FINDEX COM INC - Quarter Report: 2013 March (Form 10-Q)

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Nevada		88-0379462
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)
18151 Lafayette Avenue, Elkhorn, Nebraska		68022
(Address of principal executive offices)		(Zip Code)

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PART I - FINANCIAL INFORMATION:
Item 1.    Financial Statements:	F-1
Balance Sheets – March 31, 2013 (unaudited) and December 31, 2012	F-1
Statements of Operations (unaudited) for the three months ending March 31, 2013 and for the three months ending March 31, 2012	F-2
Statements of Cash Flows (unaudited) for the three months ending March 31, 2013 and for the three months ending March 31, 2012	F-3
Notes to Unaudited Financial Statements	F-4
Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations	1
Item 3.    Quantitative and Qualitative Disclosures About Market Risk	6
Item 4T.  Controls and Procedures	6
PART II - OTHER INFORMATION:	7
Item 1.    Legal Proceedings	7
Item 1A. Risk Factors	7
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds	7
Item 3.    Defaults Upon Senior Securities	7
Item 4.    (Removed and Reserved)	7
Item 5.    Other Information	7
Item 6.    Exhibits	7
Signatures	10

Findex.com, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
		March 31, 2013				December 31, 2012
		(Unaudited)				(Audited)
Assets
Current assets:
Cash and cash equivalents		$	246			$	8,751
Accounts receivable, trade, net			683				920
Receivable, in escrow, net			34,336				36,957
Inventories, net			2,570				2,578
Other current assets			3,712				2,537
Total current assets			41,548				51,743
Property and equipment, net			629				868
Intangible assets, net			49,500				71,169
Total assets		$	91,676			$	123,780
Liabilities and stockholders' equity (deficit)
Current liabilities:
Current portion of term debt		$	28,783			$	28,783
Accounts payable, trade			132,053				110,982
Accounts payable, related party			24,505				15,062
Accrued royalties			48,996				48,955
Accrued payroll			50,680				27,328
Other current liabilities			27,921				21,207
Other current liabilities from discontinued operations			114,368				114,368
Total current liabilities			427,306				366,685
Long-term debt, net			---				---
Deferred income taxes, net			---				---
Commitments and contingencies (Note 9)
Stockholders' equity (deficit):
Preferred stock, $.001 par value
5,000,000 shares authorized
-0- and -0- shares issued and outstanding, respectively
Common stock, $.001 par value
120,000,000 shares authorized,
103,635,060 and 103,635,060shares issued and outstanding, respectively			103,635				103,635
Paid-in capital			8,217,335				8,217,335
Retained (deficit)			(8,656,600	)			(8,563,875	)
Total stockholders' equity (deficit)			(335,630	)			(242,905	)
Total liabilities and stockholders' equity (deficit)		$	91,676			$	123,780
See accompanying notes.

Findex.com, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
		Three Months Ended
		March 31,
		2013				2012
Revenues, net of reserves and allowances		$	5,012			$	16,955
Cost of sales			29				1,365
Gross profit			4,983				15,590
Operating expenses:
Sales and marketing			3,461				840
General and administrative			75,977				141,430
Impairment expense			17,150				18,781
Total operating expenses			96,588				161,051
Loss from operations			(91,605	)			(145,461	)
Other income (expenses), net			(1,122	)			(829	)
Gain on debt settlement			---				13,814
Loss from continuing operations before income taxes			(92,727	)			(132,476	)
Income tax benefit			---				---
Loss from continuing operations		$	(92,727	)		$	(132,476	)
Discontinued operations (Note 12):
Income from operations of discontinued component			---				3,853
Income tax (provision)			---				---
Income from discontinued operations, net of taxes			---				3,853
Net loss		$	(92,727	)		$	(128,623	)
Net earnings (loss) per share - Basic & Diluted:
Net loss per share from continuing operations		$	0.00			$	0.00
Net loss per share from discontinued operations		$	0.00			$	0.00
Net loss per share		$	0.00			$	0.00
Weighted average shares outstanding:
Weighted average shares used in computing basic and diluted income (loss) per share			103,635,060				77,993,935
See accompanying notes.

Findex.com, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,		2013				2012
Cash flows from operating activities:
Cash received from customers		$	7,871			$	34,659
Cash paid to suppliers and employees			(16,070	)			(101,761	)
Other operating activities, net			(306	)			(122	)
Net cash (used) by operating activities			(8,505	)			(67,224	)
Cash flows from investing activities:
Other investing activities, net			---				---
Net cash provided by investing activities			---				---
Cash flows from financing activities:
Payments made on term debt			---				(4,405	)
Net cash (used) by financing activities			---				(4,405	)
Net (decrease) in cash and cash equivalents			(8,505	)			(71,629	)
Cash and cash equivalents, beginning of period			8,751				161,629
Cash and cash equivalents, end of period		$	246			$	90,000
Reconciliation of net loss to cash flows from continuing and discontinued operating activities:
Net loss		$	(92,727	)		$	(128,623	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation & amortization			4,757				5,459
(Gain) on debt settlement			---				(17,667	)
Loss on impairment expense			17,150				18,781
Change in assets and liabilities:
Decrease in accounts receivable			2,859				3,204
Decrease in inventories			8				620
(Increase) decrease in other current assets			(1,176	)			4,849
Increase (decrease) in accrued royalties			41				(672	)
Increase in accounts payable			30,515				11,009
Increase in other liabilities			30,068				35,816
Net cash (used) provided by operating activities		$	(8,505	)		$	(67,224	)
See accompanying notes.

	▪	planning the website,
	▪	developing the applications and infrastructure until technological feasibility is established,
	▪	developing graphics such as borders, background and text colors, fonts, frames, and buttons, and
	▪	operating the site such as training, administration and maintenance.

	▪	obtain and register an Internet domain name,
	▪	develop or acquire software tools necessary for the development work,
	▪	develop or acquire software necessary for general website operations,
	▪	develop or acquire code for web applications,
	▪	develop or acquire (and customize) database software and software to integrate applications such as corporate databases and accounting systems into web applications,
	▪	develop HTML web pages or templates,
	▪	install developed applications on the web server,
	▪	create initial hypertext links to other websites or other locations within the website, and
	▪	test the website applications.

For the Three Months Ended March 31,		2013				2012
Net loss from continuing operations		$	(92,727	)		$	(132,476	)
Preferred stock dividends			---				---
Net loss available to common shareholders		$	(92,727	)		$	(132,476	)
Net income from discontinued operations		$	---			$	3,853
Preferred stock dividends			---				---
Net income available to common shareholders		$	---			$	3,853
Basic weighted average shares outstanding			103,635,060				77,993,935
Dilutive effect of:
Stock options			---				---
Warrants			---				---
Diluted weighted average shares outstanding			103,635,060				77,993,935

Raw materials		$	2,262
Finished goods			2,583
Less reserve for obsolete inventory			(2,275	)
Inventories		$	2,570

Balance December 31, 2012		$	400
Bad debts provision (included in Sales and marketing expenses)			---
Accounts written off			---
Collection of accounts previously written off			---
Balance March 31, 2013		$	400

Balance December 31, 2012		$	2,275
Provision for obsolete inventory			---
Obsolete inventory written off			---
Reserve for obsolete inventory from discontinued operations			---
Balance March 31, 2013		$	2,275

Balance December 31, 2012		$	200
Return provision – sales			---
Return provision – cost of sales			---
Returns processed			---
Balance March 31, 2013		$	200

Unsecured term note payable to a former shareholder due January 2012, plus interest at 5% APR. Interest on overdue principal accruing at 10% APR.		$	28,783
Current portion of debt		$	28,783

		Chief Executive Officer
Base Annual Salary		$	75,000

		Accrued Base Salary
Included in Accrued Payroll at March 31, 2013		$	40,369

Other current liabilities from discontinued operations:		March 31, 2013				December 31, 2012
Accrued royalties		$	114,368			$	114,368
Other current liabilities from discontinued operations		$	114,368			$	114,368

Three Months Ended March 31,			2013				2012
Gross revenues		$	---			$	---
Less estimated sales returns and allowances			---				---
Net revenues			---				---
Cost of sales			---				---
Gross profit			---				---
Operating expenses:
Advertising and direct marketing			---				---
Sales and marketing wages			---				---
Total sales and marketing			---				---
Other general and administrative costs			---				---
Total general and administrative			---				---
Income from operations of discontinued component			---				---
Gain on debt settlement			---				3,853
Income tax (provision)			---				---
Income from discontinued operations, net of taxes		$	---			$	3,853

 

 

Statements of Continuing Operations for Quarters Ending March 31		2013				2012				Change
Net revenues		$	5,012			$	16,955			$	(11,943	)
Cost of sales			(29	)			(1,365	)			1,336
Gross profit		$	4,983			$	15,590			$	(10,607	)
Sales, marketing and general and administrative expenses			(79,438	)			(142,270	)			62,832
Impairment expense			(17,150	)			(18,781	)			1,631
Total operating expenses		$	(96,588	)		$	(161,051	)		$	64,463
Loss from operations		$	(91,605	)		$	(145,461	)		$	53,856
Other income (expenses), net			(1,122	)			(829	)			(293	)
Gain on debt settlement			---				13,814				(13,814	)
Loss before income taxes		$	(92,727	)		$	(132,476	)		$	39,749
Income tax (provision)			---				---				---
Net loss from continuing operations		$	(92,727	)		$	(132,476	)		$	39,749

	▪	a decrease in retail sales for our Greek and Hebrew Tutor software products as well as a decrease in sales for our FormTool® product line;
	▪	a decrease in cost of sales due to the decrease in our direct costs and freight costs associated with the decrease in our Greek and Hebrew Tutor software product sales; a decrease in royalty expense attributable to the decrease in sales of the FormTool Pro product line;
	▪	a decrease in sales, marketing and general and administrative expenses resulting from our continued cost-cutting initiatives;
	▪	an impairment expense related to a valuation decrease in the intangible asset as a result of a sharp decline in revenue derived from the asset; and
	▪	a decrease in gain on debt settlements as we experienced fewer negotiations with vendors to accept a reduction in trade payables owed to them, and debt settlements with customers whom had a credit balance owed to them by us.

																		Change
Revenues for Continuing Operations for Quarters Ending March 31		2013				% to Sales				2012				% to Sales				$					%
Gross revenues		$	5,307				100	%		$	16,886				100	%		$	(11,579	)			69	%
Less estimated sales returns and allowances			(295	)			6	%			69				0	%			(364	)			528	%
Net revenues		$	5,012				94	%		$	16,955				100	%		$	(11,943	)			70	%

	▪	a portion of our sales in the FormTool® product line were to end users as a downloadable product during the three months ended March 31, 2013 as compared to slightly more overall retail product sales during the three months ended March 31, 2012; and
	▪	a portion of our sales in the FormTool® product line were generated from our licensing agreement with a certain publisher whom sells our FormTool® product line in which we do not incur any direct costs or freight costs.

 

																		Change
Sales, General and Administrative Costs for Continuing Operations for Quarters Ending March 31		2013				% to Sales				2012				% to Sales				$					%
Selected expenses:
Advertising and direct marketing		$	840				16	%		$	840				5	%		$	---				0	%
Bad debt provision			2,621				49	%			---				0	%			2,621				0	%
Total sales and marketing		$	3,461				65	%		$	840				5	%		$	2,621				312	%
Personnel costs		$	24,938				470	%		$	61,508				364	%		$	(36,570	)			59	%
Amortization and depreciation			4,757				90	%			5,458				32	%			(701	)			13	%
Accounting			15,000				283	%			15,875				94	%			(875	)			6	%
Legal			16,433				310	%			27,643				164	%			(11,210	)			41	%
Directors fees			6,000				113	%			15,000				89	%			(9,000	)			60	%
Other general and administrative costs			8,849				167	%			15,946				94	%			(7,097	)			45	%
Total general and administrative		$	75,977				1432	%		$	141,430				838	%		$	(65,453	)			46	%
Total sales, marketing, general and administrative		$	79,438				1497	%		$	142,270				843	%		$	(62,832	)			44	%

	▪	an increase in our bad debt provision, as comparatively, we were absent of a provision for the three months ended March 31, 2012 due to the overall change of character of our receivables as a result of the sale of the QuickVerse® product line;
	▪	a decrease in personnel expenses
	▪	a decrease in legal costs as we experienced fewer legal costs as compared to the legal costs incurred during the three months ended March 31, 2012, of which were attributed to the relatively dramatic changes to our business and operations as a result of the QuickVerse® product line sale;
	▪	a decrease in our directors fees due to the resignation of two outside directors during December 2012; and
	▪	an overall decrease in other general and administrative costs resulting from our continued cost-cutting initiatives.

Working Capital		March 31, 2013				December 31, 2012
Current assets		$	41,548			$	51,743
Current liabilities		$	427,306			$	366,685
Retained deficit		$	8,656,600			$	8,563,875

Cash Flows for Three Months Ending March 31		2013				2012				Change				%
Cash flows (used) by operating activities		$	(8,505	)		$	(67,224	)		$	58,719				87	%
Cash flows provided by investing activities		$	---			$	---			$	---				0	%
Cash flows (used) by financing activities		$	---			$	(4,405	)		$	4,405				100	%

		FINDEX.COM, INC.
Date: May 20, 2013	By	/s/ Steven Malone
		Steven Malone
		President
		Chief Executive Officer (Principal Executive Officer)
		Chief Financial Officer (Principal Accounting Officer)