Axiom 10-Q 2015 Q1 Quarterly report

 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended

March 31, 2015

or

[  ]

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

to

Commission File Number

333-186078

AXIOM CORP.

(Exact name of registrant as specified in its charter)

Colorado

N/A

(State or other jurisdiction of incorporation or organization)

(IRS Employer Identification No.)

380 Vansickle Road, Unit 600, St. Catharine’s, ON Canada L2S 0B5

N/A

(Address of principal executive offices)

(Zip Code)

(905) 646-8787

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

[X]

YES

[  ]

NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

[X]

YES

[  ]

NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small 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

[  ]

(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

[X]

NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.

[  ]

YES

[  ]

NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

66,147,975 common shares issued and outstanding as of May 12, 2015.

AXIOM CORP.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION	3
Item 1.Financial Statements	3
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3.Quantitative and Qualitative Disclosures About Market Risk	10
Item 4.Controls and Procedures	10
PART II - OTHER INFORMATION	10
Item 1.Legal Proceedings	10
Item 1A.Risk Factors	10
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds	11
Item 3.Defaults Upon Senior Securities	11
Item 4.Mine Safety Disclosures	11
Item 5.Other Information	11
Item 6.Exhibits	12
SIGNATURES	13

2

PART I - FINANCIAL INFORMATION

Item 1.           Financial Statements

The consolidated financial statements of our company have been prepared in accordance with generally accepted accounting principles in the United States and are expressed in US dollars.

AXIOM CORP.

TABLE OF CONTENTS

MARCH 31, 2015 AND 2014

Unaudited Interim Condensed Consolidated Balance Sheets as of March 31, 2015 and December 31, 2014                                                                                                                                                         Page F-1

Unaudited Interim Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2015 and 2014                                                                          Page F-2

Unaudited Interim Condensed Consolidated Statements of Stockholders’ Deficit for the three months from

January 1 to March 31, 2014 and 2015                                                                                                                                                                                                                                                                                Page F-3

Unaudited Interim Condensed Consolidated Statements of Cash Flows for the three months ended

March 31, 2015 and 2014                                                                                                                                                                                                                                                                                                       Page F-4

Notes to the Unaudited Interim Condensed Consolidated Financial Statements                                                                                                                                                                                                        Pages F-5 to F-15

3

Axiom Corp. and Subsidiary

Unaudited Interim Condensed ConsolidatedBalance Sheets

 (Expressed in United States dollars)

Notes		March 31, 2015		December 31, 2014
Assets
Current assets
Cash	$	137,418	$	8,602
Funds held in trust		70,747		-
Accounts receivable (net of allowance of $nil (2014 - $nil))		3,056		2,389
Inventory                                                                                      5		7,427		13,410
Prepaid expenses and other receivables		16,849		21,868
Total current assets		235,497		46,269
Non-current assets
Equipment                                                                                     6		16,041		14,284
Intangible assets                                                                             7		68,230		70,074
Total non-current assets		84,271		84,358
Total assets	$	319,768	$	130,627
Liabilities
Current liabilities
Accounts payable and accrued liabilities                                         8, 9	$	156,744	$	125,898
Other taxes payable		6,586		7,191
Current portion of deferred revenue                                              11		8,685		9,482
Due to related parties                                                                    9		160,643		106,406
Loan payable                                                                                10		148,035		-
Total current liabilities		480,693		248,977
Non-current liabilities
Deferred revenue                                                                           11		18,093		22,125
Total non-current liabilities		18,093		22,125
Total liabilities		498,786		271,102
Stockholders' Deficit
Capital stock (66,147,975 common shares-par value $0.00001 per share, 2,666,668 series A preferred shares-par value $0.00001 per share and 1,000,002 series B preferred shares-par value $0.00001 issued and outstanding)   12		698		798,586
Shares to be issued		270,000		-
Additional paid-in capital		854,910		-
Accumulated other comprehensive income		36,633		17,807
Deficit		(1,341,259)		(956,868)
Total stockholders’ deficit		(179,018)		(140,475)
Total liabilities and deficit	$	319,768	$	130,627

Going Concern                                                                             1

Contingency                                                                                13

Subsequent Events                                                                        14

Approved by the Board

“Scott MacRae”                                                                              “Jerry Moes”

_____________________________                                           ___________________________

Director                                                                                        Director

The accompanying notes are an integral part of these interim condensed consolidated financial statements
F-1

Axiom Corp. and Subsidiary

Unaudited Interim Condensed ConsolidatedStatements of Operations and Comprehensive Loss

(Expressed inUnited States dollars)

		For the three		For the three
		Months ended		Months ended
Notes		March 31, 2015		March 31, 2014
Revenue	$	11,301	$	14,195
Cost of revenue		7,297		4,900
Gross profit		4,004		9,295
Expenses
Advertising and promotion		1,333		-
Interest                                                                  9		3,591		2,464
Office and general		8,127		5,549
Rent		3,273		3,681
Salaries and fees		156,263		1,214
Travel		5,160		2,195
Depreciation and amortization                            6, 7		5,087		564
Research and development		683		1,812
Stock-based compensation                                12		148,125		-
Professional fees		55,353		11,508
Total operating expenses		386,995		28,988
		(382,991)		(19,693)
Loss on foreign exchange		(1,400)		(2,850)
Net loss and comprehensive loss for the period	$	(384,391)	$	(22,543)
Net loss per share - Basic and diluted	$	(0.01)	$	(0.00)
Weighted average number of shares outstanding - Basic and diluted		69,328,702		56,433,333

The accompanying notes are an integral part of these interim condensed consolidated financial statements
F-2

Axiom Corp. and Subsidiary

Condensed ConsolidatedStatements of Stockholders’ Deficit

 (Expressed in United States dollars)

	Capital Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income	Shares to be Issued	Deficit	Total
	$	$	$	$	$	$
Balance January 1, 2015	798,586	-	17,807	-	(956,868)	(140,475)
Issuance of warrants	-	148,125	-	-	-	148,125
Reverse acquisition by Papernuts Canada	(797,888)	706,785	18,826	-	-	(72,277)
Proceeds of share subscriptions collected	-	-	-	270,000	-	270,000
Net (loss) for the period	-	-	-	-	(384,391)	(384,391)
Balance March 31, 2015	698	854,910	36,633	270,000	(1,341,259)	(179,018)

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-3

Axiom Corp. and Subsidiary

Unaudited Interim Condensed ConsolidatedStatements of CashFlows  

 (Expressed in United States dollars)

		For the three		For the three
		Months ended		Months ended
		March 31, 2015		March 31, 2014
Operating activities
Net loss for the period	$	(384,391)	$	(22,543)
Depreciation and amortization		5,087		564
Stock-based compensation		148,125		-
Accrued interest on shareholder loans		2,498		1,574
Changes in accounts receivable		(667)		(230)
Change in inventory		5,983		4,397
Changes in prepaid expenses		5,020		(338)
Changes in accounts payable and accrued liabilities and other taxes payable		26,623		24,433
Changes in deferred revenue		(4,829)		(4,186)
Net cash flows (used in) generated by operating activities		(196,551)		3,671
Investing activities
Purchase of equipment		(5,000)		-
Net cash flows used in investing activities		(5,000)		-
Financing activities
Proceeds from common shares to be issued		270,000		-
Related party loans and advances		60,367		-
Net cash flows generated by financing activities		330,367		-
Net increase in cash		128,816		3,671
Cash (bank overdraft), beginning of period		8,602		(190)
Cash, end of period	$	137,418	$	3,481

The accompanying notes are an integral part of these interim condensed consolidated financial statements
F-4

Axiom Corp. and Subsidiary

Notes to the Interim Condensed Consolidated Financial Statements

For thethree months endedMarch 31, 2015 and 2014

(Expressed in United States Dollars)

1.         Nature of Business, Economic Dependence and Going Concern

Axiom Corp. (“Axiom” orthe “Company”) was incorporated in the State of Colorado on April 2, 2012.

On February 23, 2015,the Companyentered into a Share Exchange Agreement (the “Share Exchange Agreement”) with shareholders of Papernuts Corporation (the “Papernuts Shareholders”) and Kranti Kumar Kotni, the controlling stockholder ofAxiom (the “Controlling Stockholder”).  Pursuant to the Share Exchange Agreement,the Papernuts Shareholdersagreed toexchange up to 1,220,165 shares, which represents 100%of the common stock ofPapernuts Corporation (“Papernuts”), for up to Fifty Two Million (52,000,000) shares ofAxiom’s common stock (the “Company Shares”). 

On February 26, 2015, the Company closed on the Share Exchange Agreement, with 95.6% of the Papernuts Shareholders exchanging a total of 1,166,540common shares (the “Papernuts Exchanged Shares”) for a total of 49,714,642 Axiom Shares (the “Company Exchanged Shares”). Each Papernuts Exchanged Shares was converted into the number ofCompany Exchanged Shares at an exchange ratio of 42.617187019 (the “Exchange Ratio”), rounded, if necessary, up to the nearest whole share (the “Share Exchange”).

Pursuant to the Share Exchange Agreement, the Company also issued warrants to purchase a total of 5,650,000 shares of the Company’s Common Stock at exercise prices ranging from $0.056 to $0.075 per share.  These warrants have terms which are the same as and replace warrants previously held by Papernuts warrant holders. (see also note 11).

Additionally, on February 23, 2015, Mr. Scott MacRae, theformerChief Executive Officer of Papernuts, entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with the Controlling Shareholder, whereby Mr. MacRae purchased 30,000,000 shares (the “Shares”) of the Company’s common stock beneficially owned by Mr. Kotni. The Shares were purchased by Mr. MacRae for an aggregate purchase price of $75,000.

As a result of the Share Exchange transaction and the transaction between Mr. MacRae and Mr. Kotni, Papernuts Canada has become a majority owned subsidiary of the Company and the Company now carries on the business of Papernuts Canada as its primary business.

Additionally, as required by the Share Exchange Agreement, the Company and Mr. Kotni entered into a Share Transfer & Assignment Agreement dated February 26, 2015, pursuant to which the Company, following the Closing of the Share Exchange Agreement, transferred to Mr. Kotni all of the issued and outstanding shares of the Company’s formerly wholly-owned subsidiary, Acton Holdings Limited, a Kenyan company. Mr. Kotni assumes all the liabilities of Acton Holdings Limited.

Papernuts was incorporated in Ontario, Canada on April 8, 2010 as 2239794 Ontario Inc. On January 19, 2015 Papernuts changed its name to Papernuts Corporation.The Company’s primary focus is the sale of paper and equipment. The Company’s registered office is as follows: 380 Vansickle Road, Unit 600, St. Catharines, Ontario, Canada, L2S 0B5.

AtMarch 31, 2015, the Company had not yet achieved profitable operations, had an accumulated deficit of $1,341,259 and expects to incur further losses in the development of its business, all of which castssignificantdoubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to raise additional funding to further develop operations and a sales and marketing program so as to grow revenue and attain profitability. Although the Company has been successful in the past in obtaining financing, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms advantageous to the Company.

During the period approximately 48% of revenues were derived from one customer (2014 – 62% from this same customer).

F-5

Axiom Corp. and Subsidiary

Notes to the Interim Condensed Consolidated Financial Statements

For thethree months endedMarch 31, 2015 and 2014

(Expressed in United States Dollars)

2.         Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

These unaudited interim condensed consolidated financial statements include the accounts of the Company and its 95.6% owned subsidiary, Papernuts. All inter-company balances and transactions have been eliminated on consolidation. The accompanying unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Significant estimates include the use of the going concern assumption, the useful life of its equipment and intangible assets and the valuation of equipment and intangible assets.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. At March 31, 2015 and December 31, 2014, the Company had a cash balance of $137,418 and $8,602 respectively. The Company had funds in trust of $70,747 as at March 31, 2015 (December 31, 2014 - $Nil).

Revenue Recognition and Deferred Revenue

Revenue from product sales is recognized when the customer takes title, assumes the risks and rewards of ownership and collectability is reasonably assured. Revenue is recorded at the time of shipment for terms designated f.o.b. (free on board) shipping point. For sales transactions designated f.o.b. destination, revenue is recorded when the product is delivered to the customer’s delivery site, when title and risk of loss are transferred.

Revenue from the sale of licences and distribution agreements is recognized over the related term of the agreement.  Proceeds received prior to the Company meeting its revenue recognition criteria is recorded as deferred revenue and shown as either a current or non-current liability depending on the expected timing of recognition.

Shipping and Handling Costs

Shipping and handling costs, such as freight to our customers’ destinations, are included in cost of revenue in the statement of operations and comprehensive loss. When shipping and handling costs are included in the sales price charged for our products, they are recognized in revenue.

Inventories

Inventories are valued at the lower of cost or market using the average cost method. Inventory is periodically reviewed for use and obsolescence, and adjusted as necessary. Inventory consists of raw material and finished goods.

F-6

Axiom Corp. and Subsidiary

Notes to the Interim Condensed Consolidated Financial Statements

For thethree months endedMarch 31, 2015 and 2014

(Expressed in United States Dollars)

2.         Significant Accounting Policies - continued

Equipment

Equipment is stated at cost, less accumulated depreciation. Expenditures for betterments are capitalized, whereas normal repairs and maintenance are expensed as incurred. The straight-line method is used to depreciate equipment over its estimated useful life, ranging from 3-5 years.

Intangible Assets

Intangible assets are stated at cost, less accumulated amortization. The straight-line method is used to amortize intangible assets over their estimated useful life, for a period of up to 10 years.

Impairment of Long-lived Assets

The Company periodically evaluates the carrying value of long-lived assets in accordance with GAAP, which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost of disposal.

Loss per Share

Basic loss per share is calculated by dividing the Company’s net loss applicable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per share is calculated by dividing the Company’s net loss available to common stockholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity instruments, if dilutive. In periods that the Company reports a net loss, loss per share is not presented on a diluted basis, as the result would be anti-dilutive.

Income Taxes

Income taxes are computed in accordance with the provisions of ASC Topic 740, which requires, among other things, a liability approach to calculating deferred income taxes. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in its financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The Company is required to make certain estimates and judgments about the application of tax law, the expected resolution of uncertain tax positions and other matters. In the event that uncertain tax positions are resolved for amounts different than the Company’s estimates, or the related statutes of limitations expire without the assessment of additional income taxes, the Company will be required to adjust the amounts of related assets and liabilities in the period in which such events occur. Such adjustment may have a material impact on the Company’s income tax provision and results of operations.

F-7

Axiom Corp. and Subsidiary

Notes to the Interim Condensed Consolidated Financial Statements

For thethree months endedMarch 31, 2015 and 2014

(Expressed in United States Dollars)

2.         Significant Accounting Policies - continued

Fair value of stock based compensation

Stock based compensation is valued using the Black-Scholes option pricing model, which requires the input of highly subjective assumptions including the expected stock price volatility.  Because the Company’s stock options have characteristics significantly different than those of traded options and because changes in the subjective input assumptions can materially affect the calculated fair value, such value is subject to measurement uncertainty.

Research and development costs

Development expenditures are capitalized if they meet the criteria for recognition as an asset, and are amortized over their expected useful lives once they are available for use. Research costs are expensed as incurred.

Fair Value of Financial Instruments

The standard, “Disclosures about Fair Value of Financial Instruments”, defines financial instruments and requires fair value disclosures for those instruments. The standard, “Fair Value Measurements”, defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosures requirements for fair value measures. The carrying amounts reportedon the balance sheets for cash,funds held in trust,accounts receivable,due to related parties,accounts payable and accrued liabilities and loan payable qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. For thedue to related parties, the Company believes the carrying value of the loans approximates fair value as the interest rates are market rates.

The standard establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy defined by the standard are as follows:

Level 1 Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, listed equities and U.S. government treasury securities;

Level 2 Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include non-exchange-traded derivatives such as over the counter forwards, options and repurchase agreements; and

F-8

Axiom Corp. and Subsidiary

Notes to the Interim Condensed Consolidated Financial Statements

For thethree months endedMarch 31, 2015 and 2014

(Expressed in United States Dollars)

Level 3 Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management's best estimate of fair value from the perspective of a market participant. Level 3 instruments include those that may be more structured or otherwise tailored to customers' needs. At each balance sheet date, the Company performs an analysis of all instruments subject to the standard and includes in Level 3 all of those whose fair value is based on significant unobservable inputs.

There were no assets or liabilities measured at fair value on a recurring basis as ofMarch 31, 2015 andDecember 31, 2014.  

Foreign Currency Translation

As further described in Note 4, the Canadian dollar had been the functional and reporting currency of the Company’s business and the consolidated financial statements for periods up to December 31, 2014 were  expressed in Canadian dollars. On January 1, 2015, to reflect the changed circumstances of the Company, the functional currency of the Company and its subsidiaries changed to the United States dollar and the Company decided to change its reporting currency to the United States dollar as well. Accordingly, these consolidated financial statements are expressed in United States dollars.

Monetary assets and liabilities denominated in currencies other than United States dollars are translated into United States dollars at the rate of exchange in effect at the end of the reporting period. Revenues and expenses are translated at the transaction exchange rate. Foreign currency gains and losses resulting from translation are reflected in net income of the period.

Accounting Principles for Future Adoption

In May 2014, FASB issued ASU 2014-09 with the intent of significantly enhancing comparability of revenue recognition practices across entities and industries. The new standard provides a single principles-based, five-step model to be applied to all contracts with customers and introduces new, increased disclosure requirements.  The new standard is effective for annual and interim periods beginning on or after December 15, 2017 and may be applied on either a full or modified retrospective basis.  The Company is currently assessing the impact of the new standard to the Company’s financial statements.

In August 2014, FASB issued ASU 2014-15 providing guidance on how to account for and disclose going concern risks.  The new standard is effective for annual and interim periods beginning on or after December 15, 2016.  The Company is currently assessing the impact of the new standard to the Company’s financial statements.

F-9

Axiom Corp. and Subsidiary

Notes to the Interim Condensed Consolidated Financial Statements

For thethree months endedMarch 31, 2015 and 2014

(Expressed in United States Dollars)

3.         Papernuts Reverse Merger

A reverse acquisition transaction involving a non-public operating entity and a non-operating public company is in substance a share-based payment transaction, rather than a business combination. The Transaction is equivalent to the issuance of shares by the non-public operating entity, Papernuts, for the net assets and the listing status of the non-operating public company, Axiom. The fair value of the shares issued was determined based on the fair value of the common shares issued by Axiom.

A summary of the transaction is as follows:

Deemed issuance of 49,714,642 post-Transaction common shares to the former shareholders of Papernuts Canada                                                                   $ 124,287

Cash and funds held in trust	$            74,967
Accounts payable and accrued liabilities	(17,974)
Due to related parties	(61)
Loans payable	(148,035)
Listing costs reallocated to additional paid-in capital	215,390
Value attributed to Papernuts shares issued	$          124,287

4.         Change of Functional and Reporting Currency

Effective February 26, 2015, Papernut’s functional currency changed to the United States dollar, and accordingly, Papernuts decided to change its reporting currency to the United States dollar. Prior to February 26, 2015, Papernut’s functional currency was the Canadian dollar and the Company used the Canadian dollar as its reporting currency. With the completion of the Share Exchange Agreement, the Company’s assets, liabilities, revenues and expenses are expected to be predominantly denominated in United States dollars and, accordingly, the use of the Canadian dollar to measure and report the Company’s financial performance and financial position became inappropriate. The impact of the currency translation up to February 26, 2015 is recorded in accumulated other comprehensive income. Under the current rate method for the comparative period presented, all assets and liabilities of the Company’s operations were translated from their Canadian dollar functional currency into United States dollars using the exchange rates in effect on the balance sheet date, shareholders’ equity were translated at the historical rates and revenues, expenses and cash flows were translated at the average rates during the reporting period presented.  The resulting translation adjustments are reported under comprehensive income as a separate component of shareholders’ equity.

5.        Inventory 

		March 31, 2015		December 31, 2014
Raw materials	$	6,115	$	11,126
Finished goods		1,312		2,284
Total inventory	$	7,427	$	13,410

F-10

Axiom Corp. and Subsidiary

Notes to the Interim Condensed Consolidated Financial Statements

For thethree months endedMarch 31, 2015 and 2014

(Expressed in United States Dollars)

6.         Equipment

				Accumulated
March 31, 2015		Cost		Depreciation and Impairment		Net Book Value
Furniture	$	3,723	$	(2,362)	$	1,362
Machinery		94,419		(79,739)		14,679
	$	98,142	$	(82,101)	$	16,041

				Accumulated
December 31, 2014		Cost		Depreciation and Impairment		Net Book Value
Furniture	$	3,723	$	(2,136)	$	1,587
Machinery		89,419		(76,722)		12,697
	$	93,142	$	(78,858)	$	14,284

Depreciation expense during the three months ended March 31, 2015 was $3,243 (2014 - $564). 

7.         Intangible Assets

In June 2014, Papernuts acquired the rights to the Papernuts trademark for$75,000.Terms of the agreement are as follows:

·Upon signing the agreement and paying $20,000 (paid in July 2014), the Company received the temporary right to use the Papernuts name and trademark, provided Papernuts comply with certain insurance and other requirements as stipulated by the vendor.

·Upon payment of an additional $55,000, required to be paid by September 15, 2014 (and paid on that date), Papernuts received permanent use and ownership of the Papernuts name, web domain and any trademarks, patents and rights to sell Papernuts products in the US and Canada.

·Papernuts is required to pay a royalty of 2% of sales of Papernuts products, to a maximum of $100,000.

·As part of this agreement, should Papernuts and the vendor not be able to negotiate a distribution contract in the future, Papernuts would be required to acquire certain of the vendor’s inventory and equipment valued at $40,000 (paid in March, 2015). Papernuts has recorded an impairment charge of $35,000 in December, 2014 with respect to this inventory.

Papernuts recorded amortization of $1,844 relating to this asset during the three months ended March 31, 2015 (2014- $Nil) leaving an asset balance of $68,230 as at March 31, 2015 (December 31, 2014 - $70,074).  Amortization over the next five years is expected to be $7,376 per annum.

F-11

Axiom Corp. and Subsidiary

Notes to the Interim Condensed Consolidated Financial Statements

For thethree months endedMarch 31, 2015 and 2014

(Expressed in United States Dollars)

8.         Accounts payable and accrued liabilities

             Accounts payable consisted of the following as at March 31, 2015 and December 31, 2014. 

		March 31, 2015		December 31, 2014
Accounts payable	$	69,534	$	1,826
Accrued liabilities		87,210		124,074
	$	156,744	$	125,898

9.         Related Party Transactions and Balances

		March 31, 2015		December 31, 2014
8% Demand loans	$	153,082	$	99,812
Due to related party		7,561		6,594
Loans payable to related parties	$	160,643	$	106,406

On August 1, 2012,Papernuts received loans of $32,445 (CDN$32,500) from shareholders. The loans were unsecured, and were due and payable on demand as they were contracted to meetPapernut’s 2012 general fiscal obligations.In April, 2014 and January 25, 2015 the shareholders made additional advances of $6,818 (CDN$7,500) and $30,184 (CDN$37,500) respectively to Papernuts.As atMarch 31, 2015 there is principal and interest of $67,554 ($40,290 as at December 31, 2014) outstanding in relation to those loans.

On March 28, 2013Papernuts received loans of $18,345 (CDN$18,629) fromashareholder. The loans were unsecured, and were due and payable on demand as they were contracted to meetPapernut’s 2013 general fiscal obligations.The shareholder made further advances of $30,180 (CDN$32,098) on December 31, 2013 and $11,190 (CDN$12,310) from January 1, 2014 to April 1, 2014.  In January, 2015 the shareholder advanced an additional $15,625 (CDN$18,750).As atMarch 31, 2015, there is principal and interest of $70,514 ($59,522 as at December 31, 2014) outstanding in relation to those loans.

In January, 2015 Papernuts received a loan of $15,625 (CDN$18,750) from a shareholder. As at March 31, 2015, there is a principal and interest of $15,014 (December 31, 2014 - $Nil) outstanding in relation to this loan.

During the periods ended March 31, 2015 and 2014 the shareholders charged interest of $2,500 (CDN$3,101) and $1,573 (CDN$1,736), respectively on these demand loans.  No payments of interest have been made and the unpaid interest is included in the loan balances noted above.

As at March 31, 2015, due to related party included an additional $7,500 (December 31, 2014 - $6,594) in fees and expense reimbursements due to officers of the Company.

F-12

Axiom Corp. and Subsidiary

Notes to the Interim Condensed Consolidated Financial Statements

For thethree months endedMarch 31, 2015 and 2014

(Expressed in United States Dollars)

As of March 31, 2015, the Company owes a former director of the Company $61 (December 31, 2014 - $810) for expenditures paid on behalf of the Company.  The amount included in due to related parties is unsecured, non-interest bearing, and has no specified repayment terms.  
  

10.      Loan Payable

On August 1, 2013, Axiom Corp. entered into a line of credit agreement with a third party, enabling the Company to borrow up to $50,000, at 8% per annum, with related amounts being due on demand. During the year ended August 31, 2014, the third party agreed to increase the maximum principal amount to $85,000.  In the quarter ended March 31, 2015 the third party made additional advances under the line of credit. As at March 31, 2015, the amount outstanding under this line of credit was $73,068 with accrued interest of $6,353. In addition to the line of credit the third party advanced $74,967 to the Company’s trust account in connection with the Stock Purchase Agreement described in Note 1.

11.      Deferred Revenue

In April 2013,Papernuts entered into an exclusive distribution agreement providing the rights to commercialize and distribute Papernuts’ converter machines intheOttawa and Hull-Gatineau regions of Canada.

Of the$43,423 up-front licensing fee received, $2,216has been recognized as revenue during thethree months ended March 31, 2015 (three months ended March 31, 2014 - $2,492) and $26,778 has been recorded as deferred revenue as atMarch 31, 2015 (December 31, 2014 - $31,607). The balance of deferred revenue will be amortized into contract revenue over the remaining period ofPapernuts obligations under the agreement of approximately 3.1 years.

12.Stockholder’s Equity

a) The Company’s authorized capital consists of 200,000,000 shares of common stock with a par value of $0.00001 per share, 5,000,000 shares of Series A Preferred stock with a par value of $0.00001 per share and 5,000,000 shares of Preferred B stock with a par value of $0.00001 per share.

	Number of
Capital stock	Shares		Value
Common Shares:
Common shares issued and outstanding as at December 31, 2014	56,433,333	$	564
Common shares of Papernuts issued as of December 31, 2014	1,220,165		798,586
Adjustment for Transaction / Elimination of Papernuts shares and the value of the Company’s capital stock	(1,220,165)		(564)
Shares issued to Papernuts Shareholders in connection with the Transaction	49,714,642		497
Reallocation of Papernuts share capital amounts to reflect the legal capitalization of Axiom subsequent to the transaction	-		(798,022)
Conversion of common shares to Series A and Series B preferred shares(i)	(40,000,000)		(400)
Common Shares as at March 31, 2015	66,147,975	$	661
Series A Preferred Shares
Series A preferred shares issued and outstanding as at December 31, 2014	-	$	-
Conversion of common shares to Series A preferred shares(i)	2,666,668		27
Series A Preferred shares as at March 31, 2015	2,666,668	$	27
Series B Preferred Shares
Axiom’s series B preferred shares issued and outstanding as at December 31, 2014	-	$	-
Conversion of common shares to Series B preferred shares(i)	1,000,002		10
Series B Preferred shares as at March 31, 2015	1,000,002	$	10
Capital stock as at March 31, 2015		$	698

F-13

Axiom Corp. and Subsidiary

Notes to the Interim Condensed Consolidated Financial Statements

For thethree months endedMarch 31, 2015 and 2014

(Expressed in United States Dollars)

(i)In March, 2015 the Company completed agreements with three directors of Papernuts for the cancellation of 40,000,000 Common Shares of the Company in exchange for a combination of newly issued multi-voting Series A Preferred Shares and multiple-voting Series B Preferred Shares.

As per the agreements, the 40,000,000 common shares were converted into 2,666,668 multiple-voting Series A Preferred Shares and 1,000,002 multiple-voting Series B Preferred Shares.

Series A Preferred Shares are convertible into Common Shares at a ratio of 1:10, meaning each Preferred A Share can convert into ten (10) Common Shares of the Company.   In addition, holders of each Series A Preferred Share shall have the right to one (1) vote for each Common Share into which such Series A Preferred Share could be converted.

Series B Preferred Shares are convertible into Common Shares at a ratio of 1:10, meaning each Preferred B Share can convert into ten (10) Common Shares of the Company.   In addition, holders of each Series B Preferred Share shall have the right to twenty-five (25) votes for each Common Share into which such Series B Preferred Share could be converted.

The Series A and Series B Preferred Shares are non-redeemable and have a par value of $0.00001 per share.

b) Pursuantto the Share Exchange Agreement, the Company also issued warrants to purchase an aggregate of 5,650,000 shares of the Company’s common stock at exercise prices ranging from $0.056 to $0.075 per share to replace warrants previously held by Papernuts warrant holders (the “Warrants”). The Warrants are currently exercisable and may be exercised for a period of 24 months from the date of issuance, February 26, 2015. The Warrants were initially valued at $148,125 using the Black-Scholes pricing model assuming no expected dividends, with a volatility of 100%, expected life of two years and a risk-free rate of 0.43%, and was included in additional paid in capital. As at March 31, 2015 there were 5,650,000 warrants outstanding.

c)In March, 2015 the Company received $270,000 in subscription proceeds for a $0.30 common share private placement expected to close in the second quarter of 2015.

13.      Contingency

In the first quarter of 2015 the Company became aware of a potential claim from an individual stating that he was owed $118,427 (CDN$150,000) worth of Papernuts common shares. No action has been commenced as of the date of this report. Management is of the opinion that this potential claim is without merit. Accordingly, no provision has been made in these financial statements.

F-14

Axiom Corp. and Subsidiary

Notes to the Interim Condensed Consolidated Financial Statements

For thethree months endedMarch 31, 2015 and 2014

(Expressed in United States Dollars)

14.      Subsequent Events

            There were no subsequent events that would have a material impact on these financial statements.

F-15

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

FORWARD LOOKING STATEMENTS

This quarterly report contains forward-looking statements. 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. 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. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited consolidated financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States generally accepted accounting principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "US$" refer to United States dollars and all references to "common stock" refer to the common shares in our capital stock.

As used in this quarterly report, the terms “we”, “us”, “our”, “Axiom” and “our company” mean Axiom Corp. and our 95.6% majority-owned subsidiary, Papernuts Corporation (“Papernuts Canada”), a  corporation established under the laws of the province of Ontario, Canada, unless otherwise indicated.

Overview

The Company, through our subsidiary Papernuts Canada, provides an alternative packaging solution to plastic and corn based loose fill material. We are taking a new approach to the loose-fill packaging industry currently dominated by the polystyrene plastic “peanut” styrofoam fillers, bubble wrap, air pillows, crumpled paper, foam-in-place and corn starch peanut products.  The waste and inconvenience of dealing with plastic material is a problem for many end users.  It commonly needs to be separated from organic or recyclable waste for proper disposal and lasts for thousands of years in landfills.  Plastic and corn-based fillers typically do a poor job of protecting items as they are smooth and can be easily compressed allowing items to migrate and damage to occur.  Our product “Papernuts” is re-usable whereas most plastic products are not.  

Using 100% recycled paper and our Papernuts machine, Papernuts interlocks with each other forming a protective matrix around packaged items. The trend towards environmentally friendly packaging solutions is gaining momentum with companies such as Wal-Mart and other industry leaders, adopting new standards for responsible packaging by way of the “Sustainable Packaging Scorecard.” (http://news.walmart.com/news-archive/2006/11/01/wal-mart-unveils-packaging-scorecard-to-suppliers)  

The main objection to polystyrene “foam peanuts” and corn fillers, besides their typical higher cost and larger carbon footprint, is that they are not made on site but manufactured in a centrally located installation forcing the finished product to be transported with a substantial shipping cost to the purchaser. Papernuts is now purchased as a finished product but for high volume users we also have the ability to supply compact Papernuts “Factories” or

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machines that require only 10 square feet of floor space. Thus, providing the ability to manufacture product protection on site, which reduces the shipping and storage costs associated with competitive products.

We are currently selling the finished Papernuts product to customers and are actively pursuing the needs of high volume end-users.  Additionally, we are in negotiations with several large providers of recycled paper to ensure long-term availability.

Located in a St. Catharines’, Ontario industrial complex, our location serves as corporate office, production facility and storage. The staff is made up of a team of experienced individuals including, management, sales and marketing personnel.

Recent Events

Share Exchange Transaction

On February 23, 2015, the Company entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Papernuts Corporation, a corporation established under the laws of the Province of Ontario, Canada (“Papernuts Canada”), the shareholders of Papernuts Canada (the “Papernuts Canada Shareholders”), and Kranti Kumar Kotni, the controlling stockholder of the Company (the “Controlling Stockholder”).  Pursuant to the Share Exchange Agreement, the Company agreed to acquire up to 1,220,165 shares, which represents 100% shares of common stock of Papernuts Canada, from the Papernuts Canada Shareholders (the “Papernuts Canada Shares”) in exchange for up to Fifty Two Million (52,000,000) restricted shares of the Company’s common stock (the “Company Shares”). 

On February 26, 2015, the Company closed on the Share Exchange Agreement, with 95.6% of the Papernuts Canada Shareholders exchanging a total of 1,166,540 Papernuts Canada Shares (the “Papernuts Exchanged Shares”) for a total of 49,714,642 Company Shares (the “Company Exchanged Shares”). Each Papernuts Exchanged Shares was converted into the number of Papernuts Exchanged Shares at an exchange ratio of 42.617187019 (the “Exchange Ratio”), rounded, if necessary, up to the nearest whole share (the “Share Exchange”). After the Share Exchange, Papernuts Canada becomes a majority-owned subsidiary of the Company. 

Pursuant to the Share Exchange Agreement, the Company also issued warrants to purchase an aggregate of 5,650,000 shares of the Company’s common stock at exercise prices ranging from $0.056 to $0.075 per share to replace warrants previously held by Papernuts Canada warrant holders (the “Warrants”). The Warrants are currently exercisable and may be exercised for a period of 24 months from the date of issuance, February 26, 2015.

The Share Exchange Agreement contains customary representations and warranties.

Additionally, as required by the Share Exchange Agreement, the Company and Mr. Kotni entered into a Share Transfer & Assignment Agreement dated February 26, 2015, pursuant to which the Company, following the Closing of the Share Exchange Agreement, transferred to Mr. Kotni all of the issued and outstanding shares of the Company’s formerly wholly-owned subsidiary, Acton Holdings Limited, a Kenyan company. Mr. Kotni assumes all the liabilities of Acton Holdings Limited.

As a result of the Share Exchange Agreement, (i) we have discontinued all prior operations, and our principal business has become the business of Papernuts Canada, and (ii) Papernuts became a majority owned subsidiary of the Company. As the Papernuts Canada Shareholders obtained the majority of the outstanding shares of the Company through the acquisition, the acquisition is accounted for as a reverse merger or recapitalization of the Company.  As such, Papernuts Canada is considered the acquirer for accounting purposes.

Issuance of Preferred Stocks

In March, 2015, the Company completed transactions with three directors of Papernuts Corporation for the cancellation of 40,000,000 shares of common stock of the Company in exchange for a combination of newly issued Series A Preferred Shares and Series B Preferred Shares.

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After the transaction, the 40,000,000 shares of common stock were converted into 2,666,668 Series A Preferred Shares and 1,000,002 Series B Preferred Shares. 

Series A Preferred Shares are convertible into shares of common stock at a ratio of 1:10, meaning each Preferred A Share can convert into ten (10) Common Shares of the Company.   In addition, holders of each Series A Preferred Share shall have the right to one (1) vote for each Common Share into which such Series A Preferred Share could be converted.

Series B Preferred Shares are convertible into shares of common stock at a ratio of 1:10, meaning each Preferred B Share can convert into ten (10) Common Shares of the Company.   In addition, holders of each Series B Preferred Share shall have the right to twenty-five (25) votes for each Common Share into which such Series B Preferred Share could be converted.

Results of Operations for the Three Months Ended March 31, 2015 and 2014

The following summary of our results of operations should be read in conjunction with our condensed consolidated financial statements for the three months ended March 31, 2015 and 2014 which are included herein.

Our operating results for three months ended March 31, 2015 and 2014 are summarized as follows:

		Three Months Ended March 31, 2015		Three Months Ended March 31, 2014
Revenue	$	11,301	$	14,195
Cost of revenue		(7,297)		(4,900)
Total expense		386,995		28,988
Net loss	$	(384,391)	$	(22,543)

Revenue for the three months ended March 31, 2015 was $11,301 (2014 - $14,195) and cost of revenue was $7,297 (2014 - $4,900) for gross profit of $4,004 and $9,295.

Expenditures during the period totaled $386,995 (2014– $28,988).

The Company incurred advertising and promotion expenses of $1,333 (2014 - $Nil) due to increased promotional activity during the period.

The Company incurred interest expenses of $3,591 (2014 – $2,464) in connection with its shareholder loans outstanding and note payable. The future expense will increase or decrease as further loans are advanced or repaid.

The Company incurred office and general expenses of $8,127 (2014 - $5,549).

The Company incurred rent expenses of $3,273 (2014 - $3,681) which was consistent with the prior period. Rent expense is expected to be consistent in the short-term.

The Company incurred salaries and fees expenses of $156,263 (2014 - $1,214). This expense is expected to be consistent with the current period in the short term.

The Company incurred travel expenses of $5,160 (2014 - $2,195).

The Company had a depreciation and amortization expense of $5,087 (2014- $564) in connection with its existing capital and intangible assets. As the Company adds further equipment, the expense will increase.

The Company incurred research and development costs of $683 (2014 – $1,812).

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The Company incurred professional fees of $55,353 (2014- $11,508) which include audit and review fees as well as legal counsel. The increase relates to additional costs associated with the share exchange transaction described above.

The Company recorded stock-based compensation expense of $148,125 (2014 - $Nil) relating to warrants issued by the Company during the period. The warrants were valued using the Black-Scholes pricing model.

The Company recorded a loss on foreign exchange of $1,400 (2014 – $2,851) in connection with the fluctuating exchange rate.

The Company had net loss and comprehensive loss of $384,391 (2013 - $22,543).

Liquidity and Capital Resources

Working Capital
		At		At
		March 31,		December 31,
		2015		2014
Current Assets	$	235,497	$	46,269
Current Liabilities	$	480,693	$	248,977
Working Capital Deficiency	$	(245,196)	$	(202,708)

Cash Flows
		Three Months Ended		Three Months Ended
		March 31,		March 31,
		2015		2014
Net Cash (Used In) from Operating Activities	$	(196,551)	$	3,671
Increase in Cash	$	128,816	$	3,671

Investing Activities

We used $5,000 in investing activities relating to equipment purchases during the three months ended March 31, 2015.

Financing Activities

We received $60,367 in related party loans and advances during the three months ended March 31, 2015. Additionally we received $270,000 in subscription proceeds for a common share private placement we expect to close in the second quarter of 2015.

Future Financings

We have generated minimal revenues, have achieved losses since our inception, and are relying on our ability to raise additional funding to further develop operations and a sales and marketing program so as to grow revenue and attain profitability. Our financial statements for the three months ended March 31, 2015 have been prepared on a going concern basis and do not include any adjustments that might result from the outcome of this uncertainty. Although we have been successful in the past in obtaining financing, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms advantageous to our Company.

7

If we are unable to obtain the necessary additional financing, then we plan to reduce the amounts that we spend on our operations, including our accounting and legal fees, so as not to exceed the amount of capital resources that are available to us. If we do not secure additional financing our current cash reserves and working capital may not be sufficient to enable us to establish our operations over the next 12 months, even if we do decide to scale back our operations.

Contractual Obligations

As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.

Going Concern

The accompanying financial statements have been prepared assuming that our company will continue as a going concern. As shown in the accompanying financial statements, our company incurred a net loss of $384,391 for the three months ended March 31, 2015 and has not yet produced revenues from operations. These factors raise substantial doubt about our company’s ability to continue as a going concern.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that our company cannot continue as a going concern. Management anticipates that it will be able to raise additional working capital through the issuance of stock and through additional loans from investors.

The ability of our company to continue as a going concern is dependent upon our company’s ability to attain a satisfactory level of profitability and obtain suitable and adequate financing. There can be no assurance that management’s plan will be successful.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Critical Accounting Policies 

The discussion and analysis of our financial condition and results of operations is based upon the accompanying consolidated financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America and are expressed in United States Dollars. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.

Principles of Consolidation

The consolidated financial statements include the accounts of our company and our 95.6% owned subsidiary, Papernuts Canada. All significant intercompany balances and transactions have been eliminated upon consolidation.

8

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. Significant estimates include the useful life of its equipment and intangible assets and the valuation of equipment and intangible assets.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. At March 31, 2015 and December 31, 2014, the Company had a cash balance of $137,418 and $8,602 respectively. The Company had funds in trust of $70,747 as at March 31, 2015 (December 31, 2014 - $Nil).

Financial Instruments

The Company’s financial instruments include cash, accounts receivables, bank overdraft, accounts payable and accrued liabilities and loans payable to related parties. The carrying value of these instruments approximates their fair values due to their short-term nature. Cash and accounts receivables are classified as loans and receivables, bank overdraft, accounts payable and accrued liabilities and loans payable to related parties are classified as other financial liabilities, all of which are measured at amortized cost. It is the opinion of Management that the Company is not exposed to significant interest, currency or credit risks arising from its financial instruments.

Earnings (Loss) Per Share

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. In periods that the Company reports a net loss, loss per share is not presented on a diluted basis, as the result would be anti-dilutive.

Foreign Currency Translation

Our company’s planned operations will be in the United States and Canada, which results in exposure to market risks from changes in foreign currency exchange rates. The financial risk is the risk to our company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, our company does not use derivative instruments to reduce our exposure to foreign currency risk. Our company's functional currency for operations worldwide is the U.S. dollar. Nonmonetary assets and liabilities are translated at historical rates and monetary assets and liabilities are translated at exchange rates in effect at the end of the year. Revenues and expenses are translated at average rates for the year. Gains and losses from translation of foreign currency financial statements into U.S. dollars are included in current results of operations.

Income Taxes

Our company accounts for income taxes using the asset and liability method which provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. Our company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

9

Recent Accounting Pronouncements

Our Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

Item 3.           Quantitative and Qualitative Disclosures About Market Risk

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

Item 4.           Controls and Procedures

Management’s Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president and chief financial officer (our principal executive officer, principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.

As of the end of our quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president and chief financial officer (our principal executive officer, principal financial officer and principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president and chief financial officer (our principal executive officer, principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

During the period covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.   Legal Proceedings

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

In the first quarter of 2015 Papernuts became aware of a potential claim from an individual stating that he was owed $150,000 worth of common shares. No action has been commenced as of the date of this report. Management is of the opinion that this potential claim is without merit. Accordingly, no provision has been made in the financial statements.

Item 1A.        Risk Factors

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

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

In March, 2015, the Company sold  900,000 shares of common stock through a subscription agreement  for total proceeds of  $270,000. The shares were issued at a price of $0.30 per common share.

The above issuances of shares are exempt from registration, pursuant to Section 4(2) of the Securities Act. These securities qualified for exemption under Section 4(2) of the Securities Act since the issuance securities by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of securities offered. We did not undertake an offering in which we sold a high number of securities to a high number of investors. In addition, these stockholders had the necessary investment intent as required by Section 4(2) since they agreed to and received share certificates bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act for this transaction.

Item 3.           Defaults Upon Senior Securities

None.

Item 4.           Mine Safety Disclosures

Not applicable.

Item 5.           Other Information

None.

11

Item 6.           Exhibits

Exhibit Number	Description
10.1	Form of Subscription Agreement
31.1*	Certification of Principal Executive Officer of the Registrant pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer of the Registrant pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1+	Certification of Principal Executive Officer of the Registrant pursuant to 18U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2+	Certification of Principal Financial Officer of the Registrant pursuant to 18U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(101)**	Interactive Data File
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

*	Filed herewith.
+	In accordance with SEC Release 33-8238, Exhibit 32.1 is 32.2 are being furnished and not filed

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	AXIOM CORP.
	(Registrant)
Dated: May 18, 2015	/s/ Tyler Pearson
	Tyler Pearson
	Chief Executive Officer, Principal Executive Officer and Director
Dated: May 18, 2015	/s/ Andrew Hilton
	Andrew Hilton
	Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer

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