Nexus Enterprise Solutions (NXES) 10-Q 18 Aug 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 18, 2017
Document And Entity Information
Entity Registrant Name	Nexus Enterprise Solutions, Inc.
Entity Central Index Key	1,561,781
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		19,242,144
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,017

Balance Sheets (Unaudited)

Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
CURRENT ASSETS
Cash	$ 26,416	$ 6,176
Prepaid expenses	1,973	1,973
Accounts receivable, net of allowance for doubtful accounts	43,676	78,424
Total Current Assets	72,065	86,573
TOTAL ASSETS	72,065	86,573
CURRENT LIABILITIES
Accounts payable	243,458	255,697
Accrued expenses	430,068	248,790
Derivative liabilities	210,665	54,187
Convertible debt, net of unamortized discounts	112,300	102,500
Notes payable to related parties	133,385	133,985
Total Current Liabilities	1,129,876	795,159
TOTAL LIABILITIES	1,129,876	795,159
STOCKHOLDERS' DEFICIT
Preferred stock, 10,000,000 shares authorized at no par value, no shares issued and outstanding.
Common stock, 500,000,000 shares authorized; $.001 par value; 19,342,144 and 19,242,144 shares issued and and outstanding at June 30, 2017 and December 31, 2016, respectively	19,342	19,242
Additional paid-in capital	1,579,269	1,576,369
Accumulated deficit	(2,656,422)	(2,304,197)
Total Stockholders' Deficit	(1,057,811)	(708,586)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 72,065	$ 86,573

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0	$ 0
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ .001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	19,342,144	19,242,144
Common stock, shares outstanding	19,342,144	19,242,144

Statements of Operations

Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income Statement [Abstract]
REVENUES	$ 208,716	$ 330,013	$ 447,835	$ 697,850
COST OF SALES	86,839	268,777	205,776	395,907
GROSS PROFIT	121,877	61,236	242,059	301,943
OPERATING EXPENSES
General and administrative	23,510	72,244	43,092	101,000
Consulting and professional fees	75,740	108,244	203,636	232,014
Total Operating Expenses	99,250	180,488	246,728	333,014
INCOME (LOSS) FROM OPERATIONS	22,627	(119,252)	(4,669)	(31,071)
OTHER EXPENSES
Interest expense	(4,162)	(4,269)	(18,078)	(7,670)
Loan default penalties on convertible note	(64,000)		(173,000)
Loss on derivative liabilities	(97,100)		(156,478)
NET LOSS	$ (142,635)	$ (123,521)	$ (352,225)	$ (38,741)
NET LOSS PER COMMON SHARE - BASIC AND DILUTED	$ (0.01)	$ (0.01)	$ (0.02)	$ 0
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED	19,259,726	19,025,221	19,250,984	19,016,182

Statements of Cash Flows (Unaud

Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
OPERATING ACTIVITIES
Net loss	$ (352,225)	$ (38,741)
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on derivatives	156,478
Amortization of debt discount	$ 9,800
Stock-based compensation	3,000	34,334
Changes in operating assets and liabilities:
Accounts receivable	$ 34,748	$ 10,590
Interest payable	8,278	7,670
Accounts payable	(12,239)	5,986
Accrued expenses	173,000
Net Cash Provided by Operating Activities	20,840	19,839
FINANCING ACTIVITIES
Borrowing from related party note payable		46,000
Repayment of related party notes payable	(600)	(83,000)
Net Cash Used in Financing Activities	(600)	(37,000)
NET INCREASE/ (DECREASE) IN CASH	20,240	(17,161)
CASH AT BEGINNING OF PERIOD	6,176	18,842
CASH AT END OF PERIOD	26,416	1,681
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION CASH PAID FOR:
Interest
Income Taxes

1 ORGANIZATION AND SUMMARY OF S

1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2017
Accounting Policies [Abstract]
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited interim financial statements of Nexus Enterprise Solutions, Inc. (the "Company") have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information in accordance with Securities and Exchange Commission (SEC) Regulation S-X rule 8-03. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the unaudited interim financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position and the results of operations and cash flows for the interim periods presented herein. The financial data and other information disclosed in these notes to the interim financial statements related to the period are unaudited. The results for the three month period ended June 30, 2017, are not necessarily indicative of the results to be expected for any subsequent quarters or for the entire year ending December 31, 2017. These financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2016. Reclassifications Certain prior period amounts have been reclassified to conform to current period presentation.

2 GOING CONCERN

2 GOING CONCERN	6 Months Ended
	Jun. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
GOING CONCERN	NOTE 2 - GOING CONCERN The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States, which contemplate continuation of the Company as a going concern. The Company has a working capital deficit of ($1,057,811) and an accumulated deficit of ($2,656,422) as of June 30, 2017. These conditions raise substantial doubt about the Company's ability to continue as a going concern. In the second quarter of 2017, after a year of negotiations, the Company was able to secure new technology to sell to its clients. This technology allows better segmentation of data. It allowed the Company to sign up a significant leads buyer in June, which resulted in improved monthly financial performance for the month. Other new customers are expected to contract with the Company to use the technology, which the Company believes will allow it to return to consistent levels of profitability. However, these efforts to establish a stabilized source of revenues are insufficient to cover operating costs over an extended period of time, or do not materialize. Management anticipates that until such time as new technology and customers become established, the Company will be dependent on additional investment capital, primarily from its shareholders, to fund operating expenses. The Company intends to position itself so that it may be able to raise additional funds through the private placement of its common stock. In light of management's efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

3 RELATED PARTY TRANSACTIONS

3 RELATED PARTY TRANSACTIONS	6 Months Ended
	Jun. 30, 2017
Payables and Accruals [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 3 – RELATED PARTY TRANSACTIONS As of June 30, 2017 and December 31, 2016, the outstanding balance of accrued payroll to officers was $118,000 and $118,000, respectively. The Company pays monthly consulting fees to two stockholders. During the six months ended June 30, 2017 and 2016, these fees aggregated $76,300 and $53,500, respectively. During the six months ended June 30, 2017 and 2016, $41,200 and $24,000 was paid to Scott Schluer, Chief Technology Officer, for consulting services. In June 2017, the Company also awarded a bonus of 100,000 shares to Mr. Schluer for services performed. The common shares were valued at $3,000.

4 NOTES PAYABLE TO RELATED PART

4 NOTES PAYABLE TO RELATED PARTIES	6 Months Ended
	Jun. 30, 2017
Related Party Transactions [Abstract]
PAYABLES TO RELATED PARTIES	NOTE 4 – NOTES PAYABLE TO RELATED PARTIES As of June 30, 2017, and December 31, 2016, the Company had outstanding notes payable to related parties of $133,385. These notes are unsecured, bear interest between 0% and 15%, and are due on demand. A payment of $600 was made towards the notes during the six months ended June 30, 2017.

5 NOTES PAYABLE

5 NOTES PAYABLE	6 Months Ended
	Jun. 30, 2017
Debt Disclosure [Abstract]
NOTE PAYABLE	NOTE 5 – NOTES PAYABLE In April 2013, the Company and a third party reached an agreement for Nexus to use certain intellectual property in its lead generation business into perpetuity in exchange for a $150,000 note and 500,000 common shares which were previously issued during February 2012 (the fair value of these shares of $125,000 was reclassified from deposits to intangible assets during the year ended December 31, 2013). The note will be repaid in 18 monthly installments, with the monthly payments varying based on the Company's gross profit for that month. The monthly payments range from $5,000 to $25,000. The note does not bear interest unless a monthly payment is not made, at which time the note will bear interest at 12.5% until the non-payment is cured. During 2016, and 2015, the Company made payments of $0 and $30,500, respectively. The outstanding balance under this note payable was $0 as of June 30, 2017, and December 31, 2016, respectively. The outstanding balance of interest payable related to this agreement was $5,502 as of June 30, 2017, and December 31, 2016, respectively. The note is currently in default over the amount of accrued interest of $5,502. Currently, the Company is in talks with the third party to settle the default amount owed. The third party has delivered a default notice to the issuer and voiced intentions on suing the Company over amount of $5,502. In the event the third party sues, the Company does not see it having any material effect. On June 4, 2014, the Company borrowed $387,000 from an unrelated third party entity ("Holder") in the form of a convertible note. The note bears a zero percent interest rate until December 31, 2014, at which point the note will accrue interest at a rate of 8 percent per annum commencing on January 1, 2015. The principal balance of the note with accrued interest was originally due on February 15, 2017. According to the note, monthly payments commenced in January 2015, with the first payment of $17,500 due on January 15, 2015 and every payment due on or near the 15 th of each month thereafter. On January 15, 2016, the monthly payments decreased to $15,000 per month until maturity. The Holder is prohibited from converting all or any portion of the outstanding principal and accrued interest provided timely monthly payments are received by the Holder pursuant to the terms set forth in the payment schedule. If the note becomes convertible due to timely monthly payments not being made, the note will be convertible into common stock at 55% of the lowest closing bid price of the Company's common stock during the 25 trading days preceding the date of conversion. In addition, the Company is obligated to pay a penalty of $1,000 per day for each business day that the loan is in default. Any such penalty is convertible into common stock at 55% of the lowest closing bid price of the Company's common stock during the 25 trading days preceding the date of conversion. On October 1, 2016, an amendment to the note, which added a floor for conversions for the convertible provision of $0.0001, was signed into effect by both parties. The Company defaulted on payments on the note in 2016. In 2017, the Holder agreed to waive all default penalties due up to October 31, 2016. On June 29, 2017, the parties agreed to extend the due date to October 1, 2017. The Company evaluated the convertible note along with the accrued late-payment penalties, under FASB ASC 815 and determined it qualified as a derivative liability. As of June 30, 2017, the note was in default due to payments not being made according to the payment schedule. The outstanding balance under the note was $112,300 as of both June 30, 2017 and December 31, 2016. Late-payment penalties in the amount of $173,000 have been accrued to June 30, 2017. Interest is being accrued at the default interest rate of 12%. As of June 30, 2017, and December 31, 2016, the Company had aggregate outstanding third party notes payable of $112,300 and $112,300, respectively. The unamortized debt discount at June 30, 2017 was $0 ($9,800 at December 31, 2016).

6 DERIVATIVE LIABILITIES

6 DERIVATIVE LIABILITIES	6 Months Ended
	Jun. 30, 2017
Notes to Financial Statements
DERIVATIVE LIABILITIES	NOTE 6 – DERIVATIVE LIABILITIES During the year ended December 31, 2016, one convertible note issued by the Company became convertible and qualified as a derivative liability under FASB ASC 815. The accrued penalty for late payments under the convertible note also qualifies as a derivative liability. The Company uses Level 3 inputs to estimate the fair value of its derivative liabilities. The following schedule summarizes the valuation of financial instruments at fair value in the balance sheets as of June 30, 2017: Fair Value Measurements as of June 30, 2017 Level 1 Level 2 Level 3 Assets None $ - $ - $ - Total assets - - - Liabilities Conversion option derivative liability - - 210,665 Total liabilities $ - $ - $ 210,665 As of June 30, 2017 and December 31, 2016, the aggregate fair value of the outstanding derivative liability was $210,665 and $54,187. The Company estimated the fair value of the derivative liability using the Black-Scholes option pricing model using the following key assumptions as of June 30, 2017: June 30, 2017 Volatility 173.49% Risk-free interest rate 1.03% Expected dividends -% Expected term 0.25 years The following table sets forth a reconciliation of changes in the fair value of derivative liabilities classified as Level 3 in the fair value hierarchy during the six months ended June 30, 2017: Significant Unobservable Inputs (Level 3) Six Months Ended June 30, 2017 Fair value as of December 31, 2016 $ 54,187 Additions recognized as derivative loss 127,743 Change in fair value 28,735 Fair value as of June 30, 2017 $ 210,665

7 COMMITMENTS AND CONTINGENCIES

7 COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2017
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 7 – COMMITMENTS AND CONTINGENCIES On April 13, 2017, the Company was served with a lawsuit by Affluent ADS LLC, d/b/a Leadnomics ("Affluent"), which alleges that the Company owes $33,597 as compensation for services rendered by Affluent. The Company has not accrued any amount for this claim, as it believes the claim is without merit.

1 ORGANIZATION AND SUMMARY OF13

1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (DETAILS)	6 Months Ended
	Jun. 30, 2017
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The unaudited interim financial statements of Nexus Enterprise Solutions, Inc. (the "Company") have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information in accordance with Securities and Exchange Commission (SEC) Regulation S-X rule 8-03. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the unaudited interim financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position and the results of operations and cash flows for the interim periods presented herein. The financial data and other information disclosed in these notes to the interim financial statements related to the period are unaudited. The results for the three and six month periods ended June 30, 2016, are not necessarily indicative of the results to be expected for any subsequent quarters or for the entire year ending December 31, 2016. These financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2015.
Reclassifications	Reclassifications Certain prior period amounts have been reclassified to conform to current period presentation.
Earnings (Loss) Per Share	Earnings (Loss) Per Share The computations of basic loss per share of common stock are based on the weighted average number of shares outstanding at the date of the financial statements. The Company computes net income (loss) per share in accordance with ASC 260. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. Basic and diluted net income (loss) per share is the same for each of the three and six months ended June 30, 2016, and 2015, due to the absence of common stock equivalents.

6 DERIVATIVE LIABILITIES (Table

6 DERIVATIVE LIABILITIES (Tables)	6 Months Ended
	Jun. 30, 2017
Notes to Financial Statements
Fair value	Fair Value Measurements as of June 30, 2017 Level 1 Level 2 Level 3 Assets None $ - $ - $ - Total assets - - - Liabilities Conversion option derivative liability - - 210,665 Total liabilities $ - $ - $ 210,665
Fair value of the derivative liability	June 30, 2017 Volatility 173.49% Risk-free interest rate 1.03% Expected dividends -% Expected term 0.25 years
Reconciliation of changes in the fair value of derivative liabilities classified as Level 3 in the fair value hierarchy	Significant Unobservable Inputs (Level 3) Six Months Ended June 30, 2017 Fair value as of December 31, 2016 $ 54,187 Additions recognized as derivative loss 127,743 Change in fair value 28,735 Fair value as of June 30, 2017 $ 210,665

2 GOING CONCERN (Details Narrat

2 GOING CONCERN (Details Narrative) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Working capital deficit	$ (1,057,811)
Accumulated deficit	$ (2,656,422)	$ (2,304,197)

3 RELATED PARTY TRANSACTIONS (D

3 RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2017	Dec. 31, 2016
Related Party Transactions [Abstract]
Monthly consulting fees paid to two stockholders	$ 53,500	$ 76,300
Accrued payroll to officers			$ 118,000	$ 118,000

4 NOTES PAYABLE TO RELATED PA17

4 NOTES PAYABLE TO RELATED PARTIES (Details Narrative)	6 Months Ended
	Jun. 30, 2017USD ($)
Notes to Financial Statements
Outstanding unsecured notes payable related parties	$ 133,385
Variable interest rate - minimum	6.00%
Variable interest rate - maximum	15.00%
Payment during period	$ 600

5 NOTES PAYABLE (Details Narrat

5 NOTES PAYABLE (Details Narrative) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2016	Jun. 04, 2014
Debt Disclosure [Abstract]
Note issued for intangible asset	$ 150,000
Shares issed for intangible asset	500,000
Fair value of shares issued for intangible asset	$ 125,000
Low range of monthly payments	5,000
High range of monthly payments	$ 25,000
Interest if monthly payment is not made	12.50%
Total amount of paid during the period		$ 65,500	$ 30,500
Outstanding balance of interest payable during period	$ 5,502	5,502
Oustanding balance of note payable	$ 15,500			$ 30,500
Convertible note - borrowed					$ 387,000
Interest rate	8.00%
Repayment in full due date	Jan. 15, 2017
Monthly payment amount until 1-15-2017	$ 15,000
Outstanding balance	142,500			$ 185,500
Accrued interest	$ 5,502	$ 5,502

6 DERIVATIVE LIABILITIES - Fair

6 DERIVATIVE LIABILITIES - Fair value (Details)	Jun. 30, 2017USD ($)
Fair Value, Inputs, Level 1 [Member]
Total assets
Fair Value input for Liabilities
Conversion option derivative liability
Total liabilities
Fair Value, Inputs, Level 2 [Member]
Total assets
Fair Value input for Liabilities
Conversion option derivative liability
Total liabilities
Fair Value, Inputs, Level 3 [Member]
Total assets
Fair Value input for Liabilities
Conversion option derivative liability	210,665
Total liabilities	$ 210,665

6 DERIVATIVE LIABILITIES - Fa20

6 DERIVATIVE LIABILITIES - Fair value of the derivative liability (Details)	6 Months Ended
	Jun. 30, 2017$ / shares
Notes to Financial Statements
Volatility	173.49%
Risk-free interest rate	1.03%
Expected dividends
Expected term	3 months

6 DERIVATIVE LIABILITIES - Reco

6 DERIVATIVE LIABILITIES - Reconciliation of changes in the fair value Level 3 in the fair value hierarchy (Details)	6 Months Ended
	Jun. 30, 2017USD ($)
Notes to Financial Statements
Fair value as of December 31, 2016	$ 54,187
Additions recognized as derivative loss	127,743
Change in fair value	28,735
Fair value as of June 30, 2017	$ 210,665

6 DERIVATIVE LIABILITIES (Detai

6 DERIVATIVE LIABILITIES (Details Narrative) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Notes to Financial Statements
Outstanding derivative liability	$ 210,665	$ 54,187