UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1-SA
[X] SEMIANNUAL REPORT PURSUANT TO REGULATION A
or
[ ] SPECIAL FINANCIAL REPORT PURSUANT TO REGULATION A
For the fiscal semiannual period endedJanuary 31, 2019
NDN BV, INC.
(Exact name of issuer as specified in its charter)
Wyoming | 83-1011129 |
State or other jurisdiction of incorporation or organization | (I.R.S. Employer Identification No.) |
19901 Southwest Freeway # 203, Sugar Land TX 77479
(Full mailing address of principal executive offices)
281-407-2709
(Issuer’s telephone number, including area code)
1
ITEM 1. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Note Regarding Forward-looking Statements
Certain matters discussed herein are forward-looking statements. Such forward-looking statements contained in this annual report involve risks and uncertainties, including statements as to:
our future operating results,
our business prospects,
our contractual arrangements and relationships with third parties,
the dependence of our future success on the general economy and its impact on the industries in which we may be involved,
the adequacy of our cash resources and working capital, and
other factors identified in our filings with the SEC, press releases, if any and other public communications.
These forward-looking statements can generally be identified as such because the context of the statement will include words such as we “believe," “anticipate,” “expect,” “estimate” or words of similar meaning. Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which are described in close proximity to such statements and which could cause actual results to differ materially from those anticipated as of the date of this report. Shareholders, potential investors and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included herein are only made as of the date of this offering circular and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
The following discussion and analysis provides information which management believes to be relevant to an assessment and understanding of the Company's results of operations and financial condition. This discussion should be read together with the Company's financial statements and the notes to financial statements, which are included in this offering circular.
This management's discussion and analysis or plan of operation should be read in conjunction with the financial statements and notes thereto of the Company included elsewhere in this offering circular. Because of its nature of a development stage company, the reported results will not necessarily reflect the future.
We qualify as an “emerging growth company” under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:
have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;
comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);
submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay” and “say-on-frequency;” and
disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation.
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
We will remain an “emerging growth company” for up to five years, or until the earliest of
i.the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion,
2
ii.the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or
iii.the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.
Operations
We were incorporated in June 2018 to implement the business plan developed by Jayesh Patel. He developed a formula for an organic beer that will be slow brewed in Denmark. The Company has engaged an independent distributor to distribute the newly-brewed beer to restaurants starting during December 2018. Indian, Japanese and Italian restaurants in Florida, New York, New Jersey, Virginia, Texas and California will be the initial market area. The distributor will handle all state and Federal regulatory and compliance requirements relating to the sale of alcoholic beverages. The first shipment of beer arrived in the United States on November 26, 2018 and will be stored in the distributor 's warehouse in New Jersey.
We have agreed to pay the distributor a fee equivalent to the higher of (i) $ 2,500 per month or (ii) a fee (ranging from $1.50 to $3.50) per case of beer distributed from the distributor’s warehouse.
The Company had its first sale of the organic beers to Park Street Imports, Inc. in December 2018. Most of the Company’s efforts through January 31, 2019 related to arranging for the brewing and distribution of the Company’s beer and ale. Going forward, the Company will work with distributors to commence and increase sales. It cannot predict as to the likely success of its efforts.
Liquidity
The Company has no committed sources of funds and will be dependent on funds provided or obtained by Jayesh Patel until other sources of funds are obtained. Mr. Patel’s ability to provide funds is very limited.
Recently Issued Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its 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.
Section 10.7 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may, therefore, not be comparable to those of companies that comply with such new or revised accounting standards.
Critical Accounting Policies
The preparation of financial statements and related notes requires us to make judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements.
Financial Reporting Release No. 60 requires all companies to include a discussion of critical accounting policies or methods used in the preparation of financial statements. There are no critical policies or decisions that rely on judgments that are based on assumptions about matters that are highly uncertain at the time the estimate is made. Note I to the financial statements, included in the offering circular, includes a summary of the significant accounting policies and methods used in the preparation of our financial statements.
Seasonality
We do not expect a lot of seasonality affecting our business.
3
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements, as defined in Item 303(a) (4) (ii) of Regulation S-K, obligations under any guarantee contracts or contingent obligations. We also have no other commitments, other than the costs of being a public company that will increase our operating costs or cash requirements in the future.
ITEM 2. OTHER INFORMATION
None
4
ITEM 3. FINANCIAL STATEMENTS
NDN BV, INC.
Balance Sheet
As of January 31, 2019, and July 31, 2018
ASSETS |
| January 31, 2019 |
| July 31, 2018 |
|
| (Unaudited) |
|
|
CURRENT ASSETS: |
|
|
|
|
Cash | $ | 3,941 | $ | 4,319 |
Inventory |
| 8,025 |
| - |
Prepaid expenses |
| 1,200 |
| 9,976 |
TOTAL ASSETS | $ | 13,166 | $ | 14,295 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) |
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
Accrued compensation and expenses | $ | 25,500 | $ | 13,831 |
Accounts payable |
| 7,963 |
| 1,736 |
Total |
| 33,463 |
| 15,567 |
|
|
|
|
|
LOAN FROM COMPANY PRESIDENT |
| 82,151 |
| 16,251 |
Total |
| 115,614 |
| 31,818 |
|
|
|
|
|
STOCKHOLDERS’ (DEFICIT): |
|
|
|
|
|
|
|
|
|
Preferred stock at $0.001 par value; 10,000,000 shares authorized, 1,000,000 issued and outstanding |
| 1,000 |
|
1,000 |
Common stock at $0.001 par value; 199,000,000 shares authorized; 6,090,000 shares issued and outstanding as of January 31, 2019 and 5,815,000 shares issued and outstanding as of July 31, 2018 |
| 6,090 |
|
5,815 |
Additional paid-in capital |
| (6,500) |
| (6,500) |
Accumulated deficit |
| (103,038) |
| (17,838) |
Total Stockholders’ (Deficit) |
| (102,448) |
| (17,523) |
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) | $ | 13,166 | $ | 14,295 |
See accompanying notes to the financial statements.
5
NDN BV, INC.
Statement of Operations
For the Six Months Ended January 31, 2019
(unaudited)
Revenue | $ | 23,760 |
Cost of goods sold |
| (15,097) |
Gross Margin |
| 8,663 |
|
|
|
Advertising and marketing |
| (15,304) |
General and administrative |
| (78,559) |
Total Operating Expenses |
| (93,863) |
|
|
|
Net loss | $ | (85,200) |
|
|
|
Net loss per common share - basic and diluted | $ | (0.01) |
Weighted average number of common shares outstanding basic and diluted. |
| 6,090,000 |
See accompanying notes to the financial statements.
6
NDN BV, INC.
Statement of Stockholders’ Deficit
For the Period June 22, 2018 (inception) to January 31, 2019
| Preferred Shares | Amount | Common Shares | Amount | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at inception | 1,000,00 | $ 1,000. | 5,815,000 | $ 5,815 | $ (6,500) | - | $315 |
Net Loss for the period | - | - |
| - | - | $(17,838) | (17,838) |
Balance, August 1, 2018 | 1,000,00 | 1,000. | 5,815,000 | 5,815 | $ (6,500) | (17,838) | (17,523) |
Shares issued | - | - | 275,000 | 275 | - | - | 275 |
Net loss for the period | - | - | - | - | - | (85,200) | (85,200) |
Balance January 31, 2019 | 1,000,00 | $1,000 | 6,090,000 | $ 6,090 | $ (6,500) | $(103,038) | $(102,448) |
See accompanying notes to the financial statements.
7
NDN BV, INC.
Statement of Cash Flows
For the Six Months Ended January 31, 2019
OPERATING ACTIVITIES: |
|
|
Net Loss | $ | (85,200) |
Adjustment to reconcile net loss to net cash used in operating activities: |
|
|
Net change in: |
|
|
Inventory |
| (8,025) |
Prepaid expenses |
| 8,776 |
Accrued liabilities |
| 11,669 |
Accounts payable |
| 6,227 |
Net Cash Used by Operating Activities |
| (66,553) |
|
| |
FINANCING ACTIVITIES: |
|
|
Proceeds from issuance of common stock |
| 275 |
Loan from Company President |
| 65,900 |
Net Cash Flows |
| 66,175 |
|
|
|
DECREASE IN CASH |
| (378) |
|
|
|
CASH AT BEGINNING OF FISCAL PERIOD |
| 4,319 |
CASH AT END OF FISCAL PERIOD | $ | 3,941 |
See accompanying notes to the financial statements.
8
NDN BV, INC.
Notes to Financial Statements
For the Six Months Ended January 31, 2019
(unaudited)
NOTE 1 - ORGANIZATION
NDN BV, Inc. (the "Company'') was incorporated under the laws of the State of Wyoming on June 22, 2018. The Company's business plan involves the making and distribution of organic craft beer using a formula based on beers brewed in India. The Company’s initial sales took place in December 2018.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The Company's financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").
Interim Financial Statements
The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year end, January 31, 2019, have been omitted.
Year-end
The Company has elected a fiscal year ending on July 31.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. 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 reporting period. Actual results could differ from those estimates.
Cash Equivalents
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
Revenue Recognition
The Company recognizes revenue when it is realized or realizable and earned less estimated future doubtful accounts. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the services have been rendered or assets shipped to a customer, (iii) the sales price is fixed or determinable, and (iv) collectibility is reasonably assured.
Inventory
Inventories are stated at lower of cost determined on an average cost basis or net realizable value. Cost includes cost of labor, materials and overhead.
9
Income Taxes
The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company had no material adjustments to its liabilities for unrecognized income tax benefits.
Fair value of financial instrument
Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:
Level I Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2 Pricing inputs other than quoted prices in active markets included in Level I, which are either directly or indirectly observable as of the reporting date.
Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data.
TheCompany doesnot haveany assets orliabilitiesmeasured at fair valueonarecurringor non-recurringbasis, consequently,theCompanydid not haveany fairvalue adjustmentsfor assets andliabilitiesmeasured atfair value atJanuary 31, 2019.
Basicnet losspershareis computedby dividing netlossby theweighted averagenumberof shares of common stock outstandingduringthe period.Dilutednet losspershareiscomputedbydividingnet loss by theweightedaverage numberofshares ofcommonstockandpotentiallyoutstanding shares of common stock during eachperiod. Therewereno potentially dilutive sharesoutstanding asof January 31, 2019.
Subsequent Events
TheCompany hasevaluatedalltransactionsfromJanuary 31, 2019through the financialissuance datefor subsequent eventdisclosureconsideration andnoted nosignificantsubsequentevent that needsto be disclosed.
Recently Issued Accounting Standards
The Company has implemented all newaccountingpronouncements thatarein effectandthat may impact itsfinancialstatements and doesnotbelievethat thereareanyothernew accounting pronouncements thathavebeen issued thatmighthavea materialimpacton its financialposition orresultsof operations.
Accounting Pronouncements Recently Issued and Adopted
In 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) guidance on leases, with amendments issued in 2018. The guidance requires lessees to recognize most leases on the balance sheet but does not change the manner in which expenses are recorded in the income statement. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. The two permitted transition methods under the guidance are the modified retrospective transition approach, which requires application of the guidance for all comparative periods presented, and the cumulative effect adjustment approach, which requires prospective application at the adoption date. The Company adopted the standard on January 1, 2019. The Company does not have any long term lease as of 1/31/2019, as such the adoption of the standard has no impact on the Company’s financial statement and disclosures.
Accounting Pronouncements Recently Issued and Not Yet Adopted
In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606 (“ASU 2018-18”). ASU 2018-18 clarifies when certain transactions between collaborative arrangement participants should be accounted for under ASC 606 and incorporates unit-of-account guidance consistent with ASC 606 to aid in this determination. ASU 2018-18 is effective for public companies for annual and interim periods beginning after December 15, 2019, with early adoption permitted. ASU 2018-18 should generally be applied retrospectively to the date of initial application of Topic 606. Management is currently assessing the impact ASU 2018-18 will have on the Company, but it is not expected to have a material impact on the Company’s financial statement disclosures.
10
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820) (“ASU 2018-13”). ASU 2018-13 modifies the disclosure requirements for fair value measurements. ASU 2018-13 is effective for public companies for annual and interim periods beginning after December 15, 2019. Early adoption is permitted for any removed or modified disclosures. Management is currently assessing the impact ASU 2018-13 will have on the Company, but it is not expected to have a material impact on the Company’s financial statement disclosures.
NOTE 3-GOING CONCERN
Theaccompanying financialstatementshave been preparedonagoing concernbasiswhich contemplates the realizationofassets and satisfaction ofliabilities in the normalcourse ofbusiness.AtJanuary 31, 2019, the Companyhad negativeworking capitaland an accumulated deficit andhad small amounts of revenues.These factors,among others,indicate that theCompany's continuation as a going concernis dependentupon its abilitytoachieveprofitableoperations or obtain adequatefinancing.Thefinancialstatements donot include anyadjustments relatedtotherecoverabilityandclassificationofrecordedassetamountsorthe amountsand classification ofliabilitiesthatmight benecessaryshouldtheCompanybeunabletocontinueinexistence.
TheCompanyintendstoseek revenue producingand selling organic craftbeer usingaformula basedonbeersbrewedin Indiawithplans to actively commencesalesin mid-2019.The Companyalso intendstoraisecapitalin the market using techniquesconsistent withRegulationA. No assurances canbegivenasto thelikelysuccess of these efforts.
NOTE4-STOCKHOLDERS' DEFICIT
PreferredStock
TheCompany's certificate ofincorporationauthorizes theissuanceofI0,000,000shares ofpreferredstock with designations,rights andpreferences determined from time to time by its boardof directors. Accordingly,theCompany'sboardof directorsisempowered,without stockholder approval,to issueshares ofpreferredstock withvoting,liquidation,conversion, orother rightsthatcouldadversely affectthe rightsoftheholdersof the commonstock.
At inception,theCompanyissued1,000,000shares ofpreferredstocktoJaiPatel,itsfounderand President. These shares provide theholderwith 5% voteinall shareholder votes.
As ofJanuary 31, 2019,theCompanyhad1,000,000sharesofpreferredstockissuedandoutstanding.
CommonStock
TheholdersoftheCompany'scommonstock:
Haveequal ratable rightsto dividendsfrom funds legally available forpaymentofdividendswhen,as and ifdeclared by the boardofdirectors;
Areentitled toshareratablyinall of the assets available fordistribution to holdersof commonstock uponliquidation,dissolutionorwindingup of ouraffairs;
Donothavepreemptive,subscriptionor conversionrights,or redemption or accesstoanysinking fund;
are entitledtoonenoncumulative voteper share on allmatters submitted tostockholders for a vote at anymeetingof stockholders.
Atinception,theCompanyissued5,815,000 shares of commonstockto five shareholders,including5,500,000shares to Jai Patel.
InOctober 2018theCompanyissued I00,000shares ofitscommonstock tothepersonwho agreed to becomeitschieffinancial officer.
In December, the Company issued 275,000 shares of its common stock to independent consultants and advisors.
At January 31, 2019 there were 6,090,000 shares of common stock outstanding.
11
TheCompanyhasanet tax losscarryforward of $102,763 atJanuary 31,2019 thatexpiresin2038.It has establisheda valuation allowance against thepotential benefits related to this carryforward becauseofthe uncertaintysurroundingtherealizationof suchbenefit.
NOTE 6 - PREPAIDEXPENSES
Prepaidexpenses arerelated tosecurity deposits for renting an office.
NOTE7- RELATED PARTY TRANSACTIONS
The Company has also accrued compensation of $24,000 for the six months ended January 31, 2019 for its President and $1,500 for its Chief Financial Officer.
12
ITEM 4. EXHIBITS
None
SIGNATURES
Pursuant to the requirements of Regulation A, the issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
NDN BV, Inc:
By: /s/ Jayesh Patel
Jayesh Patel
Chief Executive Officer
Date: May 20, 2019
Pursuant to the requirements of Regulation A, this report has been signed below by the following persons on behalf of the issuer and in the capacities and on the dates indicated.
Name |
| Title |
| Dates |
|
|
|
|
|
/s/ Jayesh Patel |
| Chairman, President and CEO |
| May 20, 2019 |
Jayesh Patel |
|
|
|
|
|
|
|
|
|
/s/ Lahari Neelapareddy |
| Chief Financial Officer, Principal Accounting Officer |
| May 20, 2019 |
Lahari Neelapareddy |
|
|
|
|
13
