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EX-31 - EX-31.1 SECTION 302 CERTIFICATION - Axius Inc.axius10q073111ex311.htm


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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 July 31, 2011


     .   

Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934


For the transition period from __________  to __________


Commission File Number:  000-54400


Axius Inc.

(Exact name of registrant as specified in its charter)


Nevada

 

27-3574086

(State or other jurisdiction of incorporation or organization)

 

(IRS Employer Identification No.)


6A Easa Al Gurg Tower, 6th Floor, Baiyas Road, P.O. Box 186549,

Dubai UAE

(Address of principal executive offices)


00971 44475722

(Registrant’s telephone number)

 

 

(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  X . No      .

 

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

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

 

Large accelerated filer

      .

Accelerated filer

      .

Non-accelerated filer

      . (Do not check if a smaller reporting company)

Smaller reporting company

  X .

 

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


State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 10,703,500 common shares as of September 7, 2011.




  


 

TABLE OF CONTENTS


  

 

Page

 

PART I – FINANCIAL INFORMATION

 

Item 1:

Financial Statements

3

Item 2:

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

12

Item 3:

Quantitative and Qualitative Disclosures About Market Risk

13

Item 4T:

Controls and Procedures

13

 

PART II – OTHER INFORMATION

 

Item 1:

Legal Proceedings

14

Item 1A:

Risk Factors

14

Item 2:

Unregistered Sales of Equity Securities and Use of Proceeds

14

Item 3:

Defaults Upon Senior Securities

14

Item 4:

Removed and Reserved

14

Item 5:

Other Information

14

Item 6:

Exhibits

14

 

 



2



  


 

 

PART I - FINANCIAL INFORMATION


Item 1.     Financial Statements


Our financial statements included in this Form 10-Q are as follows:

 

4

Balance Sheets as of July 31, 2011 and October 31, 2010 (unaudited);

 

 

5

Statements of Operations for the three and nine months ended July 31, 2011 and 2010 and period from September 18, 2007 (Inception) to July 31, 2011 (unaudited);

 

 

6

Statements of Stockholders’ Equity (Deficit) for period from September 18, 2007 (Inception) to July 31 2011 (unaudited);

 

 

7

Statements of Cash Flows for the nine months ended July 31, 2011 and 2010 and period from September 18, 2007 (Inception) to July 31, 2011 (unaudited);

 

 

8

Notes to Financial Statements;

 

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q.  In the opinion of management, all adjustments considered necessary for a fair presentation have been included.  Operating results for the interim period ended July 31, 2011 are not necessarily indicative of the results that can be expected for the full year.

 

 



3



  


AXIUS INC.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS (unaudited)

As of July 31, 2011 and October 31, 2010


  

July 31,

2011

 

 

October 31,

2010

 

  

 

 

 

 

 

ASSETS

  

 

 

 

 

 

Current Assets

 

 

 

 

 

   Cash and equivalents

 

$

106,104

 

 

$

24,949

 

   Prepaid expenses

 

 

4,164

 

 

 

34,933

 

   Inventory – Cosmetics

 

 

46,632

 

 

 

-0-

 

  

 

 

156,900

 

 

 

59,882

 

  

 

 

 

 

 

 

 

 

Other Assets

 

 

 

 

 

 

 

 

   Investment in French Cosmetic Centre Ltd

 

 

200,000

 

 

 

-0-

 

  

 

 

200,000

 

 

 

-0-

 

   

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

356,900

 

 

$

59,882

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

  

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

   Due to HMM Corporate Services Ltd.

 

$

19,575

 

 

$

90,000

 

   Accrued Liabilities

 

 

42,985

 

 

 

25,000

 

      Total liabilities

 

 

62,560

 

 

 

115,000

 

  

 

 

 

 

 

 

 

 

Stockholders’ Equity (Deficit)

 

 

 

 

 

 

 

 

Common Stock, $.001 par value, 100,000,000 shares authorized, shares issued and outstanding as of July 31, 2011  10,703,500 shares (December 31, 2010 – 2,150,00 shares)

 

 

10,704

 

 

 

2,150

 

Preferred Stock, $.001 par value, 10,000,000 shares authorized, -0- shares issued and outstanding

 

 

-0-

 

 

 

-0-

 

Additional paid-in capital

 

 

909,897

 

 

 

63,100

 

Deficit accumulated during the development stage

 

 

(626,261

)

 

 

(120,368

)

Total stockholders’ equity (deficit)

 

 

294,340

 

 

 

(55,118

)

  

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

$

356,900

 

 

$

59,882

 

 

See accompanying notes to financial statements.

 



4



  


 

AXIUS INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS (unaudited)

Three and Nine Months Ended July 31, 2011 and 2010 and

Period from September 18, 2007 (Inception) to July 31, 2011


  

 

Three Months

Ended

July 31, 2011

 

 

Three Months

Ended

July 31, 2010

 

 

Nine

 Months

Ended

July 31, 2011

 

 

Nine Months

Ended

July 31, 2010

 

 

Period from

September 18, 2007

(Inception) to

July 31, 2011

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting

 

$

-0-

 

 

$

-0-

 

 

$

-0-

 

 

$

-0-

 

 

$

25,000

 

Foreign currency translation

 

 

(371)

 

 

 

 -0-

 

 

 

(3,365)

 

 

 

-0-

 

 

 

(3,365)

 

Sales 

 

 

611 

 

 

 

-0-

 

 

 

611 

 

 

 

-0-

 

 

 

611

 

TOTAL INCOME

 

 

240

 

 

 

-0-

 

 

 

(2,754)

 

 

 

-0-

 

 

 

22,246

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF GOODS SOLD 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of goods sold - cosmetics

 

 

1,006 

 

 

 

-0-

 

 

 

1,006 

 

 

 

-0-

 

 

 

1,006 

 

 TOTAL COGS

 

 

1,006 

 

 

 

-0-

 

 

 

1,006 

 

 

 

-0-

 

 

 

1,006 

 

TOTAL GROSS PROFIT (LOSS)

 

 

(766)

 

 

 

-0-

 

 

 

(3,760)

 

 

 

-0-

 

 

 

21,240

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Professional fees

 

 

      11,604 

 

 

 

82,500 

 

 

 

26,794 

 

 

 

86,500 

 

 

 

154,044 

 

    Communication

 

 

1,374

 

 

 

-0-

 

 

 

1,996

 

 

 

-0-

 

 

 

1,996

 

    Consulting

 

 

315,817

 

 

 

 -0-

 

 

 

396,018

 

 

 

-0-

 

 

 

414,085

 

    Finance charge

 

 

13,412

 

 

 

 -0-

 

 

 

13,412

 

 

 

-0-

 

 

 

13,412

 

    General & administrative

 

 

11,604

 

 

 

 -0-

 

 

 

13,034

 

 

 

-0-

 

 

 

13,085

 

    Marketing

 

 

7,489

 

 

 

 -0-

 

 

 

8,489

 

 

 

-0-

 

 

 

8,489

 

    Organization cost

 

 

-0-

 

 

 

 -0-

 

 

 

6,565

 

 

 

-0-

 

 

 

6,565

 

    Payroll

 

 

2,844

 

 

 

 -0-

 

 

 

2,844

 

 

 

-0-

 

 

 

2,844

 

    Stock transfer agent

 

 

1,481

 

 

 

-0-

 

 

 

14,244

 

 

 

-0-

 

 

 

14,244

 

    Technology

 

 

1,445

 

 

 

 -0-

 

 

 

2,485

 

 

 

-0-

 

 

 

2,485

 

    Travel

 

 

8,526

 

 

 

-0-

 

 

 

16,252

 

 

 

-0-

 

 

 

16,252

 

TOTAL EXPENSES

 

 

375,596

 

 

 

82,500

 

 

 

502,133

 

 

 

86,500

 

 

 

647,501

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

 

(376,362

)

 

 

(82,500

)

 

 

(505,893

)

 

 

(86,500

)

 

 

(626,261

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PROVISIONS FOR INCOME TAX

 

 

-0-

 

 

 

-0-

 

 

 

-0-

 

 

 

-0-

 

 

 

-0-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

 $

(376,362

)

 

 $

(82,500

 

 $

(505,893

 

 $

(86,500

 

 $

(626,261

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS PER SHARE:  BASIC AND DILUTED

 

 $

(.04

)

 

 $

(.04

)

 

 $

(.08

)

 

 $

(.04

)

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Weighted average shares outstanding:

    Basic and diluted

 

 

8,677,125

 

 

 

2,150,000

 

 

 

5,784,782

 

 

 

2,150,000

 

 

 

 

 


See accompanying notes to financial statements.

 



5



  



AXIUS INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT) (unaudited)

Period from September 18, 2007 (Inception) to July 31, 2011


  

 

  

 

Common stock

 

 

Additional

paid-in

 

 

Deficit accumulated during the development

 

 

 

 

  

 

Shares

 

 

Amount

 

 

capital

 

 

stage

 

 

Total

 

Inception, September 18, 2007

 

 

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for cash

 

 

2,150,000

 

 

 

2,150

 

 

 

40,850

 

 

 

-

 

 

 

43,000

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the period ended October 31, 2007

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(4,000

)

 

 

(4,000

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, October 31, 2007

 

 

2,150,000

 

 

 

2,150

 

 

 

40,850

 

 

 

(4,000

)

 

 

39,000

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended October 31, 2008

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(45,000

)

 

 

(45,000

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, October 31, 2008

 

 

2,150,000

 

 

 

2,150

 

 

 

40,850

 

 

 

(49,000

)

 

 

(6,000

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended October  31, 2009

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(10,000

)

 

 

(10,000

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, October 31, 2009

 

 

2,150,000

 

 

 

2,150

 

 

 

40,850

 

 

 

(59,000

)

 

 

(16,000

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of due to officer to contributed capital

 

 

-

 

 

 

-

 

 

 

22,250

 

 

 

-

 

 

 

22,250

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended October 31, 2010

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(61,368

)

 

 

(61,368

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, October 31, 2010

 

 

2,150,000

 

 

 

2,150

 

 

 

63,100

 

 

 

(120,368

)

 

 

(55,118

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for cash

 

 

5,653,500

 

 

 

5,654

 

 

 

559,697

 

 

 

-

 

 

 

565,351

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of due to HMM to contributed capital

 

 

900,000

 

 

 

900

 

 

 

89,100

 

 

 

-

 

 

 

90,000

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for investment assignment

 

 

2,000,000

 

 

 

2,000

 

 

 

198,000

 

 

 

-

 

 

 

200,000

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the period ended July 31, 2011

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(505,893

)

 

 

(505,893

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, July  31, 2011

 

 

10,703,500

 

 

$

10,704

 

 

$

909,897

 

 

$

(626,261

)

 

$

294,340

 


See accompanying notes to financial statements.

 



6



  



AXIUS INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS (unaudited)

For the nine months ended July 31, 2011 and 2010 and

Period from September 18, 2007 (Inception) to July 31, 2011


 

 

Nine Months

Ended

July 31, 2011

 

 

Nine Months

Ended

July 31, 2010

 

 

Period From

September 18, 2007

(Inception) to

July 31, 2011

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

Net loss for the period

 

$

(505,893

)

 

$

(86,500

)

 

$

(626,261

)

Change in non-cash working capital items:

 

 

 

 

 

 

 

 

 

 

 

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

     (Increase) decrease in prepaid expenses

 

 

30,770

 

 

 

  (7,500)

 

 

 

(4,163

)

     Increase (decrease) in accrued expenses

 

 

17,985

 

 

 

-0-

 

 

 

42,985

 

NET CASH USED BY OPERATING ACTIVITIES

 

 

(457,138

)

 

 

(94,000

)

 

 

(587,439

)

  

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

     (Increase) decrease in inventory 

 

 

(46,632

)

 

 

-0-

 

 

 

(46,632

)

NET CASH USED BY INVESTING ACTIVITIES 

 

 

(46,632

)

 

 

-0-

 

 

 

(46,632

)

  

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

     Proceeds from issuance of common stock

 

 

565,350

 

 

 

-0-

 

 

 

608,350

 

     Increase (decrease) in due to officer

 

 

19,575

 

 

 

(16,000

 

 

41,825

 

     Proceeds from note payable – related

 

 

-0-

 

 

 

90,000

 

 

 

    90,000

 

     Additional Paid-In Capital

 

 

-0-

 

 

 

20,000

 

 

 

-0-

 

 NET CASH PROVIDED BY FINANCING ACTIVITIES

 

 

584,925

 

 

 

94,000

 

 

 

740,175

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 NET INCREASE IN CASH

 

 

81,155

 

 

 

-0-

 

 

 

106,104

 

  

 

 

 

 

 

 

 

 

 

 

 

 

Cash, beginning of period 

 

 

24,949

 

 

 

-0-

 

 

 

-0-

 

Cash, end of period  

 

$

106,104

 

 

 $

-0-

 

 

 $

106,104

 

  

 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION

 

 

 

 

 

 

 

 

 

 

 

 

    Interest paid

 

$

-0-

 

 

$

-0-

 

 

$

-0-

 

    Income taxes paid

 

$

-0-

 

 

$

-0-

 

 

$

-0-

 

    

 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL NON-CASH INVESTING AND  FINANCING INFORMATION

 

 

 

 

 

 

 

 

 

 

 

 

    Conversion of due to officer to contributed capital and investment assignment

 

$

290,000

 

 

$

-0-

 

 

$

312,250

 

   

 

 

 

 

 

 

 

 

 

 

 

 


See accompanying notes to financial statements.

 

 



7



AXIUS INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

July 31, 2011


 


NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Nature of Business


Axius, Inc. (“Axius” and the “Company”) is a development stage company and was incorporated in Nevada on September 18, 2007. The Company was a “shell” company as defined in SEC Release No. 33-8587 at II A3 until filing of Form 8-K on April 01, 2011.  New management is in the process of determining the course(s) of business and/or acquisition of assets that the Company may intend to pursue. In that regard, Axius intends to link world cultures and business enterprise together under a common umbrella in Dubai, UAE; its mission being to improve business effectiveness within the Middle East and Africa region, by integrating International Business Standards to its clientele.


Axius, Inc. 100% Wholly owned subsidiary, Dr. Jules Nabet Cosmetics, Inc. distributs a line of 10 Skin Creams developed by Dr. Jules Nabet. Dr. Jules Nabet Cosmetics owns the North American rights and worldwide Internet rights to these products.


Development Stage Company


The accompanying financial statements have been prepared in accordance with generally accepted accounting principles related to development-stage companies.  A development-stage company is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenues therefrom.


Basis of Presentation


The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Form 10-K filed with the SEC as of and for the period ended October 31, 2010.  In the opinion of management, all adjustments necessary in order for the financial statements to be not misleading have been reflected therein.  The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.


Accounting Basis


The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting).  The Company has adopted an October 31 fiscal year end.


Cash and Cash Equivalents


Axius considers all highly liquid investments with maturities of three months or less to be cash equivalents.  At July 31, 2011 and October 31, 2010, the Company had $106,104 and $24,949 of cash, respectively.


Fair Value of Financial Instruments


The Company’s financial instruments consist of cash and cash equivalents, prepaid expenses, accrued expenses and notes payable. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.


Income Taxes


Income taxes are computed using the asset and liability method.  Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws.  A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.


Use of Estimates


The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual results could differ from those estimates.



8



AXIUS INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

July 31, 2011



NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


Revenue Recognition


The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.


Foreign Currency


Axius maintains both U.S. Dollar and Canadian Dollar bank accounts.  The functional currency is the U.S. Dollar.  Transactions in foreign currencies other than the functional currency, if any, are re-measured into the functional currency at the rate in effect at the time of the transaction.  Re-measurement gains and losses that arise from exchange rate fluctuations are included in income or loss from operations.  Monetary assets and liabilities denominated in Canadian Dollars are translated into U.S. Dollars at the rate in effect at the balance sheet date.  Revenue and expenses denominated in Canadian Dollars are translated at the average exchange rate.


Basic Income (Loss) Per Share


Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of July 31, 2011.


Stock-Based Compensation


Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718.  To date, the Company has not adopted a stock option plan and has not granted any stock options.


Recent Accounting Pronouncements


Axius does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.


NOTE 2 – PREPAID EXPENSES


Prepaid expenses consisted of prepaid rent of $4,164 as of July 31, 2011.


NOTE 3 – ACCRUED EXPENSES


Accrued expenses consisted of amounts due to the Company’s legal counsel of $25,000 and outstanding invoices of $17,985 as of July 31, 2011.


NOTE 4 – NOTE PAYABLE – RELATED PARTY


At November 30, 2010, the Company had a note payable due to HMM Corporate Services Ltd. for $109,575. The loan was unsecured, non-interest bearing and due on demand. On January 28, 2011, $90,000 of the loan was converted to 900,000 shares of common stock.



9



AXIUS INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

July 31, 2011



NOTE 5 – COMMON STOCK


The Company has 100,000,000 shares of $0.001 par value common stock authorized and 10,000,000 shares of $0.001 par value preferred stock authorized.


During the period ended July 31, 2011, 1,000,000 shares of Axius, Inc. were purchased by United Management LTD for $.10 per share, $90,000 of the note payable due to HMM Corporate Services LTD was converted to 900,000 shares of common stock, 2,000,000 shares with a value of $200,000 was issued to Alpha Global Industries, Ltd (AGI) for the assignment of AGIs future commissions from Evora, 1,000,000 shares was purchased by AGI for $100,000, 700,000 shares was purchased by Roland Kaufman at $.10 per share for $70,000, 2,953,500 shares of Axius were issued for services rendered at $.10 per share with a value $295,350 as follows:  1,000,000 shares to Roland Kaufman; 1,000,000 shares to John Figliolini; 100,000 shares to Gary Wolff; 500,000 shares to Dr. Jules Nabet; 3,500 shares to Brown Brothers Harriman & Co; 250,000 shares to Dr. Kathy Gohar; 100,000 shares to Yann Mrazek.


The Company has 10,703,500 shares of common stock and 0 shares of preferred stock issued and outstanding as of July 31, 2011.


NOTE 6 – COMMITMENTS AND CONTINGENCIES


The Company neither owns nor leases any real or personal property. An officer has provided office services without charge.  There is no obligation for this arrangement to continue.  Such costs are immaterial to the financial statements and accordingly are not reflected herein.


NOTE 7 – MATERIAL EVENTS


On December 13, 2010, Axius (“The Company”) incorporated a wholly owned subsidiary in Delaware called Dr Jules Nabet Cosmetics, Inc.  On January 4, 2011 this subsidiary entered into a North American Distribution agreement with French Cosmetics Centre of the UK to distribute a line of skincare products under the Dr. Jules Nabet brand.


On December 15, 2010 the Company executed a private placement subscription agreement and received $100,000 for 1,000,000 units (each unit consisting of 1 share of common stock and 1 warrant) at $.10 per unit with a related party.  The warrants expire in 60 months and have certain restrictions and are callable by the Company under certain conditions.  Five warrants can be exercised to purchase 1 share of common stock at $.50 per share.


On May 9, 2011 Dr Jules Nabet Cosmetics, Inc opened its online business.  Its website is: www.drjulesnabetskincare.com.


There is currently an intercompany loan of $139,493.

 

The ability of Axius to continue as a going concern is dependent on the Company generating cash from the sale of its common stock and/or obtaining debt financing and attaining future profitable operations.  Management’s plans include selling its equity securities and obtaining debt financing to fund its capital requirement and ongoing operations; however, there can be no assurance the Company will be successful in these efforts.


NOTE 8 – INCOME TAXES


As of July 31, 2011, the Company had net operating loss carry forwards of approximately $626,261 that may be available to reduce future years’ taxable income through 2030. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.


The provision for Federal income tax consists of the following:


  

  

2011

  

  

2010

  

Federal income tax benefit attributable to:

  

 

  

  

 

  

Current Operations

  

$

172,004

  

  

$

20,740

  

Less: valuation allowance

  

  

(172,004

)

  

  

(20,740

)

Net provision for Federal income taxes

  

$

0

  

  

$

0

  




10



AXIUS INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

July 31, 2011



NOTE 8 – INCOME TAXES (CONTINUED)


The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:

 

  

  

2011

  

  

2010

  

Deferred tax asset attributable to:

  

 

  

  

 

  

Net operating loss carryover

  

$

212,744

  

  

$

40,740

  

Less: valuation allowance

  

  

(212,744

)

  

  

(40,740

)

Net deferred tax asset

  

$

0

  

  

$

0

  


Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $120,000 for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited as to use in future years.


NOTE 9 – SUBSEQUENT EVENTS


On December 13, 2010 Axius, Inc. incorporated a wholly owned subsidiary in Delaware called Dr. Jules Nabet Cosmetics, Inc. On January 4, 2011 this subsidiary entered into a North American Distribution agreement with French Cosmetics Centre of the UK to distribute a line of skincare products under the Dr. Jules Nabet brand.

 

On May 9, 2011, the subsidiary commenced its online skincare products business.


Management has evaluated subsequent events through September 7, 2011, the date these financial statements were issued, and has determined it does not have any material subsequent events to disclose other than those mentioned above.




11



  



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


Forward-Looking Statements


Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.


Company Overview


The Company was a “shell” company as defined in SEC Release No. 33-8587 at II A3 until filing of Form 8-K on April 01, 2011. New management is in the process of determining the course(s) of business and/or acquisition of assets that the Company may intend to pursue. In that regard, Axius intends to link world cultures and business enterprise together under a common umbrella in Dubai, UAE; its mission being to improve business effectiveness within the Middle East and Africa region, by integrating International Business Standards to its clientele.

 

Significant Equipment


We do not intend to purchase any significant equipment for the next twelve months.


Financing


We intend to obtain business capital through the use of private equity fundraising or shareholders loans. We will need financing in order to implement our business plan.


On December 15, 2010, United Management LTD purchased 1,000,000 shares of common stock for $100,000. On January 28, 2011, $90,000 note payable due to HMM Corporate Services LTD was converted into 900,000 shares of common stock. On April 29, 2011, Alpha Global Industries, Ltd (AGI) purchased 1,000,000 shares of common stock for $100,000. On June 20, 2011, Roland Kaufman purchased 700,000 shares of common stock for $70,000; 2,953,500 shares were issued for services rendered at $.10 per share with a value $295,350 as follows: 1,000,000 shares to Roland Kaufman; 1,000,000 shares to John Figliolini; 100,000 shares to Gary Wolff; 500,000 shares to Dr. Jules Nabet; 3,500 shares to Brown Brothers Harriman & Co; 250,000 shares to Dr. Kathy Gohar; 100,000 shares to Yann Mrazek.


Management has also been actively looking for other business opportunities, in addition to exploring for capital.


Results of Operations for the Periods Ended July 31, 2011 and 2010 and Period from September 18, 2007 (Date of Inception) until July 31, 2011


We generated no revenue for the period from September 18, 2007 (Date of Inception) until October 25, 2010. On October 26, 2010, we received $25,000 for consulting fees and for the third quarter of 2011, our subsidiary, Dr. Jules Nabet Cosmetics Inc., generated sales of $611 from its cosmetic line.


Our Operating Expenses during the three and nine months ended July 31, 2011 were $375,596 and $502,133, compared with $82,500 and $86,500 for the three and nine months ended July 31, 2010. Our Operating Expenses for the period from September 18, 2007 (Date of Inception) to July 31, 2011 were $647,501. We, therefore, recorded net losses of $376,362 and $505,893 for the three and nine months ended July 31, 2011, compared with net losses of $82,500 and $86,500 for the three and nine months ended July 31, 2010 and a net loss of $626,261 for the period from September 18, 2007 (Date of Inception) until July 31, 2011.



12



  



Liquidity and Capital Resources


As of July 31, 2011 we had total current assets of $156,900. We had $62,560 in current liabilities as of July 31, 2011. Thus, we had working capital of $94,340 as of July 31, 2011. The current liabilities are associated with loans from HMM, legal expense accruals and outstanding invoices. The loan from HMM are for amounts advanced to pay for professional services provided by our outside independent auditors, accountant and attorneys for services rendered for periods ending on and prior to July 31, 2011. The amount is unsecured, due upon demand, and non-interest bearing. We have no commitment from any officer and director to advance funds in the future. The legal expense accrual is due to Gary Wolff PC. The outstanding invoices are to various vendors for services rendered or products purchased.


Operating activities used $587,439 in cash for the period from September 18, 2007 (Date of Inception) until July 31, 2011. Investing activities used $46,632 in cash for the period from September 18, 2007 (Date of Inception) until July 31, 2011. Financing Activities generated $740,175 in cash during the period from September 18, 2007 (Date of Inception) until July 31, 2011.


As of July 31, 2011, we had sufficient cash to operate our business at the current level for the next twelve months and insufficient cash to achieve our business goals. The success of our business plan beyond the next 12 months is contingent upon us obtaining additional financing. We intend to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.


Off Balance Sheet Arrangements


As of July 31, 2011, there were no off balance sheet arrangements.


Going Concern

 

We have positive working capital, have incurred losses since inception, have received revenues from sales of services and the sale products from our online cosmetics business. The financial statements do not include any adjustment that might be necessary if we are unable to continue as a going concern.


Our ability to continue as a going concern is dependent on generating cash from the sale of our common stock and/or obtaining debt financing and attaining future profitable operations. Management’s plans include selling our equity securities and obtaining debt financing to fund out capital requirement and ongoing operations; however, there can be no assurance we will be successful in these efforts.


Item 3. Quantitative and Qualitative Disclosures About Market Risk


A smaller reporting company is not required to provide the information required by this Item.


Item 4. Controls and Procedures


We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of July 31, 2011. This evaluation was carried out under the supervision and with the participation of our new officers of the Company , Roland Kaufman, President, Chief Executive Officer, Principal Executive Officer and Director and John Figliolini, Secretary/Treasurer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer and Director. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of July 31, 2011, our disclosure controls and procedures are effective. There have been no changes in our internal controls over financial reporting during the nine months ended July 31, 2011.


Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.



13



  



Limitations on the Effectiveness of Internal Controls


Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives and our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the 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. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.


PART II – OTHER INFORMATION


Item 1. Legal Proceedings


We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.


Item 1A: Risk Factors


A smaller reporting company is not required to provide the information required by this Item.


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


None, except as disclosed in forms 8-K filed February 4, 2011, February 24, 2011, and May 2, 2011 the latter of which is a “subsequent event”.


Item 3. Defaults upon Senior Securities


None


Item 4. Removed and Reserved


Item 5. Other Information


None


Item 6. Exhibits


Exhibit

Number


Description of Exhibit

31.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

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




14



  




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.

 

 

AXIUS, INC.

 

 

 

Date

By:

/s/ John Figliolini

 

 

Name John Figliolini

 

 

Title Chief Financial Officer

 

 

 




15