See accompanying notes to condensed consolidated
unaudited financial statements
See accompanying notes to condensed consolidated
unaudited financial statements
See accompanying notes to condensed consolidated
unaudited financial statements
See accompanying notes to condensed consolidated
unaudited financial statements
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
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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).
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.
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.