U.S.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
[X] QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE
SECURITIES EXCHANGE ACT OF 1934
For the
quarterly period ended September 30, 2010
OR
[ ] TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE
SECURITIES EXCHANGE ACT OF 1934
For the
transition period from _________ to __________
Commission
File No.
0-27633
INTERNET
INFINITY, INC.
(Exact
name of registrant as specified in its charter)
State of
Incorporation: Nevada
IRS
Employer I.D. Number: 95-4679342
413
Avenue G, # 1
Redondo
Beach, California 90277
Telephone
310-493-2244
(Address
and telephone number of registrant’s principal
executive
offices and principal place of business)
Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past twelve months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90
days. Yes [X] No [ ]
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.
Large
accelerated filer
[ ] Accelerated
filer [ ]
Non-accelerated
filer
[ ] Smaller
reporting company [X]
As of
November 15, 2010, there were 28,718,780 shares of the Registrant’s Common
Stock, par value $0.001 per share, outstanding.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes [X] No
[ ]
Transitional
Small Business Disclosure Format (check one): Yes [ ] No
[X]
TABLE
OF CONTENTS
|
|
Page
|
|
|
|
PART
I - FINANCIAL INFORMATION
|
3
|
|
|
|
Item
1.
|
Financial
Statements
|
3
|
|
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and
|
|
|
Results
of Operations
|
14
|
|
|
|
Item
4.
|
Controls
and Procedures
|
15
|
|
|
|
PART
II - OTHER INFORMATION
|
15
|
|
|
|
Item
1.
|
Legal
Proceedings
|
15
|
|
|
|
Item
6.
|
Exhibits
|
16
|
|
|
|
SIGNATURES
|
17
|
INTERNET
INFINITY INC.
|
Balance
Sheet
|
as
at September 30, 2010 (unaudited) and March 31, 2010
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
|
Maerch
31,
|
|
|
|
2010
|
|
|
2010
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
403
|
|
|
$
|
-
|
|
Accounts
Receivable
|
|
$
|
4,850
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,253
|
|
|
|
-
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
|
Accounts
Payable and Accrued Expenses
|
|
$
|
250,439
|
|
|
$
|
256,892
|
|
Note
Payable
|
|
|
27,000
|
|
|
|
27,000
|
|
Note
Payable - Related Parties
|
|
|
411,400
|
|
|
|
411,400
|
|
Due
to Officer
|
|
|
339,199
|
|
|
|
305,239
|
|
Due
to related party
|
|
|
7,209
|
|
|
|
7,209
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
1,035,247
|
|
|
|
1,007,740
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity (Deficit)
|
|
|
|
|
|
|
|
|
Preferred
Stock, $0.001 par value, 30,000,000 shares authorized,
|
|
|
|
|
|
|
|
|
none
issued and outstanding at March 31, 2010 and 2009
|
|
|
|
|
|
|
|
|
Common
Stock, $0.001 par value, 100,000,000 shares authorized,
|
|
|
|
|
|
|
|
|
28,718,780
shares issued and outstanding as at September 30, 2010
|
|
|
|
|
|
|
|
|
and
March 31, 2010
|
|
|
28,719
|
|
|
|
28,719
|
|
Additional
Paid-in Capital
|
|
|
1,075,043
|
|
|
|
1,075,043
|
|
Accumulated
Deficit
|
|
|
(2,133,756
|
)
|
|
|
(2,111,502
|
)
|
|
|
|
|
|
|
|
|
|
Total
Stockholders' Equity (Deficit)
|
|
|
(1,029,994
|
)
|
|
|
(1,007,740
|
)
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|
$
|
5,253
|
|
|
$
|
-
|
|
INTERNET
INFINITY INC.
|
Statement
of Operations
|
for
the Three and Six months Periods Ended September 30, 2010 and
2009
|
T
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the the 3 months ended
|
|
|
For
the the 6 months ended
|
|
|
|
|
September
30,
|
|
|
September
30,
|
|
|
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
-
|
|
|
$
|
9,000
|
|
|
$
|
-
|
|
|
$
|
9,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of Revenue
|
|
|
-
|
|
|
|
1,800
|
|
|
|
-
|
|
|
|
1,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
-
|
|
|
|
7,200
|
|
|
|
-
|
|
|
|
7,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional
Fees
|
|
|
2,680
|
|
|
|
23,935
|
|
|
|
5,937
|
|
|
|
30,009
|
|
|
Consulting
|
|
|
-
|
|
|
|
-
|
|
|
|
1,100
|
|
|
|
900
|
|
|
Other
|
|
|
1,174
|
|
|
|
3,920
|
|
|
|
664
|
|
|
|
5,120
|
|
|
Total Operating Expenses
|
|
|
3,854
|
|
|
|
27,855
|
|
|
|
7,701
|
|
|
|
36,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
from operations
|
|
|
(3,854
|
)
|
|
|
(20,655
|
)
|
|
|
(7,701
|
)
|
|
|
(28,829
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating
income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
-
|
|
|
|
(13,173
|
)
|
|
|
(14,553
|
)
|
|
|
(26,161
|
)
|
|
Total
other expense
|
|
|
-
|
|
|
|
(13,173
|
)
|
|
|
(14,553
|
)
|
|
|
(26,161
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
before income taxes
|
|
|
(3,854
|
)
|
|
|
(33,828
|
)
|
|
|
(22,254
|
)
|
|
|
(54,990
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for income taxes
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
$
|
(3,854
|
)
|
|
$
|
(33,828
|
)
|
|
$
|
(22,254
|
)
|
|
$
|
(55,790
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted net loss per common share
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted weighted average number of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
common
shares outstanding
|
|
|
28,718,780
|
|
|
|
28,718,780
|
|
|
|
28,718,780
|
|
|
|
28,718,780
|
|
INTERNET
INFINITY INC.
|
Statement
of Stockholders' Equity (Deficit)
|
For
the period from April 1, 2006 to September 30, 2010
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
|
Additional
|
|
|
|
|
|
Total
|
|
|
|
Number
of
|
|
|
|
|
|
Paid-In
|
|
|
Accum
ulated
|
|
|
Stockholders'
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances
as of April 1, 2006
|
|
|
18,718,780
|
|
|
$
|
18,719
|
|
|
$
|
825,877
|
|
|
$
|
(1,677,595
|
)
|
|
$
|
(832,999
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued part for debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
settlement,
part for cash
|
|
|
10,000,000
|
|
|
|
10,000
|
|
|
|
240,000
|
|
|
|
|
|
|
|
250,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(130,344
|
)
|
|
|
(130,344
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances,
March 31, 2007
|
|
|
28,718,780
|
|
|
$
|
28,719
|
|
|
$
|
1,065,877
|
|
|
$
|
(1,807,939
|
)
|
|
$
|
(713,343
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
contribution
|
|
|
|
|
|
|
|
|
|
|
3,667
|
|
|
|
|
|
|
|
3,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(119,527
|
)
|
|
|
(119,527
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances,
March 31, 2008
|
|
|
28,718,780
|
|
|
$
|
28,719
|
|
|
$
|
1,069,544
|
|
|
$
|
(1,927,466
|
)
|
|
$
|
(829,203
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
contribution
|
|
|
|
|
|
|
|
|
|
|
5,499
|
|
|
|
|
|
|
|
5,499
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(107,528
|
)
|
|
|
(107,528
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances,
March 31, 2009
|
|
|
28,718,780
|
|
|
$
|
28,719
|
|
|
$
|
1,075,043
|
|
|
$
|
(2,034,994
|
)
|
|
$
|
(931,232
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(76,508
|
)
|
|
|
(76,508
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances,
March 31, 2010
|
|
|
28,718,780
|
|
|
$
|
28,719
|
|
|
$
|
1,075,043
|
|
|
$
|
(2,111,502
|
)
|
|
$
|
(1,007,740
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(22,254
|
)
|
|
|
(22,254
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances,
Sep. 30, 2010
|
|
|
28,718,780
|
|
|
|
28,719
|
|
|
|
1,075,043
|
|
|
|
(2,133,756
|
)
|
|
|
(1,029,994
|
)
|
INERNET
INFINITY INC.
|
Statement
of Cash Flows
|
for
the six months ended September 30, 2010 and 2009
|
(Unaudited)
|
|
|
|
|
|
|
|
2010
|
|
|
2009
|
|
Cash
flows from operating activities:
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(22,254
|
)
|
|
$
|
(55,790
|
)
|
Adjustments
to reconcile net loss to
|
|
|
|
|
|
|
|
|
net
cash used by operating activities:
|
|
|
|
|
|
|
|
|
Capital
contribution via services provided
|
|
|
|
|
|
|
|
|
Change
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
Receivable
|
|
|
|
|
|
|
(6,000
|
)
|
Accounts
payable
|
|
|
(6,453
|
)
|
|
|
97,949
|
|
Net
cash (used by) operating activities
|
|
|
(28,707
|
)
|
|
|
36,159
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash (used by) investing activities
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities:
|
|
|
|
|
|
|
|
|
Increase
(decrease) in due to related party
|
|
|
|
|
|
|
2,400
|
|
Increase
(decrease) in due to officer
|
|
|
33,960
|
|
|
|
(38,509
|
)
|
Net
cash provided by financing
|
|
|
|
|
|
|
|
|
activities
|
|
|
33,960
|
|
|
|
(36,109
|
)
|
|
|
|
|
|
|
|
|
|
Net
increase (decrease) in cash
|
|
|
5,253
|
|
|
|
50
|
|
|
|
|
|
|
|
|
|
|
Cash,
beginning of the period
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Cash,
end of the period
|
|
$
|
5,253
|
|
|
$
|
50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
cash flow disclosure:
|
|
|
|
|
|
|
|
|
Interest
paid during the year
|
|
$
|
-
|
|
|
$
|
-
|
|
Taxes
paid during the year
|
|
$
|
-
|
|
|
$
|
-
|
|
INTERNET
INFINITY, INC.
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2010
NOTE
1 ORGANIZATION
Internet
Infinity, Inc. (III or “the Company”) was incorporated in the State of Delaware
on October 27, 1995. III was in the business of distribution of
electronic media duplication services and electronic blank media. The
Company was re-incorporated in Nevada on December 17, 2004. The
Company is currently seeking an acquisition or merger to redirect the structure
and management to new profitable activities.
NOTE
2 SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
Unaudited
Interim Financial Statements
The
accompanying unaudited financial statements have been prepared by the Company,
pursuant to the rules and regulations of the Securities Exchange commission (the
“SEC”) as applicable to smaller reporting companies, and generally accepted
accounting principles for interim accounting reporting. The
information furnished herein reflects all adjustments (consisting of normal
recurring accruals and adjustments) which are, in the opinion of management,
necessary to fairly present the operating results for the respective
periods. Certain information and footnote disclosures normally
presented in annual financial statements prepared in accordance with accounting
principles generally accepted in the United States of America (“U.S. GAAP”) have
been omitted pursuant to such rules and regulations. These unaudited
condensed financial statements should be read in conjunction with the audited
financial statements and footnotes included in the Company’s Annual Report on
Form 10K. The results of the six month period ended September 30,
2010 are not necessarily indicative of the results to be expected for the full
year ending March 31, 2011.
Cash
and cash equivalents
The
Company considers all liquid investments with a maturity of three months or less
from the date of purchase that are readily convertible into cash to be cash
equivalents.
Use
of estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles 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.
Fair
value of financial instruments
The
Financial Accounting Standards Board issued ASC (Accounting
Standards Codification) 820-10 (SFAS No. 157), “Fair Value Measurements and
Disclosures" for financial assets and liabilities. ASC 820-10 provides a
framework for measuring fair value and requires expanded disclosures regarding
fair value measurements. FASB ASC 820-10 defines fair value as the
price that would be received for an asset or the exit price that
would be paid to transfer a liability in the principal or most advantageous
market in an orderly transaction between market participants on the measurement
date. FASB ASC 820-10 also establishes a fair value hierarchy which
requires an entity to maximize the use of observable inputs, where available.
The following summarizes the three levels of inputs required by the standard
that the Company uses to measure fair value:
-
|
Level
1: Quoted prices in active markets for identical assets or
liabilities.
|
-
|
Level
2: Observable inputs other than Level 1 prices, such as quoted
prices for similar assets or liabilities; quoted prices in
markets that are not active, or other inputs that are observable or can be
corroborated by observable market data for substantially the full term of
the related assets or liabilities.
|
-
|
Level
3: Unobservable inputs that are supported by little or no
market activity and that are significant to the fair value of the assets
or liabilities.
|
The
carrying amounts of the Company’s financial instruments as of April 30, 2010,
reflect:
-
|
Cash: Level
One measurement based on bank
reporting.
|
-
|
Notes
payable to Officers and related parties: Level 2 based on promissory
notes.
|
Income
taxes
The
Company utilizes FASB ACS 740,
“Income Taxes”,
which
requires the recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Under this method, deferred income taxes are
recognized for the tax consequences in future years of differences between the
tax bases of assets and liabilities and their financial reporting amounts at
each period end based on enacted tax laws and statutory tax rates applicable to
the periods in which the differences are expected to affect taxable income.
Valuation allowances are established, when necessary, to reduce deferred tax
assets to the amount expected to be realized.
Basic
and Diluted Earnings Per Share
Net loss
per share is calculated in accordance with FASB ASC 260, Earnings Per Share, for
the period presented. Basic net loss per share is based upon the
weighted average number of common shares outstanding. Diluted net
loss per share is based on the assumption that all dilative convertible shares
and stock options were converted or exercised. Dilution is computed
by applying the treasury stock method. Under this method, options and
warrants are assumed exercised at the beginning of the period (or at the time of
issuance, if later), and as if funds obtained thereby were used to purchase
common stock at the average market price during the period.
The
Company has no potentially dilutive securities outstanding as of September 30,
2010.
Recent
Accounting Pronouncements
In May
2009, the FASB issued new guidance for accounting for subsequent events.
The new guidance, which is now part of ASC 855-10, Subsequent Events (formerly,
SFAS No. 165, Subsequent Events) is consistent with existing auditing standards
in defining subsequent events as events or transactions that occur after the
balance sheet date but before the financial statements are issued or are
available to be issued, but it also requires the disclosure of the date through
which an entity has evaluated subsequent events and the basis for that date. The
new guidance defines two types of subsequent events: “recognized subsequent
events” and “non-recognized subsequent events.” Recognized subsequent events
provide additional evidence about conditions that existed at the balance sheet
date and must be reflected in the company’s financial statements.
Non-recognized subsequent events provide evidence about conditions that arose
after the balance sheet date and are not reflected in the financial statements
of a company. Certain non-recognized subsequent events may require
disclosure to prevent the financial statements from being misleading. The
new guidance was effective on a prospective basis for interim or annual periods
ending after June 15, 2009. The Company adopted the provisions of ASC
855-10 as required.
In June
2009, the FASB issued new guidance which is now part of ASC 105-10 (formerly
Statement of Financial Accounting Standards No. 168, The FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles). ASC 105-10 replaces FASB Statement No. 162, "The Hierarchy of
Generally Accepted Accounting Principles", and establishes the FASB Accounting
Standards Codification as the source of authoritative accounting principles
recognized by the FASB to be applied by nongovernmental entities in the
preparation of financial statements in conformity with generally accepted
accounting principles. ASC 105-10 is effective for interim and annual periods
ending after September 15, 2009. The adoption of ASC 105-10 did not have a
material impact on the Company’s financial statements.
In
January 2010, the FASB issued ASU No. 2010-01, amending SFAS No. 168, “The FASB
Accounting Standards Codification™ and the Hierarchy of Generally Accepted
Accounting Principles.” This Standard codified in ASC 105 is being modified to
include the authoritative and non-authoritative levels of GAAP. This amendment
is effective for financial statements issued for interim and annual periods
ending after September 15, 2009. ASU No. 2010-01 has no effect on the Company’s
financial position, statements of operations, or cash flows at this
time.
In
February 2010, the FASB issued ASU No. 2010-09, “Subsequent Events ( ASC Topic
855), Amendments to Certain Recognition and Disclosure Requirements.” This
Standard update requires a SEC Filer to (1) evaluate subsequent events through
the date that the financial statements are issued or available to be issued, (2)
defines “SEC Filer” as an entity that is required to file or furnish its
financial statements with either the SEC or, with respect to an entity subject
to Section 12(i) of the Securities Exchange Act of 1934, as amended, the
appropriate agency under that Section, (3) not be bound to disclosing the date
through which subsequent events have been evaluated, (4) note the definition of
public entity
is not
longer defined nor necessary for Topic 855, (5) note the scope of the reissuance
disclosure requirements is refined to include revised financial statements only.
These Updates are effective for interim or annual periods ending after June 15,
2010. ASU No. 2010-09 has no effect on the Company’s financial position,
statements of operations, or cash flows at this time.
NOTE 3
UNCERTAINTY
OF ABILITY TO CONTINUE AS A GOING CONCERN
The
Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has incurred significant losses and
has an accumulated deficit of $2,133,756 and its total liabilities
exceeds its assets by $1,029,994. The Company incurred net losses of
$22,254 and $55,790 for the six months ended September 30, 2010 and 2009,
respectively.
In view
of the matters described above, recoverability of a major portion of the
recorded asset amounts shown in the accompanying balance sheets is dependent
upon continued operations of the Company, which in turn is dependent upon the
Company’s ability to raise additional capital, obtain financing and to succeed
in its future operations. The financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset
amounts or amounts and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern.
Management
has taken the following steps to revise its operating and financial
requirements, which it believes are sufficient to provide the Company with the
ability to continue as a going concern. The Company is actively
pursuing additional funding and potential merger or acquisition candidates to
redirect the structure and management to new profitable activities. The Company
is also seeking strategic partners, which would enhance stockholders’
investment. Management believes that the above actions will allow the Company to
continue operations through the next fiscal year.
NOTE
4 NOTES
PAYABLE
|
September
30,
|
|
|
March
31,
|
|
|
2010
|
|
|
2010
|
|
|
|
|
|
|
|
|
$
|
27,000
|
|
|
$
|
27,000
|
|
Notes
Payable consists of five notes payable to various unrelated individuals. The
notes are due upon 90 days written notice from the individuals. The
notes are unsecured, with interest ranging from 6% to 12% payable
quarterly. The notes have been outstanding since
1990. Interest accrual has been suspended due to the uncertainty of
the obligation.
NOTE
5 RELATED
ENTITIES TRANSACTIONS
George
Morris is chief financial officer, vice president, the chairman of the Board of
directors of the Company and the controlling shareholder of the Company and its
related parties through his beneficial ownership of the following percentages of
the outstanding voting shares of the related parties:
Internet
Infinity, Inc. (The Company)
|
|
|
85.06
|
%
|
Morris
& Associates, Inc.
|
|
|
71.30
|
%
|
Electronic
Media Central, Corp.
|
|
|
82.87
|
%
|
Apple
Realty, Inc.
|
|
|
100.00
|
%
|
L&M
Media, Inc.
|
|
|
100.00
|
%
|
The
Company has notes payable to related parties on September 30, 2010 as
follows:
Anna Moras
(mother of George Morris), with interest at 6% per annum, unsecured and
due upon 90 days written notice. Interest expense for the years
ended March 31, 2010 and 2009 on this note are $2,100 and $1,934,
respectively.
|
|
$
|
14,652
|
|
Apple Realty,
Inc.
(related through a common controlling shareholder), secured by
assets of the Company, past due and payable upon
demand. Interest accrues at 6% per annum. This note is in
connection with consulting fees and office expenses
owed. Interest expense on this note for the years ended March
31, 2010 and 2009 are $30,218 and $21,264, respectively.
|
|
$
|
360,215
|
|
L&M Media,
Inc.
(related through a common controlling shareholder) – Accounts
payable for purchases, converted into a note during the three month period
ended September 30, 2004. The note is due on demand, unsecured and
interest accrues at 6% per annum. Interest expense on this note for the
years ended March 31, 2010 and 2009 are $3,159 and $2,908,
respectively.
|
|
$
|
36,533
|
|
|
|
|
|
|
Total
notes payable – related parties
|
|
$
|
411,400
|
|
|
|
|
|
2010
|
|
The
Company has a payable to officer as follows:
Unsecured
miscellaneous payable upon demand to George Morris, with interest at 6%
per annum, with monthly installments of $3,000 beginning June 30, 2000 and
paid as available. George Morris is the chairman of the Company. The
Company has not made any principal payments to George Morris and is in
default of this note.
|
Current
|
|
$
|
214,707
|
|
|
|
|
|
|
|
Note
payable – Officer
Unsecured
note payable upon demand to George Morris, with interest at 6% per annum.
The Company has not made any principle payments to George Morris and is in
default of this note
|
Current
|
|
|
63,433
|
|
|
|
|
|
|
|
Interest
payable – Officer
|
Current
|
|
|
61,059
|
|
|
|
|
|
|
|
|
|
|
$
|
339,199
|
|
The
Company has a payable to Morris Business Development Company and Morris &
Associates, Inc., two parties related through a common controlling shareholder,
amounting to $7,209 as of June 30, 2010. The amount is interest free,
unsecured and due on demand.
During
the six months ended September 30, 2010, the Company’s officers and directors
did not charge for their services. In the prior fiscal year ended March 31,
2010, such contributed services were recorded as capital contribution in the
amount of $5,499, which was determined based on the fair value of the services
provided.
NOTE
6 INCOME
TAXES
No
provision was made for federal income tax for the year ended March 31, 2010 and
2009, since the Company had significant net operating loss. The net operating
loss carryforwards may be used to reduce taxable income through the year 2028.
The availability of the Company’s net operating loss carryforwards are subject
to limitation if there is a 50% or more positive change in the ownership of the
Company’s stock. The provision for income taxes consists of the state minimum
tax imposed on corporations.
The net
operating loss carryforward for federal and state income tax purposes of
approximately
$1,437,000
as of September 30, 2010.
The
Company has recorded a 100% valuation allowance for the deferred tax asset due
to the uncertainty of its realization.
The
components of the net deferred tax asset are summarized below:
|
|
09/30/2010
|
|
Deferred
tax asset – net operating loss
|
|
$
|
574,672
|
|
Less
valuation allowance
|
|
|
(574,672
|
)
|
|
|
|
|
|
Net
deferred tax asset
|
|
$
|
-
|
|
The
following is a reconciliation of the provision for income taxes at the U.S.
federal income tax rate to the income taxes reflected in the Statement of
Operations:
|
|
March
31, 2010
|
|
|
March
31, 2009
|
|
Tax
expense (credit) at statutory rate-federal
|
|
|
-34
|
%
|
|
|
-34
|
%
|
State
tax expense net of federal tax
|
|
|
-6
|
%
|
|
|
-6
|
%
|
Changes
in valuation allowance
|
|
|
40
|
%
|
|
|
40
|
%
|
Tax
expense at actual rate
|
|
|
-
|
|
|
|
-
|
|
Income
tax expense consisted of the following:
|
|
9/30/2010
|
|
Current
tax expense:
|
|
|
|
Federal
|
|
$
|
-
|
|
State
|
|
|
800
|
|
Total
current
|
|
$
|
800
|
|
|
|
|
|
|
Deferred
tax credit:
|
|
|
|
|
Federal
|
|
$
|
23,905
|
|
State
|
|
|
4,218
|
|
Total
deferred
|
|
$
|
28,123
|
|
Less:
valuation allowance
|
|
|
(28,123
|
)
|
Net
deferred tax credit
|
|
|
-
|
|
|
|
|
|
|
Tax
expense
|
|
$
|
800
|
|
NOTE
7 STOCK
OPTIONS
The
Company’s 1996 stock option plan provides that incentive stock options and
nonqualified stock options to purchase common stock may be granted to directors,
officers, key employees, consultants, and subsidiaries with an exercise price of
up to 110% of market price at the date of grant. Generally, options
are exercisable one or two years from the date of grant and expire three to ten
years from the date of grant.
For the
six months ended September 30, 2010, the Company granted no
options. As at September 30, 2010 there are no options
outstanding.
NOTE
8 CAPITAL
During
the six months ended September 30, 2010, the Company did not issue any
shares.
As of
September 30, 2010 the Company had authorized 30,000,000 preferred shares of par
value $0.001, of which none were issued and outstanding. As of
September 30, 2010 the Company had authorized 100,000,000 shares of common stock
of par value $0.001, of which 28,718,780 shares were issued and
outstanding.
NOTE
9 SUBSEQUENT
EVENTS
Events
subsequent to September 30, 2010 have been evaluated through November 15, 2010,
the date these statements were available to be issued, to determine whether they
should be disclosed to keep the financial statements from being
misleading. Management found no subsequent events to be
disclosed
Item
2.
|
Management’s
Discussion and Analysis or Plan of
Operation
|
The
following discussion and analysis should be read in conjunction with the
financial statements and the accompanying notes thereto for the three-month
period ended June 30, 2009 and is qualified in its entirety by the foregoing and
by more detailed financial information appearing elsewhere. See “Item
1. Financial Statements.” The discussion includes
management’s expectations for the future.
Results
of Operations – Second Quarter of (“Q2”) Fiscal 2010 Compared to Second Quarter
(“Q2”) of Fiscal 2009
Sales
Internet
Infinity revenues for Q2 2010 were $0, as compared with revenues of $9,000 in Q2
2009. This inability to increase revenues is attributable to the
slowing economy and the lack of success in finding
acquisitions..
Cost
of Sales - Gross Margin
Our cost
of sales was $0 for Q2 2010, as compared to $1,800for Q2 2009 since there were
no Q2 sales.
Operating
Expenses
Operating
expenses for Q2 2010 decreased to $3,854 from $27,855 for Q2
2009. This decrease in operating expenses is primarily due to a
decrease in operating activity.
Net
Income (Loss)
The
company had a net loss of $3,854 from operations in Q2 2010, as compared with a
net loss of $20,655 from operations in Q2 2009. Overall, we had net
loss after taxes including interest expense of $3,854 for Q2 2010 compared to
$33,828 for Q2 of 2009.
Balance
Sheet Items
Our cash
position increased to $403 at September 30, 2010 (Q2 2010) from $50
at September 30, 2009 (Q2 2009).
Off-Balance
Sheet Arrangements
Our
company has not entered into any transaction, agreement or other contractual
arrangement with an entity unconsolidated with us under which we
have
·
|
an
obligation under a guarantee contract,
|
·
|
a
retained or contingent interest in assets transferred to the
unconsolidated entity or similar arrangement that serves as credit,
liquidity or market risk support to such entity for such
assets,
|
·
|
any
obligation, including a contingent obligation, under a contract that would
be accounted for as a derivative instrument, or
|
·
|
any
obligation, including a contingent obligation, arising out of a variable
interest in an unconsolidated entity that is held by us and material to us
where such entity provides financing, liquidity, market risk or credit
risk support to, or engages in leasing, hedging or research and
development services with us.
|
Item 4.
|
Controls and
Procedures
|
Evaluation of disclosure
controls and procedures
. The Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures as of the end of the period covered by this
report. Based upon that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Company's disclosure controls and
procedures are effective and are designed to provide reasonable assurances of
achieving their objectives. Further, the Company’s officers concluded
that its disclosure controls and procedures are also effective to ensure that
information required to be disclosed in the reports that it files or submits
under the Exchange Act is accumulated and communicated to its management,
including its chief executive officer and chief financial officer, to allow
timely decisions regarding required disclosure. There were no
significant changes in the Company's internal control over financial reporting
during the period covered by this report that have materially affected, or are
reasonably likely to materially affect our internal controls over financial
reporting.
PART
II - OTHER INFORMATION
|
Item
1.
|
Legal
Proceedings
|
We are
not, and none of our property is, a party to any pending legal proceedings, and
no such proceedings are known to be contemplated.
No
director, officer or affiliate of the company, and no owner of record or
beneficial owner of more than 5.0% of the securities of the company, or any
associate of any such director, officer or security holder is a party adverse to
the company or has a material interest adverse to the Company in reference to
any litigation.
The
following exhibits are filed, by incorporation by reference, as part of this
Form 10-Q:
|
2
|
Certificate
of Ownership and Merger of Morris & Associates, Inc., a
California corporation, into Internet Infinity, Inc., a Delaware
corporation*
|
|
2.1
|
Plan
of Merger (Internet Infinity - Delaware into Internet Infinity -
Nevada)***
|
|
2.2
|
State
of Delaware Certificate of Merger of Domestic Corporation into Foreign
Corporation which merges Internet Infinity, Inc., a Delaware corporation,
with and into Internet Infinity, Inc., a Nevada
corporation***
|
|
2.3
|
Articles
of Merger (Pursuant to NRS 92A.200) which merges Internet Infinity, Inc.,
a Delaware corporation, with Internet Infinity, Inc., a Nevada
corporation, with the Nevada corporation being the surviving
entity***
|
|
3
|
Articles
of Incorporation of Internet Infinity,
Inc.*
|
|
3.1
|
Amended
Certificate of Incorporation of Internet Infinity,
Inc.*
|
|
|
|
|
3.2
|
Bylaws
of Internet Infinity, Inc.*
|
|
3.3
|
Corporate
Charter and Articles of Incorporation of Internet Infinity, Inc., a Nevada
corporation***
|
|
3.4
|
Certificate
of Amendment to Articles of Incorporation of Internet Infinity, Inc., a
Nevada corporation++
|
|
10.1
|
Master
License and non-exclusive Distribution Agreement between Internet
Infinity, Inc. and Lord & Morris Productions,
Inc.*
|
|
10.2
|
Master
License and Exclusive Distribution Agreement between L&M Media, Inc.
and Internet Infinity, Inc.*
|
|
10.3
|
Master
License and Exclusive Distribution Agreement between
Hollywood Riviera Studios and Internet Infinity,
Inc.*
|
|
10.4
|
Fulfillment
Supply Agreement between Internet Infinity, Inc. and Ingram Book
Company**
|
|
|
|
|
14
|
Code
of Ethics for CEO and Senior Financial
Officers+
|
|
31.1
|
Certification
of Chief Executive Officer 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 Chief Financial Officer 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 Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
32.2
|
Certification
of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
*
Previously filed with Form 10-SB 10-13-99; Commission File No.
0-27633incorporated herein.
**
Previously filed with Amendment No. 2 to Form 10-SB 02-08-00; Commission FileNo.
0-27633 incorporated herein.
***
Previously filed with Form 8-K Current Report March 14, 2005, Commission File
No. 0-27633 incorporated herein.
+
Previously filed with Form 10-KSB; Commission File No. 0-27633 incorporated
herein.
++
Previously filed with Form 8-K Current Report February 17, 2006; Commission File
No. 0-27633 incorporated herein.
SIGNATURES
Pursuant
to the requirements of the Exchange Act of 1934, the Registrant has caused this
report to be signed on its behalf by the undersigned hereunto duly
authorized.
|
INTERNET
INFINITY, INC.
|
|
|
|
|
|
Dated: November
15, 2010
|
By:
|
/s/
George
Morris
|
|
|
|
George
Morris, Chief Executive Officer
|
|
|
|
|
|
17
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