NewBridge Global Ventures, Inc. - Quarter Report: 2016 June (Form 10-Q)

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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 June 30, 2016

[  ] 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 0-11730

(Exact name of registrant as specified in its charter)

801-592-3000
(Registrant's telephone number, including area code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec.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 ☑  No ☐

Indicate by check mark whether the registrant is a large accelerated filed, 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.

 

Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☐		Smaller reporting company ☑ (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 ☑

As of August 5, 2016, the registrant had 20,941,286 shares of common stock, par value $0.0001, issued and outstanding.

NABUFIT GLOBAL, INC. AND SUBSIDIARY

FORM 10-Q

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

NABUFIT GLOBAL, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
		June 30,				December 31,
		2016				2015
		(Unaudited)
ASSETS
Current Assets
Cash		$	103,997			$	1,133,247
Prepaid expenses and other current assets			73,414				172,939
Stock subscription receivable			1,383,726				-
Deposits			60,105				7,646
Total current assets			1,621,242				1,313,832
Total Assets		$	1,621,242			$	1,313,832
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable		$	108,818			$	19,082
Accrued liabilities			178,778				33,706
Total current liabilities			287,596				52,788
Total Liabilities		$	287,596			$	52,788
Commitments and Contengiencies			-				-
STOCKHOLDERS'  EQUITY
Preferred stock, $.0001 par value, 400,000 shares authorized; no shares
issued and outstanding			-				-
Common stock $.0001 par value, 100,000,000 shares authorized;
20,941,286 and 19,437,236 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively.			2,094				1,944
Additional paid-in capital			3,055,450				1,671,874
Accumulated deficit			(1,711,026	)			(372,396	)
Accumulated other comprehensive loss			(12,872	)			(40,378	)
Total stockholders' equity			1,333,646				1,261,044
Total Liabilities and Stockholders' Equity		$	1,621,242			$	1,313,832

 

See accompanying notes to the condensed consolidated financial statements.

NABUFIT GLOBAL, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(Unaudited)
		For the Three				For the Six
		Months Ended				Months Ended
		June 30, 2016				June 30, 2016
Operating Expenses:
Selling, general and administrative		$	810,889			$	1,338,735
Total Operating Expenses			810,889				1,338,735
Loss from Operations			(810,889	)			(1,338,735	)
Interest income			6				141
Interest expense			(19	)			(36	)
Net Loss		$	(810,902	)		$	(1,338,630	)
Net loss per common share - basic and diluted		$	(0.04	)		$	(0.07	)
Weighted average common shares
outstanding - basic and diluted			19,470,292				19,453,855
Comprehensive Loss:
Net Loss		$	(810,902	)		$	(1,338,630	)
Other Comprehensive Loss
Translation adjustments			(4,746	)			27,506
Total Comprehensive Loss		$	(815,648	)		$	(1,311,124	)

See accompanying notes to the condensed consolidated financial statements.

NABUFIT GLOBAL, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2016 (UNAUDITED)
Net loss		$	(1,338,630	)
Adjustments to reconcile net loss to net cash used in operating activities:
Changes in operating assets and liabilities:
Prepaid expenses and other current assets			149,727
Deposit			(52,294	)
Accounts payable			89,410
Accrued liabilities			95,118
Net Cash Used in Operating Activities			(1,056,669	)
Effect of exchange rate changes on cash			27,419
Net Decrease in Cash			(1,029,250	)
Cash at Beginning of Period			1,133,247
Cash at End of Period		$	103,997
Noncash Investing and Financing Information:
Shares of common stock issued for subscriptions		$	1,383,726
Supplemental Disclosures of Cash Flow Information:
Cash Paid for Interest		$	36
Cash Paid for Taxes			-

See accompanying notes to the condensed consolidated financial statements.

NABUFIT GLOBAL, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 — THE COMPANY AND BASIS OF PRESENTATION

Financial Statement Presentation — The accompanying condensed consolidated financial statements for NABUfit Global, Inc. ( "NABUfit Global") and its wholly-owned subsidiary NABUfit Global ApS ("NABUfit Denmark") (collectively "NABUfit," "we", or "the Company") are presented in conformity with accounting principles generally accepted in the United States of America.

Nature of Operations — The Company designs, manufactures and markets the NABUfit virtual training and fitness products and services, a state-of-the-art online fitness portal ("NABUfit" or, the "Product") with the option of connecting existing and future monitoring devices (wearables, etc.) to the portal. The Product incorporates interaction and input through Microsoft(R) Kinect(R) and other technologies and the option for personal data collection, coaching and teaching through mentor services.

 

Customers obtain access to the Product portal through the purchase of monthly or annual memberships and the downloading of the software or mobile device application.  The Product provides custom designed training plans, diet plans and access to mentors and coaching.

 

Through Microsoft(R) Kinect(R), the NABUfit technology collects data and measures each exercise relatively to a set standard and past performances.  Based on the data collection and registration in the Kinect(R) module the user will receive immediate feedback, e.g. as a percentage, a graphic or an emoticon depending on how well the exercise has been performed. This provides a unique quality assurance ensuring maximum effect of the training. The quick feedback will also reduce the risk of injuries and streamline time spent on training.  Users can access training data, statistics and results online or through mobile device applications.

Membership of the portal will be divided into two levels – a basic membership and a VIP membership.  The difference between the levels of membership will be primarily based upon the access to features and to mentors.

 

The portal also offers a social forum for its users, where users can interact with like-minded members and train with them virtually. Some people will experience increased motivation by being part of a group. The member can allow others to see all or part of his profile. The personal profiles of the members can be matched, so the portal will suggest network and training mates, and thereby helping to ensure the optimum composition. It will be possible to do real-time training with training mates by sharing the screen in a videoconference on the portal.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Information – The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC").  Accordingly, they are condensed and do not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements.  In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature.  The results of operations for the three and six months ended June 30, 2016, may not be indicative of the results that may be expected for the year ending December 31, 2016.

 

These financial statements should be read in conjunction with the financial statements and notes thereto which are included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 and the Registration Statement on Form S-1 (No. 333-210325). The accounting policies set forth in those annual financial statements are the same as the accounting policies utilized in the preparation of these financial statements, except as modified for appropriate interim financial statement presentation.

Principles of Consolidation —The accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America and include operations and balances of NABUfit Global, Inc. and its wholly-owned subsidiary NABUfit Global, ApS, ("NABUfit Denmark").  NABUfit Denmark is a Danish company organized June 26, 2015 in Denmark.  Intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 amounts of revenue and expenses during the reporting period.  Actual results could differ from those estimates.

Fair Value – The fair values of the Company's financial assets and liabilities approximate their carrying amounts at the reporting date.

Foreign Currency Transactions and Translations – The functional currency of NABUfit Denmark is the Danish Krone (DKK), while the functional currency of NABUfit Global and the reporting currency is U.S. dollars (USD).  The Company translates the assets and liabilities of NABUfit Denmark from the functional currency to U.S. dollars at the appropriate spot rates as of the balance sheet date. Equity balances are translated using historical exchange rates. Changes in the carrying value of these assets and liabilities attributable to fluctuations in spot rates are recognized in foreign currency translation adjustment, a component of accumulated other comprehensive income. Income statement accounts are translated using the average exchange rate during the period.

Monetary assets and liabilities denominated in a currency that is different from the functional currency must first be re-measured from the applicable currency to the functional currency. The effect of this re-measurement process is recognized translation adjustments in our statement of comprehensive loss.

The Company had no foreign currency transaction gains or losses during the period from June 26, 2015 (date of inception) through June 30, 2016.

 

Business Condition – The Company's Registration Statement filed on Form S-1 (File No. 333-210325) was declared effective on June 13, 2016, which Registration Statement registered for the offering and sale of up to 5,000,0000 shares of common stock at $1.75 per share.  On July 15, 2016, the Company closed on the sale of 1,504,050 shares of its common stock pursuant to subscription agreements dated on or about June 29, 2016.  The Shares were sold at a price of $0.92 per shares and were offered pursuant to the Registration Statement.  The proceeds from this offering are expected to provide the liquidity necessary for the operations of the Company in the foreseeable future. The ability of the Company to continue as a going concern is dependent on the success of that plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern (see Note 3—Going Concern).

Cash and Cash Equivalents – The balance in cash and cash equivalents consists of cash reserves held in bank accounts. The Company maintains cash balances in bank accounts that, at times, exceed federally insured limits.  The Company has not experienced any losses in these accounts and believes it is not exposed to any significant risk with respect to cash.

 

Revenue Recognition – The Company recognizes revenue when persuasive evidence of an arrangement exists, performance of the service has occurred, the sales price charged is fixed or determinable, and collectability is reasonably assured.  Revenue is net of taxes and discounts and is recorded on an accrual basis.

Software Development Costs – The Company expenses software development costs until the Company has a working business model for the software.

Income Taxes – The Company accounts for income taxes pursuant to Accounting Standards Codification (ASC) 740, Income Taxes, which requires the use of the asset and liability method of accounting for deferred income taxes.  We recognize deferred tax liabilities and assets based on the differences between the tax basis of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years.

All allowances against deferred income tax assets are recorded in whole or in part, when it is more likely than not those deferred income tax assets will not be realized.  Deferred tax assets and liabilities are measured using enacted tax rates expected to be recovered or settled. 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.

A valuation allowance is required to the extent it is more-likely-than-not that a deferred tax asset will not be realized. ASC 740 also requires reporting of taxes based on tax positions that meet a more-likely-than-not standard and are measured at the amount that is more-likely-than-not to be realized. Differences between financial and tax reporting which do not meet this threshold are required to be recorded as unrecognized tax benefits.

Basic and Diluted Loss Per Share – Basic loss per common share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per common share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period giving effect to potentially dilutive common stock equivalents.  As of June 30, 2016, the Company had no common stock equivalents outstanding.

New Accounting Pronouncements – The Company does not expect the adoption of any recent accounting pronouncements to have a material impact on its financial statements.

NOTE 3 – GOING CONCERN

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As shown in the accompanying condensed consolidated financial statements, the Company incurred a net loss of $1,338,630 for the six months ended June 30, 2016 and has an accumulated deficit of $1,711,026 as of June 30, 2016.  The Company also used cash in operating activities of $1,056,669 during the six months ended June 30, 2016.   These factors raise substantial doubt about the Company's ability to continue as a going concern.

In order for the Company to continue as a going concern, the Company expects to obtain additional debt and/or equity financing.  The Company is regularly and continually seeking additional funding from investors and from time to time is in various stages of negotiations.  Nonetheless, to date the Company has not accomplished a financing of the size needed to put the Company on a stable operating basis. There can be no assurance that the Company will be able to secure additional debt or equity financing, that it will be able to attain positive cash flow operations, or that, if it is successful in any of those actions, those actions will produce adequate cash flow to enable it to meet our future obligations. All of our existing financing arrangements are short-term. If the Company is unable to obtain additional debt and/or equity financing, it may be required to significantly reduce or cease operations.

 

NOTE 4 – LEASES

On December 1, 2015, the Company signed a new lease on their office in Fredericia Denmark, which replaced the prior lease and allowed the Company to move to larger office space (159 square meters) within the same building.  The new rent is DKK 13,184 per month ($2,009) and the security deposit increased to DKK 80,685 ($12,294).  The lease can be terminated with a six month notice, but not before December 1, 2017.  Rent will increase annually on January 1 based on the consumer price index, with a minimum increase of 2% per year.

Effective March 1, 2016, the Company signed Appendix 1 to the Fredericia lease agreement moving the office to a 190 square meter office located on the first floor of the building.  The rent and security deposit were not changed by the Appendix.  Once the Company utilizes the additional 31 square meters, the rent will increase proportionately.

NOTE 5 – SHAREHOLDERS' EQUITY

We have authorized capital stock consisting of 100,000,000 shares of $0.0001 par value common stock and 400,000 shares of $0.0001 par value preferred stock. As of June 30, 2016 and December 31, 2015, we had 20,941,286 and 19,437,236 shares of common stock issued and outstanding, and no shares of preferred stock issued and outstanding.

On July 15, 2016, the Company announced the closing of the sale of 1,504,050 shares of its common stock for $1,383,726 or $0.92 per share. The sale of the Shares was registered pursuant to the Registration Statement on Form S-1 (File No. 333-210325) declared effective on June 13, 2016 and was made pursuant to subscription agreements dated on or about June 29, 2016.

NOTE 6 – SHARE-BASED COMPENSATION

On September 30, 2015 NABUfit Global issued 30,000 shares of its common stock to two outside directors: Soren Jonassen and Ole Sigetty for their services through June 30, 2016. The shares issued were valued at $4.00 per share for a total of $240,000, which was the market price of the stock on the issuance date. Share-based compensation of $120,000 was recorded for the six months ended June 30, 2016.

NOTE 7 – SUBSEQUENT EVENT

During July 2016, the Company collected the full balance on the stock subscription receivable of $1,383,726.

Item 2.  Management's Discussion and Analysis of Financial Condition and

 Results of Operations

The following discussion is intended to assist you in understanding our results of operations and our present financial condition.  Our condensed financial statements and the accompanying notes included in this quarterly report on Form 10-Q contain additional information that should be referred to when reviewing this material.

Forward-Looking Information and Cautionary Statements

This quarterly report contains forward-looking statements as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  These statements relate to future events or our future financial performance.  In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology.  Such statements are based on currently available financial and competitive information and are subject to various risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations.  Undue reliance should not be placed on such forward-looking statements as such statements speak only as of the date on which they are made.  These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.  Such factors include, but are not limited to, market factors, market prices and marketing activity, future revenues and costs, unsettled political conditions, civil unrest and governmental actions, foreign currency fluctuations, and environmental and labor laws and other factors detailed herein and in our other filings with the U.S. Securities and Exchange Commission (the "Commission") filings.    Additional factors that may cause actual results, our performance or achievements, or industry results, to differ materially from those contemplated by such forward-looking statements include without limitation:

·

our ability to raise capital when needed and on acceptable terms and conditions;

·

our ability to identify and acquire a viable operating business;

·

our ability to attract and retain management, and to integrate and maintain technical information and management information systems;

·

the intensity of competition; and

·

general economic conditions.

Forward-looking statements are predictions and not guarantees of future performance or events.  Forward-looking statements are based on current industry, financial and economic information, which we have assessed but which by its nature, is dynamic and subject to rapid and possibly abrupt changes.  Our actual results could differ materially from those stated or implied by such forward-looking statements due to risks and uncertainties associated with our business.  We hereby qualify all our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of their dates and should not be unduly relied upon.  We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise (other than pursuant to reporting obligations imposed on registrants pursuant to the Securities Exchange Act of 1934)  to reflect subsequent events or circumstances. All written and oral forward-looking statements made in connection with this Quarterly Report on Form 10-Q that are attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Given the uncertainties that surround such statements, you are cautioned not to place undue reliance on such forward-looking statements.

Executive Summary

To date, the Company's focus has been on the development of its website portal and products.  The Company has had no income generated from operations.

Critical Accounting Policies and Estimates

Certain accounting policies are considered by management to be critical to an understanding of our condensed consolidated financial statements.  Their application requires significant management judgment, with financial reporting results relying on estimates about the effect of matters that are inherently uncertain.  A summary of critical accounting policies can be found in our Form 10-K for the year ended December 31, 2015 and in our Registration Statement on Form S-1 (No. 333-210325).  For all of these policies, management cautions that future results rarely develop exactly as forecasted, and the best estimates routinely require modification.

Results of Operations

Liquidity and Capital Resources

The Company filed a Registration Statement on Form S-1 (No. 333-210325) registering the public offering of up to 5,000,0000 additional shares of common stock at an offering price of $1.75 per share.  The proceeds from this offering are expected to provide the liquidity necessary for the foreseeable future.  As of June 30, 2016, the Company had received subscription agreements for the purchase of 1,504,050 shares of its common stock for $1,383,726.

Number of Employees

 

As of June 30, 2016, the Company had 14 full-time employees. We expect the number of employees to rise to more than 25 in 2016.

 

Disclosure of Contractual Obligations

 

The Company does not have any significant contractual obligations that could negatively impact our results of operations and financial condition.

Off-Balance Sheet Financing Arrangements

The Company had no off-balance sheet financing arrangements at June 30, 2016 and December 31, 2015.

General

 

The Company's Financial Statements are prepared in accordance with U.S. generally accepted accounting principles, which require management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, net revenue, if any, and expenses, and the disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Senior management has discussed the development, selection and disclosure of these estimates with the Board of Directors. Management believes that the accounting estimates employed and the resulting balances are reasonable; however, actual results may differ from these estimates under different assumptions or conditions. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably possible could materially impact the financial statements. Management believes the following critical accounting policies reflect the significant estimates and assumptions used in the preparation of the Financial Statements.

 

New Accounting Pronouncements

 

The Company does not expect the adoption of any recent accounting pronouncements to have a material impact on its financial statements.

 

Item 3. Qualitative and Quantitative Disclosures About Market Risk

As a Smaller Reporting Company as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our President, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act."))  and based upon this evaluation, and the engagement of a qualified outside third party to monitor our disclosure controls and procedures, concluded that as of June 30, 2016, our disclosure controls and procedures were not effective in ensuring that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms and (ii) accumulated and communicated to our management, including our principal executive and financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

None.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company had no legal proceedings as of June 30, 2016.

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

None.

ITEM 3. Defaults Upon Senior Securities

None.

ITEM 4. Mine Safety Disclosures

Not applicable.

ITEM 5. Other Information

None.

Item 6.  Exhibits

Exhibits.  The following exhibits are included as part of this report:

 

EXHIBIT NO	DESCRIPTION AND METHOD OF FILING
31.1	Certification of Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a))
31.2	Certification of Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a))
32.1	Certification of Principal Executive Officer  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Principal Financial Officer  pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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.