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UNITED STATES
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 February 28, 2014

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: 0001530981


NEF ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
 
 
 
Nevada
 
33-1221758
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
 
 
13809 SW 21st Terrace, Miami, FL  33175
(Address of principal executive offices)
 
(305) 487-3717
(Registrant's telephone number, including area code)
 
 
(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 (§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 the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act (Check one).

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 April 11, 2014 there were 4,662,500 shares of the issuer's common stock, par value $0.001, outstanding.
 

NEF ENTERPRISES, INC.

FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED FEBRUARY 28, 2014
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
10
 
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
14
 
ITEM 4.
CONTROLS AND PROCEDURES
14
PART II – OTHER INFORMATION
 
 
ITEM 1.
LEGAL PROCEEDINGS
15
 
ITEM 1A.
RISK FACTORS
15
 
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
15
 
ITEM 3.
DEFAULTS UPON SENIOR SECURITIES
15
 
ITEM 4.
MINE SAFETY DISCLOSURES
15
 
ITEM 5.
OTHER INFORMATION
15
 
ITEM 6.
EXHIBITS
16
SIGNATURES
17


2

PART I – FINANCIAL INFORMATION

Item 1.                  Financial Statements

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America 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 our company's Prospectus, Form 10-K, filed with the SEC on August 29, 2013. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year ended May 31, 2014.




INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED FEBRUARY 28, 2014

(Unaudited)

 
Page
 
 
Condensed Consolidated Balance Sheets
4
 
 
Condensed Consolidated Statements of Operations
5
 
 
Condensed Consolidated Statements of Cash Flows
6
 
 
Notes to Condensed Consolidated Financial Statements
7
3

NEF Enterprises, Inc. and Subsidiary
Condensed Consolidated Balance Sheets
 
 
 
February 28,
   
May 31,
 
 
 
2014
   
2013
 
 
 
(Unaudited)
   
 
ASSETS
 
   
 
Current assets
 
   
 
Cash
 
$
48,077
   
$
12,331
 
Accounts receivable, net of allowance of $7,000 and $5,000, respectively
   
25,053
     
8,730
 
Deposits and prepaid expenses
   
11,061
     
326
 
Total current assets
   
84,191
     
21,387
 
 
               
Equipment net of accumulated depreciation of $2,611 and $1,197, respectively
   
5,889
     
3,290
 
 
               
Total assets
 
$
90,080
   
$
24,677
 
 
               
LIABILITIES AND STOCKHOLDERS' EQUITY
               
 
               
Current liabilities
               
Accounts payable and accrued liabilities
 
$
17,245
   
$
2,459
 
Tax payable
   
9,700
     
-
 
Deferred revenue
   
1,685
     
-
 
Total current liabilities
   
28,630
     
2,459
 
 
               
Total liabilities
   
28,630
     
2,459
 
 
               
Stockholders' equity
               
Preferred stock,$0.001 par value; 10,000,000 shares authorized;
               
0 shares issued and outstanding
   
-
     
-
 
Common stock, $0.001 par value; 100,000,000 shares authorized;
               
4,662,500 and 3,637,500 issued and outstanding, respectively
   
4,663
     
3,638
 
Additional paid-in capital
   
49,587
     
30,112
 
Retained earnings (deficit)
   
7,200
     
(11,532
)
Total stockholders' equity
   
61,450
     
22,218
 
 
               
Total liabilities and stockholders' equity
 
$
90,080
   
$
24,677
 
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 
4

NEF Enterprises, Inc. and Subsidiary
Condensed Consolidated Statements of Operations
(Unaudited)
 
 
 
Three months ended
   
Nine Months Ended
 
 
 
February 28,
   
February 28,
 
 
 
2014
   
2013
   
2014
   
2013
 
 
 
   
   
   
 
Revenue
 
$
56,546
   
$
11,422
   
$
151,802
   
$
41,341
 
Cost of revenue
   
9,224
     
2,677
     
31,430
     
8,857
 
 
                               
Gross profit
   
47,322
     
8,745
     
120,372
     
32,484
 
 
                               
Operating expenses
                               
Selling, general and administrative
   
18,821
     
11,951
     
75,584
     
20,995
 
Professional fees
   
4,997
     
7,321
     
16,356
     
12,814
 
Total operating expenses
   
23,818
     
19,272
     
91,940
     
33,809
 
 
                               
Income (loss) from operations
   
23,504
     
(10,527
)
   
28,432
     
(1,325
)
 
                               
Provision for income taxes
   
9,700
     
-
     
9,700
     
-
 
 
                               
Net income (loss)
 
$
13,804
   
$
(10,527
)
 
$
18,732
   
$
(1,325
)
 
                               
Basic and diluted income (loss) per common share
 
$
0.00
   
$
(0.00
)
 
$
0.00
   
$
(0.00
)
 
                               
Basic and diluted weighted-average common shares outstanding
   
4,662,500
     
3,316,944
     
4,403,434
     
2,847,344
 
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 
5

NEF Enterprises, Inc. and Subsidiary
Condensed Consolidated Satements of Cash Flows
(Unaudited)
 
 
 
For the Nine Months Ended
 
 
 
February 28,
 
 
 
2014
   
2013
 
 
 
   
 
Cash flows from operating activities:
 
   
 
Net income
 
$
18,732
   
$
(1,325
)
Adjustments to reconcile net income to net
               
 cash provided by (used in) operating activities:
               
Allowance for doubtful accounts
   
2,000
     
-
 
Depreciation expense
   
1,414
     
486
 
Changes in assets and liabilities:
               
Accounts receivable
   
(18,323
)
   
588
 
Deposits and prepaid expenses
   
(10,735
)
   
1,677
 
Accounts payable and accrued liabilities
   
14,786
     
4,753
 
Income taxes payable
   
9,700
     
-
 
Deferred revenue
   
1,685
     
(625
)
Net cash provided by operating activities
   
19,259
     
5,554
 
 
               
Cash flows from investing activities:
               
Purchase of property and equipment
   
(4,013
)
   
(3,272
)
Net cash used in investing activities
   
(4,013
)
   
(3,272
)
 
               
Cash flows from financing activities:
               
Proceeds from issuance of common stock
   
20,500
     
20,750
 
Net cash provided by financing activities
   
20,500
     
20,750
 
 
               
Net increase in cash and cash equivalents
   
35,746
     
23,032
 
Cash and cash equivalents at beginning of period
   
12,331
     
769
 
 
               
Cash and cash equivalents at end of period
 
$
48,077
   
$
23,801
 
 
               
Supplemental disclosure of cash flow information:
               
Cash paid during the period for interest
 
$
-
   
$
-
 
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 
6

NEF Enterprises, Inc.
Notes to Condensed Consolidated Financial Statements
February 28, 2014
(Unaudited)

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Organization and Business Activity

NEF Enterprises, Inc. (the "Company") was incorporated in the State of Nevada on July 11, 2011.  The Company was originally incorporated as New Era Filing Services Inc. and changed its name to NEF Enterprises, Inc. on October 4, 2011.  The Company incorporated a wholly-owned subsidiary, PubCo Reporting Services, Inc., formerly known as New Era Filing Services, Inc., in Florida on September 28, 2011.

The Company offers Securities Exchange Commission ("SEC") compliance filing services, through its wholly-owned subsidiary.  Our clients are companies and individuals with SEC reporting requirements.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, PubCo Reporting Services, Inc. All significant intercompany balances and transactions have been eliminated in these consolidated financial statements.

Condensed Financial Statements

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's May 31, 2013 audited financial statements.  The results of operations for the periods ended February 28, 2014 are not necessarily indicative of the operating results for the full years.

Basis of Presentation

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (GAAP).  These audited financial statements include all adjustments that, in the opinion of management, are necessary in order to make the financial statements not misleading.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual results could differ from those estimates. The Company's periodic filings with the Securities and Exchange Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future operations of the Company.

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value.  The Company had $48,077 and $12,331 in cash and cash equivalents at February 28, 2014 and May 31, 2013, respectively.


7

Concentrations of Credit Risks

The Company's financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and related party payables it will likely incur in the near future.  The Company places its cash and cash equivalents with financial institutions of high credit worthiness.  At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits.  The Company's management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.

Property, Plant and Equipment

Computer equipment is stated at cost, net of accumulated depreciation. Depreciation on computer equipment is computed using the straight-line method over the estimated useful lives of the equipment, generally three years. Depreciation begins in the month of acquisition.

Accounts Receivable

Accounts receivable consist of charges for service provided to customers. An allowance for doubtful accounts is considered to be established for any amounts that may not be recoverable, which is based on an analysis of the Company's customer credit worthiness, and current economic trends.  Based on management's review of accounts receivable, a $7,000 and $5,000 allowance for doubtful accounts was recorded as at February 28, 2014 and May 31, 2013, respectively.   Receivables are determined to be past due, based on payment terms of original invoices.  The Company does not typically charge interest on past due receivables.

Advertising

The costs of advertising are expensed as incurred.  Advertising expense was $14,733 and $700 for the nine months ended February 28, 2014 and 2013, respectively.
 
Foreign Currency Translations

The Company's functional and reporting currency is the U.S. dollar. All transactions initiated in a foreign currency are translated into U.S. dollars in accordance with ASC 830-30, "Translation of Financial Statements," as follows:

 
(i) 
Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date.
 
(ii) 
Equity at historical rates.
 
(iii) 
Revenue and expense items at the average rate of exchange prevailing during the period.

Adjustments arising from such translations are deferred until realization and are included as a separate component of stockholders' equity as a component of comprehensive income or loss.  Therefore, translation adjustments are not included in determining net income (loss) but reported as other comprehensive income.
 
For foreign currency transactions, the Company translates these amounts to the Company's functional currency at the exchange rate effective on the invoice date.  If the exchange rate changes between the time of purchase and the time actual payment is made, a foreign exchange transaction gain or loss results which is included in determining net income for the period.  No significant realized exchange gains or losses were recorded for the nine months ended February 28, 2014 and 2013.
 
Revenue Recognition

The Company recognizes revenue from the sale of services in accordance with ASC 605, "Revenue Recognition."  Revenue consists of SEC compliance services; focusing on corporate and individual reporting requirements. Sales income is recognized only when all of the following criteria have been met:

i) Persuasive evidence for an agreement exists;
ii) Service has been provided;
iii) The fee is fixed or determinable; and
iv) Collection is reasonably assured.

Deferred revenue is recognized for amounts paid by clients in advance of work performed.  As of February 28, 2014 and May 31, 2013, we recorded deferred revenue of $1,685 and $0, respectively.

8

Income (Loss) per Share

The Company has adopted ASC 260, "Earnings Per Share," ("EPS") which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures, and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation.  In the accompanying financial statements, basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period.

The Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.

Recent Accounting Pronouncements
 
Management has considered all recent accounting pronouncements issued since the last audit of our consolidated financial statements. The Company's management believes that these recent pronouncements will not have a material effect on the Company's consolidated financial statements.
 
NOTE 3 – SHAREHOLDER'S EQUITY

Authorized Stock

The Company has authorized 100,000,000 common shares and 10,000,000 preferred shares, both with a par value of $0.001 per share. The Board of Directors are authorized to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes.  Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

Common Share Issuances

Since inception (July 11, 2011) to February 28, 2014, the company has issued a total of 4,662,500 common shares for $54,250 cash, as follows:

· On July 14, 2011, the Company issued to an officer and director 200,000 shares at $0.005 per share for $1,000 cash.
· On May 31, 2012, the Company issued to officers and directors 2,400,000 shares at $0.005 per share for $12,000 cash.
· During November 2012 to January 2013, the Company issued to unaffiliated investors 1,037,500 shares at $0.02 per share for $20,750 cash.
· On August 9, 2013, the Company issued to unaffiliated investors 1,025,000 shares at $0.02 per share for $20,500.

Preferred Share Issuances

There were no preferred shares issued from inception (July 11, 2011) to the period ended February 28, 2014.

NOTE 4 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events for potential disclosure or recognition to the date of the consolidated financial statements and believes all subsequent events are properly disclosed.
 
 
9


ITEM 2.                          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses.  Such forward-looking statements include, among others, those statements including the words "expects," "anticipates," "intends," "believes" and similar language.  Our actual results may differ significantly from those projected in the forward-looking statements.  Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein as well as in the "Description of Business – Risk Factors" section in our Annual Report, Form 10-K, as filed on August 29, 2013.  You should carefully review the risks described in our Annual Report and in other documents we file from time to time with the Securities and Exchange Commission.  You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report.  We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.

All references in this Form 10-Q to the "Company," "NEF Enterprises," "we," "us," or "our" are to NEF Enterprises, Inc.

Results of Operations

We have generated revenues of $151,802 for the nine months ended February 28, 2014 and have incurred $31,430 in cost of revenue and $91,940 in operating expenses through February 28, 2014.

The following table provides selected financial data about our company as of February 28, 2014 and May 31, 2013.

Balance Sheet Data:
 
February 28, 2014
   
May 31, 2013
 
Cash
 
$
48,077
   
$
12,331
 
Accounts receivable, net
 
$
25,053
   
$
8,730
 
Equipment, Net
 
$
5,889
   
$
3,290
 
Total assets
 
$
90,080
   
$
24,677
 
Total liabilities
 
$
28,630
   
$
2,459
 
Stockholders' equity
 
$
61,450
   
$
22,218
 

Our increase in cash of $35,746 can be attributed to increased operations for the nine-month period and closing of our prospectus offering in the first quarter.  Our increase in accounts receivable, net of allowance for bad debts, of $16,323 was due to increased revenue in the period.  Our liabilities increased $26,171 due to an increase in operating accounts payable and accrued liabilities of $14,786, recording a provision for taxes payable of $9,700, and recording of deferred revenue of $1,685.

The following summary of our results of operations, for the three and nine months ended February 28, 2014 and 2013, should be read in conjunction with our consolidated financial statements, as included in this Form 10-Q.

10

For the Three Months ended February 28, 2014 and 2013:

 
 
Three Months Ended February 28,
 
 
 
2014
   
2013
 
Revenue
 
$
56,546
   
$
11,422
 
Cost of revenue
   
9,224
     
2,677
 
Gross profit
   
47,322
     
8,745
 
Operating Expenses
               
Selling, general and administrative
   
18,821
     
11,951
 
Professional fees
   
4,997
     
7,321
 
Total Operating expenses
   
23,818
     
19,272
 
Operating income (loss)
   
23,504
     
(10,527
)
Provision for income tax
   
(9,700
)
   
-
 
Net Income (Loss)
 
$
13,804
   
$
(10,527
)

Revenue

Our revenues are derived from our EDGAR, XBRL, SEDAR and Accounting services.  We earned revenues of $56,546 for the three months ended February 28, 2014, compared to revenues of $11,422 for the same period ended February 28, 2013.  Increased revenues for the period ended in 2014 can be attributed to our growing customer base due to the advertising and marketing initiatives we undertook during the previous year. Our customer base has increased significantly over the same period last year.

Gross profit

Gross profit is determined by subtracting our costs directly related to earning our revenue, which are our software licensing and contractor fees, from revenues generated. Our gross profit as a percentage of revenue was 83.7% and 76.6% for the three months ended February 28, 2014 and 2013, respectively.  Our gross profit has increased in the current period, primarily due to increased revenues in services that provide higher margins.

Expenses

Operating expenses for the three months ended February 28, 2014, increased by $4,546 or 23.6% as compared to the comparative period in 2013.  The increase in expenses can be attributed to mainly increased advertising and promotional fees, management fees, office and communication expenses as we have expanded operations significantly as compared to the period ended 2013. Our selling, general, and administrative expenses increased from $11,951 to $18,821 for the comparable period ended February 28, 2013 due to significant increases in advertising, office, telecommunications and meals and promotional expenses. Our professional fees decreased from $7,321 to $4,997 for the comparable period ended February 28, 2013, due to legal and accounting fees related to filing our Form S-1 registration statement during the quarter ended February 28, 2013.

11

For the Nine Months ended February 28, 2014 and 2013:

 
 
Nine Months Ended February 28,
 
 
 
2014
   
2013
 
Revenue
 
$
151,802
   
$
41,341
 
Cost of revenue
   
31,430
     
8,857
 
Gross profit
   
120,372
     
32,484
 
Operating Expenses
               
Selling, general and administrative
   
75,584
     
20,995
 
Professional fees
   
16,356
     
12,814
 
Total Operating expenses
   
91,940
     
33,809
 
Operating income (loss)
   
28,432
     
(1,325
)
Provision for income tax
   
(9,700
)
   
-
 
Net income (loss)
 
$
18,732
   
$
(1,325
)
 
Revenue

Our revenues are derived from our EDGAR, XBRL, SEDAR and accounting services.  We earned revenues of $151,802 for the nine months ended February 28, 2014, compared to revenues of $41,341 for the same period ended February 28, 2013.  Increased revenues for the nine-month period ended in 2014 can be attributed to our growing customer base due to the advertising and marketing initiatives we undertook during the previous year. Our customer base has increased significantly over the same period last year.

Gross profit

Gross profit is determined by subtracting our costs directly related to earning our revenue, which are our software licensing and contractor fees, from revenues generated. Our gross profit as a percentage of revenue was 79.3% and 78.6% for the nine months ended February 28, 2014 and 2013, respectively.  Gross profit, as a percentage, is relatively consistent to the same nine month period end 2013.

Expenses

Operating expenses for the nine months ended February 28, 2014, increased by $58,131 or an increase of 172% as compared to the comparative period in 2013.  The increase in expenses can be attributed mainly to increased professional fees, management fees, office and communication expenses, as we have expanded operations significantly as compared to the period ended 2013. We paid $15,477 in management fees during the period ended February 28, 2014 as compared to $4,500 for the comparative period in 2013.  Our selling, general, and administrative expenses increased from $20,995 in February 28, 2013 to $75,584 for the comparable nine month period ended February 28, 2014 due to significant increases in advertising, office, telecommunications and meals and promotional expenses, and the previously mentioned management fees. Our professional fees also increased from $12,814 in February 28, 2013 to $16,356 for the comparable nine month period ended February 28, 2014 due to ongoing legal and accounting fees related to having to report with the SEC.

Limited Operating History; Need for Additional Capital

There is limited historical financial information about us on which to base an evaluation of our performance. We cannot guarantee we will be successful in our business operations.  Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in our rebranding efforts, and possible cost overruns due to the price and cost increases in supplies and services.

At present, we only have enough cash on hand to cover costs associated with running our operations.
 
12

Liquidity and Capital Resources

To meet our need for cash we raised money from our recent Offering.  On February 6, 2013, the Company filed a Prospectus as part of its Registration Statement on Form S-1, under which the Company sought to raise $60,000 through the Offering.  On August 15, 2013, the Company closed its Offering and will not sell any additional shares under this Prospectus.  The Company sold 1,025,000 shares under the Prospectus, raising a total of $20,500.

Currently we have sufficient capital to fund our business development for the next 12 months.
 
Working Capital

 
As at
   
As at
 
 
February 28,
   
May 31,
 
 
2014
   
2013
 
       
Current Assets
 
$
84,191
   
$
21,387
 
Current Liabilities
 
$
28,630
   
$
2,459
 
Working Capital
 
$
55,561
   
$
18,928
 

Cash Flows

 
 
For The Nine Months Ended February 28,
 
 
 
2014
   
2013
 
 
 
   
 
Cash Flows provided by Operating Activities
 
$
19,259
   
$
5,554
 
Cash Flows used in Investing Activities
 
$
(4,013
)
 
$
(3,272
)
Cash Flows from Financing Activities
 
$
20,500
   
$
20,750
 
Net Increase in Cash During Period
 
$
35,746
   
$
23,032
 

As at February 28, 2014, our company's cash balance was $48,077 compared to $12,331 as at May 31, 2013 and our total assets were $90,080 compared with $24,677 as at May 31, 2013. The increase in cash and total assets was primarily due increased revenues for the nine-month period ended February 28, 2014 and the closing of our public offering on August 15, 2013.

As at February 28, 2014, our company had total liabilities of $28,630 compared with total liabilities of $2,459 as at May 31, 2013.  Our liabilities increased $26,171 due to increase in operating accounts payable and accrued liabilities of $14,786, recording a provision for taxes payable of $9,700, and recording of deferred revenue of $1,685.

As at February 28, 2014, our company had working capital of $55,561 compared with a working capital of $18,928 as at May 31, 2013. The increase in working capital was primarily attributed to the closing of our public offering and increased revenues during the quarter ended February 28, 2014, resulting in higher cash and accounts receivable balances as compared to May 31, 2013.

Cash Flow from Operating Activities

During the nine months ended February 28, 2014, our company provided $19,259 in cash from operating activities, compared to $5,554 of cash provided by operating activities during the period ended February 28, 2013. The cash provided from operating activities was attributed to the company emerging from the development stage and generating income from operations, in the current period.

Cash Flow from Investing Activities

During the nine months ended February 28, 2014, our company used cash in investing activities of $4,013, compared to $3,272 of cash used in operating activities during the period ended February 28, 2013.  The cash used in 2014 and 2013 was for the purchase of computer equipment.

Cash Flow from Financing Activities

During the nine month period ended February 28, 2014, our company received $20,500 in cash from financing activities due from proceeds from the issuance of common shares, compared to cash provided by financing activities of $20,750 for the period ended February 28, 2013, due from proceeds from the issuance of common shares.

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Critical Accounting Policies

We prepare our condensed consolidated financial statements in conformity with GAAP, which requires management to make certain estimates and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the condensed consolidated financial statements are prepared. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions.  On a regular basis, we review our critical accounting policies and how they are applied in the preparation of our condensed consolidated financial statements.

While we believe that the historical experience, current trends and other factors considered support the preparation of our condensed consolidated financial statements in conformity with GAAP, actual results could differ from our estimates and such differences could be material.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.


ITEM 3.                          QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a "smaller reporting company", we are not required to provide the information required by this Item.

ITEM 4.                          CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of February 28, 2014, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee, (2) lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (3) inadequate segregation of duties consistent with control objectives; and (4) management dominated by a single individual without adequate compensating controls. The aforementioned material weaknesses were identified by our Chief Executive and Financial Officer in connection with the review of our financial statements as of February 28, 2014.

Management believes that the material weaknesses set forth above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

Changes in Internal Controls

There have been no changes in our internal controls over financial reporting identified in connection with the evaluation required by paragraph (d) of Securities Exchange Act Rule 13a-15 or Rule 15d-15 that occurred in the quarter ended February 28, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1.                          LEGAL PROCEEDINGS

We know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our company.

ITEM 1A.                          RISK FACTORS

As a "smaller reporting company", we are not required to provide the information required by this Item.

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

We did not issue unregistered equity securities during the quarter ended February 28, 2014.

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

Exhibit Number
Description
 (3)
(i) Articles of incorporation, (ii) Bylaws
3.1
Articles of Incorporation (Incorporated by reference to our Registration Statement on Form S-1 filed on February 6, 2013)
3.3
Bylaws (Incorporated by reference to our Registration Statement on Form S-1 filed on February 6, 2013)
(31)
Rule 13a-14(d)/15d-14(d) Certifications
31.1*
Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer
(32)
Section 1350 Certifications
32.1*
Section 906 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer
101**
Interactive Data Files
101.INS
XBRL Instance Document
101.SCH
XBRL Taxonomy Extension Schema Document
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
XBRL Taxonomy Extension Label Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
 
 
 
 
*
Filed herewith
**
Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of any registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections.
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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.

 
NEF ENTERPRISES, INC.
 
 
Dated:  April 15, 2014
 
 
          
/s/ Roldis Estevez                                
 
Roldis Estevez,
 
President and Chief Financial Officer.
 
Principle Executive Officer
 
Principle Financial Officer


17