest of $5,502.  Currently, the company is in talks with the third party to settle the default amount owed.  The third party has delivered a default notice to the issuer and voiced intentions on suing Nexus over amount of $5,502.  In the event the third party sues, the company does not see it having any material effect.

On June 4, 2014, the Company borrowed $387,000 from an unrelated third party entity in the form of a convertible note. The note bears a zero percent interest rate until December 31, 2014, at which point the note will accrue interest at a rate of 8 percent per annum commencing on January 1, 2015. The principal balance of the note with accrued interest is due on February 15, 2017. Monthly payments commence in January 2015, with the first payment of $17,500 due on January 15, 2015 and every payment due on or near the 15th of each month thereafter.  On January 15, 2016, the monthly payments decrease to $15,000 per month until maturity. The Holder is prohibited from converting all or any portion of the outstanding principal and accrued interest provided timely monthly payments are received by the Holder pursuant to the terms set forth in the payment schedule. If the note becomes convertible due to timely monthly payments not being made, the note will be convertible into common stock at 55% of the lowest closing bid price of the Company's common stock during the 25 trading days preceding the date of conversion. The Company evaluated the convertible note under FASB ASC 815 and determined it does not qualify as a derivative liability as of March 31, 2016. As of March 31, 2016, the note was not convertible.

As of March 31, 2016, and December 31, 2015, the Company had aggregate outstanding third party notes payable of $142,500 and $185,500, respectively.
 

 
- 7 -




ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION

The following discussion of our financial condition and results of operations should be read in conjunction with, and is qualified in its entirety by, the consolidated financial statements and notes thereto included in Item 1 in this Quarterly Report on Form 10-Q. This item contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those indicated in such forward-looking statements.

Forward-Looking Statements

This Quarterly Report on Form 10-Q and the documents incorporated herein by reference contain forward-looking statements. Such forward-looking statements are based on current expectations, estimates, and projections about our industry, management beliefs, and certain assumptions made by our management. Words such as "anticipates", "expects", "intends", "plans", "believes", "seeks", "estimates", variations of such words, and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed or forecasted in any such forward-looking statements. Unless required by law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. However, readers should carefully review the risk factors set forth herein and in other reports and documents that we file from time to time with the Securities and Exchange Commission, particularly the Report on Form 10-K, Form 10-Q and any Current Reports on Form 8-K.

Overview and History

Nexus Enterprise Solutions, Inc. ("Nexus") was incorporated in the State of Wyoming on October 19, 1995 as Global Link Technologies, Inc.  On June 10, 2008, Global Link Technologies filed Articles of Amendment with the State of Wyoming changing its name to MutuaLoan Corporation.  On June 16, 2011 (as filed with the State of Wyoming on September 16, 2011), MutuaLoan Corporation entered into a business combination with Nexus Enterprise Solutions, Inc. ("Nexus Florida").  The business combination was accounted for as a reverse merger recapitalization. The accounting target/legal acquirer was MutuaLoan. The accounting acquirer/legal target was Nexus Florida.  Nexus is currently conducting operations and generating revenue.

The Company operations are currently being conducted out of the Company office located at 5340 N Federal Hwy STE 206 Lighthouse Point, FL 33406 1375; (561) 767-4346.  It considers that the current principal office space arrangement adequate and will reassess its needs based upon the future growth of the Company.   Its fiscal year end is December 31st.
Our Company's primary service is lead generation for its customers.  The Company's target customers are currently companies in the insurance and financial service industries, but we intend to expand to additional industries in the future.  Our Company uses both online leads and offline lead generation techniques in order to generate revenue by selling such leads, as well as various other services, to our customers.

Online Generation
There are many ways to generate leads online. Each has its own formula that needs to be perfected in order to find the balance between quantity and quality. The online lead generation methods used by our Company include, but are not limited to, Proprietary Lead Portals, Pay Per Click Advertising, Email Advertising and Website Banners.
Offline Lead Generation

Using a combination of a predictive dialer call center solution and an overseas outsourced call center solution, our Company is able to generate custom live transfer leads for our customers.  We utilize this method of lead generation in situations where we are confident that a high volume of live leads can be generated and sold for a profit.

Revenue Model and Distribution methods of the products or services

Our revenue model is based on customer development.  We either purchase leads from accredited brokers or locate leads based on the methods described above, and then resell those leads to our customers through our automated system.  The leads must meet the stringent criteria of our system.  The leads are vetted through our fraud filters in order to ensure quality.

We are currently focusing our attention on the auto insurance market, but expect to expand to other industries in the very near future.  The Company will identify and address additional target markets for its services other than the insurance and financial industries with market research and feedback from its customers.
 
 
 
- 8 -





Results of Operations

For the Three Months Ended March 31, 2016 Compared to the Three Months Ended March 31, 2015

The Company generated $367,837 in revenue for the three month period ended March 31, 2016, which compares to revenue of $555,289 for the three month period ended March 31, 2015.  Our revenues decreased during the three month period ended March 31, 2016 due to decreased sales of our services to our current customers during this period.

Cost of sales for the three month period ended March 31, 2016 was $127,130, which compares to cost of sales of $324,483 for the three month period ended March 31, 2015.  Our revenues decreased during the three months ended March 31, 2016, and as our sales revenue decreased, our cost of sales correspondingly decreased.

Operating expenses, which consisted solely of general and administrative expenses, and consulting and professional fees for the three month period ended March 31, 2016, were $152,526. This compares with operating expenses for the three month period ended March 31, 2015 of $151,684.  The major components of general and administrative expenses include accounting fees, legal and professional fees.

As a result of the foregoing, we had net income of $84,780 for the three month period ended March 31, 2016. This compares with net income for the three month period ended March 31, 2015 of $71,737.

In its audited financial statements as of December 31, 2015, the Company was issued an opinion by its auditors that raised substantial doubt about the ability to continue as a going concern based on the Company's current financial position. Our ability to achieve and maintain profitability and positive cash flow is dependent upon our ability to successfully develop and market our products and our ability to generate revenues.

Liquidity and Capital Resources

As of March 31, 2016 we had cash or cash equivalents of $4,265. As of December 31, 2015, we had cash or cash equivalents of $18,842.

We believe that with our existing cash flows we have sufficient cash to meet our operating requirements for the next twelve months due to the fact that we believe our revenue will increase throughout the year.  We believe that the amount of revenue we are generating will allow us to meet our operating requirements during the next twelve months.  If our revenue is not sufficient to allow us to meet our cash requirements during the next twelve months, the company may need to raise additional funds through the sale of its equity securities.  We cannot guarantee that we will be successful in generating sufficient revenues or other funds in the future to cover these operating costs. Failure to generate sufficient revenues or additional financing when needed could cause us to go out of business.

Net cash provided by operating activities was $28,423 for the three month period ended March 31, 2016. This compares to net cash provided by operating activities of $69,613 for the three month period ended March 31, 2015. This change is due to an increase in accounts payable, which offset part of our net income of $84,780 for the three months ended March 31, 2016, as compared to our net income of $71,737 for the three months ended March 31, 2015.

Cash flows from investing activities were $0 for the three month period ended March 31, 2016 and 2015.  We do not anticipate significant cash outlays for investing activities over the next twelve months.

 


 

 
 
- 9 -



Cash flows used in financing activities was $43,000 for the three month period ended March 31, 2016 which compares to cash flows used in financing activities of $85,000 for the three month period ended March 31, 2015.  The change in cash flows related to financing activities is due to the fact that we had decreased amounts used for repayment of notes payable during the three months ended March 31, 2016 as compared to the three months ended March 31, 2015.

As of March 31, 2016, our total assets were $453,623 and our total liabilities were $665,250.  As of December 31, 2015, our total assets were $467,592 and our total liabilities were $763,999.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Plan of Operation

Our plan for the twelve months beginning March 31, 2016 is to operate at a profit or at break even. Our plan is to attract sufficient additional product sales and services within our present organizational structure and resources to become profitable in our operations.
 
Our revenue model is based on customer development.  We either purchase leads from accredited brokers or locate leads based on the methods described above, and then resell those leads to our customers through our automated system.  The leads must meet the stringent criteria of our system.  The leads are vetted through our fraud filters in order to ensure quality.

We are currently focusing our attention on the auto insurance market, but expect to expand to other industries in the very near future.

Nexus Enterprise Solutions, Inc. (Nexus) is redefining the current prospect and lead generation and acquisition industry by developing an information exchange service which allows sellers and buyers of leads, and other information assets, to operate in an optimized, transparent, and efficient way to transact deals in a more efficient manner than what is experienced in today's markets and systems.  This is accomplished primarily through systems and processes which enable enhanced business intelligence and management thereby empowering stakeholders on both sides of the transaction to make well-informed and meaningful connections with each other.

Our Company generates revenue through its lead generation services, which are comprised of the lead generation methods described above and are accessed by our customers through our automated system. The cost of developing an automated system such as ours is prohibitive for a majority of companies. We fulfill a need by allowing these companies to use our technology, forms, landing pages etc, for a fee. We currently are back logged with the amount of companies looking to buy and sell leads to us, our carriers and agencies. In return, we get compensated when we sell a lead by charging our customers a fee for each lead purchased.

The Company will identify and address additional target markets for its services other than the insurance and financial industries with market research and feedback from its customers.
 
Recently Issued Accounting Pronouncements

We have  reviewed  all  recently issued, but not yet effective,  accounting pronouncements and do not believe the future adoption of any such  pronouncements  may be expected to cause a material impact on our financial condition or the results of our operations.

Seasonality

We do not expect our revenues to be impacted by seasonal demands for our services.
 
 
 
- 10 -





ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a "smaller  reporting  company" as defined by Item 10 of Regulation  S-K, the Company is not required to provide information required by this Item.


ITEM 4. CONTROLS AND PROCEDURES
 
As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), our management carried out an evaluation, with the participation of our Chief Executive Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) of the Exchange Act), as of the period covered by this report. Disclosure controls and procedures are defined as controls and other procedures that are designed to ensure that information required to be disclosed by us in reports filed with the SEC under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) accumulated and communicated to the Company's management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based upon their evaluation, our management (including our Chief Executive Officer) concluded that our disclosure controls and procedures were not effective as of March 31, 2016, based on the material weaknesses defined below:

(i)            inadequate segregation of duties consistent with control objectives; and
(ii)            ineffective controls over period end financial disclosure and reporting processes.

Management's Remediation Plan

We plan to take steps to enhance and improve the design of our internal control over financial reporting.  During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above.  To remediate such weaknesses, we plan to implement the following changes in the future:

(i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk  management; and
(ii adopt sufficient written policies and procedures for accounting and financial reporting.
 
The remediation efforts set out in (i) is largely dependent upon our company generating the necessary revenue to cover the costs of implementing the changes required.  If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected.  These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

Management believes that despite our material weaknesses set forth above, our unaudited interim consolidated financial statements for the three months ended March 31, 2016 are fairly stated, in all material respects, in accordance with US GAAP.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter.


 
- 11 -



 

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS
 
There are no legal proceedings, to which we are a party, which could have a material adverse effect on our business, financial condition or operating results.
 

ITEM 1A. RISK FACTORS

Not required for a Smaller Reporting Company.
 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.
 

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.
 

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.
 

ITEM 5.  OTHER INFORMATION

None.
 

 
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ITEM 6. EXHIBITS

EXHIBITS. The following exhibits required by Item 601 to be filed herewith are incorporated by reference to previously filed documents:
 
Exhibit
Number
 
 
 
Description
 
 
 
31.1
 
Certification of Chief Executive Officer pursuant to Section 302
 
 
 
31.2
 
Certification of Chief Financial Officer pursuant to Section 302
 
 
 
32.1
 
Certification of Chief Executive Officer pursuant to Section 906
 
 
 
32.2
 
Certification of Chief Financial Officer pursuant to Section 906
 
 
 
101.INS**
 
XBRL Instance Document
  
 
 
101.SCH**
 
XBRL Taxonomy Schema
 
 
 
101.CAL**  
 
XBRL Taxonomy Calculation Linkbase
 
 
 
101.DEF** 
 
XBRL Taxonomy Definition Linkbase
 
 
 
101.LAB** 
 
XBRL Taxonomy Label Linkbase
 
 
 
101.PRE **
 
XBRL Taxonomy Presentation Linkbase
 
    ** Furnished herewith. XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
 

 
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SIGNATURES

 
In accordance with Section 12 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 on May 16, 2016.

 
       
 
 Nexus Enterprise Solutions, Inc.
       
   
By:
/s/ James Bayardelle
     
James Bayardelle, President


Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed   below by the following person on behalf of the Registrant and in the capacity and on the date indicated.

/s/  James Bayardelle
 
President, Chief Executive Officer, Principal Accounting Officer, Chief Financial Officer and Director
 
May 16, 2016
 
James Bayardelle
 
Title
 
Date
 
           
 
 
 
 
 
 
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