Washington, D.C. 20549
Commission File No. 333-184832
Indicate by check mark if registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [] No [X].
Indicate by check mark if registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.
Yes [] No [X].
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 (Section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files. Yes [X] No [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K is contained in this form and no disclosure will be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K. [X]
Indicate by check mark whether the registrant is a large accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer," and "small reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [] | 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 aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. The aggregate market value of the voting stock held by nonaffiliates computed by reference to the price at which the stock was sold as of June 30, 2014 was $1,541,966.
As of March 31, 2015, registrant had outstanding 18,757,144 shares of common stock.
FORM 10-K
NEXUS ENTERPRISE SOLUTIONS, INC.
INDEX
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PART I | |
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Item 1. Business | 3 |
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Item 1A. Risk Factors | 9 |
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Item 2. Property | 9 |
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Item 3. Legal Proceedings | 9 |
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Item 4. Mine Safety Disclosures | 9 |
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PART II | |
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Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 9 |
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Item 6. Selected Financial Data | 11 |
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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations | 12 |
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk | 15 |
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Item 8. Financial Statements and Supplementary Data | 15 |
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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures | 27 |
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Item 9A(T). Controls and Procedures | 27 |
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Item 9B. Other Information | 28 |
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PART III | |
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Item 10. Directors, Executive Officers and Corporate Governance | 28 |
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Item 11. Executive Compensation | 30 |
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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 31 |
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Item 13. Certain Relationships and Related Transactions, and Director Independence | 32 |
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Item 14. Principal Accountant Fees and Services | 33 |
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Item 15. Exhibits Financial Statement Schedules | 34 |
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Signatures | 35 |
For purposes of this report, unless otherwise indicated or the context otherwise requires, all references herein to "Nexus," "the Company" ,"we," "us," and "our," refer to Nexus Enterprise Solutions, Inc., a Wyoming corporation.
Forward-Looking Statements
The following discussion contains forward-looking statements regarding us, our business, prospects and results of operations that are subject to certain risks and uncertainties posed by many factors and events that could cause our actual business, prospects and results of operations to differ materially from those that may be anticipated by such forward-looking statements. Factors that may affect such forward-looking statements include, without limitation: our ability to successfully develop new products and services for new markets; the impact of competition on our revenues, changes in law or regulatory requirements that adversely affect or preclude clients from using us for certain applications; delays our introduction of new products or services; and our failure to keep pace with our competitors.
When used in this discussion, words such as "believes", "anticipates", "expects", "intends" and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We undertake no obligation to revise any forward-looking statements in order to reflect events or circumstances that may subsequently arise. Readers are urged to carefully review and consider the various disclosures made by us in this report and other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect our business.
PART I
Item 1. DESCRIPTION OF BUSINESS.
General Information about Our Company
Based in Lighthouse Point, Florida, Nexus is a lead generation services company dedicated to helping our customers identify, engage and develop long term relationships with their clients through a host of proprietary lead generation systems designed to identify potential clients for our customers, Nexus Enterprise Solutions, Inc. provides a broad range of internet marketing strategies to capture targeted buyer data and use that data to generate revenues through the sale of leads to our customers. Nexus Enterprise Solutions, Inc. is quickly expanding into a number of different industries and currently serves as a lead generation engine for several of the nation's largest companies in the insurance and financial service sectors.
History
Nexus Enterprise Solutions, Inc. ("Nexus") was incorporated in the State of Wyoming on October 19, 1995 as Global Link Technologies, Inc. On June 10, 2008, Global Link Technologies filed Articles of Amendment with the State of Wyoming changing its name to MutuaLoan Corporation. On June 16, 2011 (as filed with the State of Wyoming on September 16, 2011), MutuaLoan Corporation entered into a business combination with Nexus Enterprise Solutions, Inc. ("Nexus Florida"). The business combination was accounted for as a reverse merger recapitalization. The accounting target/legal acquirer was MutuaLoan. The accounting acquirer/legal target was Nexus Florida. Nexus is currently conducting operations and generating revenue.
Principal services and their markets
Our Company's primary service is lead generation for its customers. The Company's target customers are currently companies in the insurance and financial service industries, but we intend to expand to additional industries in the future. Below, our lead generation service and process are detailed in an effort to explain the methods by which our company generates revenue.
LEAD GENERATION DEFINITION: A lead, in a marketing context, is a potential sales contact: an individual or organization that expresses an interest in your goods or services. Leads are typically obtained through the referral of an existing customer, or through a direct response to advertising/publicity. A company's marketing department is typically responsible for lead generation. Pursuing and closing leads normally falls to the company's sales department. For example, a vendor will display their wares at an industry trade show, hoping to attract the attention of qualified buyers attending the exhibit. Each inquiry for more vendor information would be a "lead," which might subsequently be developed into a sale. A company's lead generation efforts and its approach to dealing with leads can significantly impact its success in the marketplace. We use two separate methods of acquiring leads, which are online generation and offline generation.
Online generation
There are many ways to generate leads online. Each has its own formula that needs to be perfected in order to find the balance between quantity and quality. The online lead generation methods used by our Company are as follows, with each including a description of how the process involved with each type of lead generation method is utilized.
1. Proprietary Lead Portals : provides several ways for advertisers to put targeted offers in front of a buying consumer audience via a proprietary network of websites all specifically built for a broad or specific industry. For this service, our customers pay per generated lead on a cost per lead (the delivery of just the name and contact details) or cost per acquisition basis (an actual credit card paid transaction.)
2. Search engine optimization (SEO): is the process of improving the volume or quality of traffic to a website from search engines via "natural" or un-paid ("organic" or "algorithmic") search results as opposed to search engine marketing (SEM) which deals with paid inclusion. Typically, the earlier (or higher) a site appears in the search results list, the more visitors it will receive from the search engine. SEO may target different kinds of search, including image search, local search, video search, and industry-specific vertical search engines. This gives a web site web presence. As an Internet marketing strategy, SEO considers how search engines work and what people search for. Optimizing a website primarily involves editing its content and HTML and associated coding to both increase its relevance to specific keywords and to remove barriers to the indexing activities of search engines.
The acronym "SEO" can refer to "search engine optimizers," a term adopted by an industry of consultants who carry out optimization projects on behalf of clients, and by employees who perform SEO services in-house. Search engine optimizers may offer SEO as a stand-alone service or as a part of a broader marketing campaign. Because effective SEO may require changes to the HTML source code of a site, SEO tactics may be incorporated into web site development and design. The term "search engine friendly" may be used to describe web site designs, menus, content management systems, images, videos, shopping carts, and other elements that have been optimized for the purpose of search engine exposure. Another class of techniques, known as black hat SEO or spamdexing, use methods such as link farms, keyword stuffing and article spinning that degrade both the relevance of search results and the user experience of search engines. Search engines look for sites that employ these techniques in order to remove them from their indices.
3. Pay Per Click: is an Internet advertising model used on websites, in which advertisers pay a host only when their ad is clicked. With search engines, advertisers typically bid on keyword phrases relevant to their target market. Content sites commonly charge a fixed price per click rather than use a bidding system.
Cost per click (CPC) is the amount of money an advertiser pays search engines and other Internet publishers for a single click on its advertisement that brings one visitor to its website. In contrast to the generalized portal, this seeks to drive a high volume of traffic to one site. It does this by offering financial incentives (in the form of a percentage of revenue) to affiliated partner sites.
4. Email Advertising: is a form of direct marketing which uses electronic mail as a means of communicating commercial or fundraising messages to an audience. In its broadest sense, every e-mail sent to one of our customer's potential or current client could be considered e-mail marketing. However, the term is usually used to refer to:
• sending e-mails with the purpose of enhancing the relationship of a merchant with its current or previous customers and to encourage customer loyalty and repeat business,
• sending e-mails with the purpose of acquiring new customers or convincing current customers to
purchase something immediately,
• adding advertisements to e-mails sent by other companies to their customers, and
5. Online Internet Publishers: are companies specializing in lead generation and buy email, search, and banner traffic to drive potential leads to proprietary portals that they own. Using ads promoting information about products and services, potential leads arrive at these portals at which time they are required to fill out their full contact information. The prospects then choose freely what advertisements they are interested in by opting into or filling out a custom form of each offer they want more information about. Since each lead opts in, the Internet publishers capture the IP ("Internet Protocol") address of the computer each lead comes from, as well as the date and time of capture.
6. Website Banner Advertisements: A web banner or banner ad is a form of advertising on the World Wide Web. This form of online advertising entails embedding an advertisement into a web page. It is intended to attract traffic to a website by linking to the website of the advertiser. The advertisement is constructed from an image,, JavaScript program or multimedia object employing technologies such as Java, Shockwave or Flash, often employing animation, sound, or video to maximize presence.
The web banner is displayed when a web page that references the banner is loaded into a web browser.
This event is known as an "impression". When the viewer clicks on the banner, the viewer is directed to the website advertised in the banner. This event is known as a "click through". In many cases, banners are delivered by a central ad server. When the advertiser scans their log files and detects that a web user has visited the advertiser's site from the content site by clicking on the banner ad, the advertiser sends the content provider some small amount of money. This payback system is often how the content provider is able to pay for the Internet access to supply the content in the first place. Usually though, advertisers use ad networks to serve their advertisements, resulting in a revenue sharing system and higher quality ad placement. Web banners function the same way as traditional advertisements are intended to function: notifying consumers of the product or service and presenting reasons why the consumer should choose the product in question, although web banners differ in that the results for advertisement campaigns may be monitored real-time and may be targeted to the viewer's interests.
7. Blogs: A weblog, web log or simply a blog, is a web application which contains periodic time-stamped posts on a common webpage. These posts are often but not necessarily in reverse chronological order. Such a website would typically be accessible to any Internet user. "Weblog" is a portmanteau of "web" and "log". The term "blog" came into common use as a way of avoiding confusion with the term server log.
8. Social Networking: is a term that describes use of social networks, online communities, blogs, wikis or any other online collaborative media for marketing, sales, public relations and customer service.
Common social media marketing tools include Twitter, LinkedIn, Facebook, Flickr, Wikipedia, Orkut and YouTube.
In the context of internet marketing, social media refers to a collective group of web properties whose content is primarily published by users, not direct employees of the property (e.g., the vast majority of video on YouTube is published by non-YouTube employees).
9. Affiliate Network: is an Internet-based marketing practice in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate's marketing efforts. It is an application of crowdsourcing. Examples include rewards sites, where users are rewarded with cash or gifts, for the completion of an offer, and the referral of others to the site.
The affiliate marketing industry has four core players: the merchant (also known as 'retailer' or 'brand'), the network, the publisher (also known as 'the affiliate') and the customer. The market has grown in complexity to warrant a secondary tier of players, including affiliate management agencies, superaffiliates and specialized third parties vendors.
Affiliate marketing overlaps with other Internet marketing methods to some degree, because affiliates often use regular advertising methods. Those methods include organic search engine optimization, paid search engine marketing, e-mail marketing, and in some sense display advertising. On the other hand, affiliates sometimes use less orthodox techniques, such as publishing reviews of products or services offered by a partner.
10. Affiliate Programs: using one website to drive traffic to another—is a form of online marketing, which is frequently overlooked by advertisers. While search engines, e-mail, and website syndication capture much of the attention of online retailers, affiliate marketing carries a much lower profile. Still, affiliates continue to play a significant role in e-retailers' marketing strategies.
Offline Lead Generation
Live Phone Lead Transfer Division
Using a combination of a predictive dialer call center solution and an overseas outsourced call center solution, our Company is able to generate custom live transfer leads for our customers. We utilize this method of lead generation in situations where we are confident that a high volume of live leads can be generated and sold for a profit. It is possible to charge high prices for leads generated by using this method, and it also allows our customers to meet profitability goals and acquisition costs goals. Competitive pricing will be determined from the ability to generate a certain volume of leads/day for each of our customers. The necessity to increase or decrease our use of this method of lead generation for our customers will be determined each day based on the amount of leads generated.
Revenue Model and Distribution methods of the products or services
Our revenue model is based on customer development. We either purchase leads from accredited brokers or locate leads based on the methods described above, and then resell those leads to our customers through our automated system. The leads must meet the stringent criteria of our system. The leads are vetted through our fraud filters in order to ensure quality.
We are currently focusing our attention on the auto insurance market, but expect to expand to other industries in the very near future.
The Company will identify and address additional target markets for its services other than the insurance and financial industries with market research and feedback from its customers.
Organization
We are comprised of one corporation. All of our operations are conducted through this corporation.
Clients and Competition
Competition
We see very little competition for our business model, and do not anticipate such competition to become significant in the future. While it is possible that our business model may be duplicated in the future, at the current time we believe our system and business method of providing both online and offline lead generation services as one automated system is unique and therefore results in little competition from our competitors, including our competitors in the lead generation business.
Platform
Lead generation services do exist. However, our automated solution is a mass market product that enables potential buyers and sellers to quickly purchase and sell various leads. We are in the process of creating and operating a platform which will create a new method for facilitating such transactions.
Strategy
Structured as a technology services company, our business model is designed to provide an automated solution to the lead generating process. We anticipate in the near future having a solid footprint with minimal competition.
Backlog
At December 31, 2014, we had no backlog.
Employees
As of December 31, 2014, we three full time employees and three part time employees.
Proprietary Information
We own no proprietary information.
Government Regulation
We do not expect to be subject to material governmental regulation. However, it is our policy to fully comply with all governmental regulation and regulatory authorities.
Research and Development
We spent $0 on research and development of our products during the year ended December 31, 2014, which is compared to $81,313 spent on research and development during the year ended December 31, 2013. We expect our research and development costs to remain stable now that we have finalized the development of our lead generation model.
Environmental Compliance
We believe that we are not subject to any material costs for compliance with any environmental laws.
How to Obtain our SEC Filings
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to these reports, are available on our website at www.nexusenterprisesolutions.com, as soon as reasonably practicable after we file these reports electronically with, or furnish them to, the Securities and Exchange Commission ("SEC"). Except as otherwise stated in these reports, the information contained on our website or available by hyperlink from our website is not incorporated into this Annual Report on Form 10-K or other documents we file with, or furnish to, the SEC.
Our investor relations department can be contacted at our principal executive office located at our principal office, 5340 N. Federal Highway, Suite 206, Lighthouse Point, FL 33064. Our telephone number is (561)-767-4346.
Item 1A. RISK FACTORS
Not required for a Smaller Reporting Company.
ITEM 1B. Unresolved Staff Comments.
None.
ITEM 2. DESCRIPTION OF PROPERTY.
The Company operations are currently being conducted out of the Company office located at 5340 N Federal Hwy STE 206 Lighthouse Point, FL 33406 1375; (561) 767-4346. It considers that the current principal office space arrangement adequate and will reassess its needs based upon the future growth of the Company.
ITEM 3. LEGAL PROCEEDINGS.
We are not a party to any material legal proceedings, nor is our property the subject of any material legal proceeding.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information
Since July 30, 2013, our common stock has been quoted on the OTCQB marketplace, under the trading symbol NXES. Prior to June 30, 2013, our common stock was quoted on OTC Markets Pinksheets. However, there was no public trading of our common stock. The following table sets forth, for the calendar periods indicated, the range of the high and low closing prices reported for our common stock. The quotations represent inter-dealer prices without retail mark-ups, mark-downs, or commissions, and may not necessarily represent actual transactions. The quotations may be rounded for presentation.
Fiscal year ended December 31, 2014
| | | High | | | | Low | |
First Quarter | | $ | 0.203 | | | $ | 0.123 | |
Second Quarter | | $ | 0.27 | | | $ | 0.164 | |
Third Quarter | | $ | 0.20 | | | $ | 0.08 | |
Fourth Quarter | | $ | 0.129 | | | $ | 0.08 | |
Holders
As of March 31, 2015, there were 207 record holders of our common stock, and there were 18,807,144 shares of our common stock outstanding.
The Securities Enforcement and Penny Stock Reform Act of 1990
The Securities and Exchange Commission has also adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).
A purchaser is purchasing penny stock which limits the ability to sell the stock. The shares offered by this prospectus constitute penny stock under the Securities and Exchange Act. The shares will remain penny stocks for the foreseeable future. The classification of penny stock makes it more difficult for a broker-dealer to sell the stock into a secondary market, which makes it more difficult for a purchaser to liquidate his/her investment. Any broker-dealer engaged by the purchaser for the purpose of selling his or her shares in us will be subject to Rules 15g-1 through 15g-10 of the Securities and Exchange Act. Rather than creating a need to comply with those rules, some broker-dealers will refuse to attempt to sell penny stock.
The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document prepared by the Commission, which:
| ● | contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; |
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| ● | contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of the Securities Act of 1934, as amended; |
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| ● | contains a brief, clear, narrative description of a dealer market, including "bid" and "ask" prices for penny stocks and the significance of the spread between the bid and ask price; |
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| ● | contains a toll-free telephone number for inquiries on disciplinary actions; |
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| ● | defines significant terms in the disclosure document or in the conduct of trading penny stocks; and |
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| ● | contains such other information and is in such form (including language, type, size and format) as the Securities and Exchange Commission shall require by rule or regulation; |
The broker-dealer also must provide, prior to effecting any transaction in a penny stock, to the customer:
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| ● | the bid and offer quotations for the penny stock; |
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| ● | the compensation of the broker-dealer and its salesperson in the transaction; |
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| ● | the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and |
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| ● | monthly account statements showing the market value of each penny stock held in the customer's account. |
In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements will have the effect of reducing the trading activity in the secondary market for our stock because it will be subject to these penny stock rules. Therefore, stockholders may have difficulty selling their securities.
Dividend Policy
We have not previously declared or paid any dividends on our common stock and do not anticipate declaring any dividends in the foreseeable future. The payment of dividends on our common stock is within the discretion of our board of directors. We intend to retain any earnings for use in our operations and the expansion of our business. Payment of dividends in the future will depend on our future earnings, future capital needs and our operating and financial condition, among other factors that our board of directors may deem relevant. We are not under any contractual restriction as to our present or future ability to pay dividends.
Recent Sales of Unregistered Securities
None.
ITEM 6. SELECTED FINANCIAL DATA
A smaller reporting company is not required to provide the information in this Item.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management's Discussion and Analysis or Plan of Operation contains forward-looking statements that involve future events, our future performance and our expected future operations and actions. In some cases, you can identify forward-looking statements by the use of words such as "may", "will", "should", "anticipate", "believe", "expect", "plan", "future", "intend", "could", "estimate", "predict", "hope", "potential", "continue", or the negative of these terms or other similar expressions. These forward-looking statements are only our predictions and involve numerous assumptions, risks and uncertainties. Our actual results or actions may differ materially from these forward-looking statements for many reasons, including, but not limited to, the matters discussed in this report under the caption "Risk Factors". We urge you not to place undue reliance on these forward-looking statements, which speak only as of the date of this prospectus. We undertake no obligation to publicly update any forward looking-statements, whether as a result of new information, future events or otherwise.
The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included in this report.
The following table provides selected financial data about us for the fiscal years ended December 31, 2014 and 2013. For detailed financial information, see the audited Financial Statements included in this report.
| Years Ended December 31, | |
Balance Sheet Data: | 2014 | | | 2013 | |
Cash | | | $ | 31,575 | | | $ | 23,013 | |
Total assets | | | | 602,782 | | | | 540,822 | |
Total liabilities | | | | 1,059,277 | | | | 625,131 | |
Shareholders' deficit | | | | (456,495 | ) | | | (84,309 | ) |
| | | | | | | | | |
Operating Data: | | | | | | | | | |
Revenues | | | | 1,602,662 | | | | 2,635,716 | |
Operating expenses | | | | 604,199 | | | | 989,022 | |
Net loss | | | $ | (62,207 | ) | | $ | (189,259 | ) |
Results of Operations
For the year ended December 31, 2014 and December 31, 2013
The Company generated $1,602,662 in revenue for the year ended December 31, 2014, which compares to revenue of $2,635,716 for the year ended December 31, 2013. Our revenues decreased during the year ended December 31, 2014 due to the fact that one of our largest lead purchasers experienced budget reductions during the first quarter of 2014.
Cost of sales for the year ended December 31, 2014 was $1,059,548, which compares to cost of sales of $1,833,710 for the year ended December 31, 2013. Our revenues decreased during the year ended December 31, 2014 due to the fact that one of our largest lead purchasers experienced budget reductions during the first quarter of 2014. As our sales revenue decreased to that lead purchaser, our cost of sales correspondingly decreased.
Operating expenses, which consisted solely of general and administrative expenses, research and development fees and consulting fees for the year ended December 31, 2014, were $604,199. This compares with operating expenses for the year ended December 31, 2013 of $989,022. The major components of general and administrative expenses include accounting fees, legal and professional fees. Our operating expenses decreased during the year ended December 31, 2014 because we had a decrease in our consulting fees and no research and development costs.
As a result of the foregoing, we had a net loss of $62,207 for the year ended December 31, 2014. This compares with a net loss for the year ended December 31, 2013 of $189,259.
In its audited financial statements as of December 31, 2014, the Company was issued an opinion by its auditors that raised substantial doubt about the ability to continue as a going concern based on the Company's current financial position. Our ability to achieve and maintain profitability and positive cash flow is dependent upon our ability to successfully develop and market our products and our ability to generate revenues.
Liquidity and Capital Resources
As of December 31, 2014 we had cash of $31,575. As of December 31, 2013, we had cash of $23,013.
We believe that with our existing cash flows we have sufficient cash to meet our operating requirements for the next twelve months due to the fact that our revenues are increasing while our operating expenses are decreasing. We believe that the amount of revenue we are generating coupled with our lower operating expenses for the year ended December 31, 2014 compared to the year ended December 31, 2013 will allow us to meet our operating requirements during the next twelve months. If our revenue is not sufficient to allow us to meet our cash requirements during the next twelve months, the company may need to raise additional funds through the sale of its equity securities. We cannot guarantee that we will be successful in generating sufficient revenues or other funds in the future to cover these operating costs. Failure to generate sufficient revenues or additional financing when needed could cause us to go out of business.
Net cash provided by operating activities was $43,936 for the year ended December 31, 2014. This compares to net cash provided by operating activities of $14,799 for the year ended December 31, 2013. This increase is due to a decrease in stock based compensation and bad debt expense, as well as the fact that the Company has completed most of its research and development activities on its products and services.
Cash flows used in investing activities were $0 for the year end December 31, 2014 and December 31, 2013. We do not anticipate significant cash outlays for investing activities over the next twelve months.
Cash flows used in financing activities was $35,374 for the year ended December 31, 2014 which compares to cash flows used in financing activities of $54,000 for the year ended December 31, 2013. The change in cash flows related to financing activities is due to an increase in borrowings on debt as well as a repurchase and cancellation of our common stock. On June 4, 2014, the Company repurchased and cancelled an aggregate of 1,459,504 shares of common stock for a total purchase price of $356,874.
As of December 31, 2014, our total assets were $602,782 and our total liabilities were $1,059,277. As of December 31, 2013, our total assets were $540,822 and our total liabilities were $625,131.
Our principal source of liquidity will be our operations. We expect variation in revenues to account for the difference between a profit and a loss. Our ability to achieve and maintain profitability and positive cash flow is dependent upon our ability to successfully develop and retain our customers and our ability to generate revenues.
Our primary activity will be to seek to develop clients for our services and, consequently, our sales. If we succeed in developing clients for our services and generating sufficient sales, we will become profitable. We cannot guarantee that this will ever occur. Our plan is to build our company in any manner which will be successful.
Stock Repurchase
On June 4, 2014, the Company repurchased and cancelled an aggregate of 1,459,504 shares of its common stock for a total purchase price of $356,874.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Plan of Operation
The following milestones are estimates only. The working capital requirements and the projected milestones are approximations only and subject to adjustment based on sales, costs and needs.
Our plan for the twelve months beginning January 1, 2015 is to operate at a profit or at break even. Our plan is to attract sufficient additional product sales and services within our present organizational structure and resources to become profitable in our operations.
Our revenue model is based on customer development. We either purchase leads from accredited brokers or locate leads based on the methods described above, and then resell those leads to our customers through our automated system. The leads must meet the stringent criteria of our system. The leads are vetted through our fraud filters in order to ensure quality.
We are currently focusing our attention on the auto insurance market, but expect to expand to other industries in the very near future.
Nexus Enterprise Solutions, Inc. (Nexus) is redefining the current prospect and lead generation and acquisition industry by developing an information exchange service which allows sellers and buyers of leads, and other information assets, to operate in an optimized, transparent, and efficient way to transact deals in a more efficient manner than what is experienced in today's markets and systems. This is accomplished primarily through systems and processes which enable enhanced business intelligence and management thereby empowering stakeholders on both sides of the transaction to make well-informed and meaningful connections with each other.
Our Company generates revenue through its lead generation services, which are comprised of the lead generation methods described above and are accessed by our customers through our automated system. The cost of developing an automated system such as ours is prohibitive for a majority of companies. We fulfill a need by allowing these companies to use our technology, forms, landing pages etc, for a fee. We currently are back logged with the amount of companies looking to buy and sell leads to us, our carriers and agencies. In return, we get compensated when we sell a lead by charging our customers a fee for each lead purchased.
The Company will identify and address additional target markets for its services other than the insurance and financial industries with market research and feedback from its customers.
Recently Issued Accounting Pronouncements.
We do not expect the adoption of any recently issued accounting pronouncements to have a significant impact on our net results of operations, financial position, or cash flows.
Seasonality.
We do not expect our revenues to be impacted by seasonal demands for our services.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
A smaller reporting company is not required to provide the information in this Item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.