FINDEX COM INC - Quarter Report: 2014 June (Form 10-Q)

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Nevada		88-0379462
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)
1313 South Killian Drive, Lake Park, Florida		33403
(Address of principal executive offices)		(Zip Code)

 

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PART I - FINANCIAL INFORMATION:
Item 1.    Financial Statements:	F-1
Balance Sheets – June 30, 2014 (unaudited) and December 31, 2013	F-1
Statements of Operations (unaudited) for the three and six months ended June 30, 2014 and for the three and six months ended June 30, 2013	F-2
Statements of Cash Flows (unaudited) for the six months ended June 30, 2014 and for the six months ended June 30, 2013	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	7
Item 4T.  Controls and Procedures	7
PART II - OTHER INFORMATION:	8
Item 1.    Legal Proceedings	8
Item 1A. Risk Factors	8
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds	8
Item 3.    Defaults Upon Senior Securities	8
Item 4.     Mine Safety Disclosures	8
Item 5.    Other Information	8
Item 6.    Exhibits	8
Signatures	11

Findex.com, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
		June 30, 2014				December 31, 2013
		(Unaudited)				(Audited)
Assets
Current assets:
Cash and cash equivalents		$	574			$	125
Accounts receivable, trade, net			---				201
Inventories, net			469				493
Other current assets			2,809				742
Total current assets			3,852				1,561
Property and equipment, net			---				45
Intangible assets, net			3,122				9,900
Total assets		$	6,974			$	11,506
Liabilities and stockholders’ deficit
Current liabilities:
Note payable		$	38,783			$	28,783
Accounts payable, trade			193,191				148,160
Accounts payable, related party			99,222				52,879
Accrued royalties			52,164				50,804
Accrued payroll			191,893				122,560
Other current liabilities			62,757				48,497
Other current liabilities from discontinued operations			114,368				114,368
Total current liabilities		$	752,378			$	566,051
Commitments and contingencies
Stockholders’ 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,
109,635,060 and 103,635,060 shares issued and outstanding, respectively			109,635				103,635
Paid-in capital			8,241,335				8,217,335
Accumulated deficit			(9,096,374	)			(8,875,515	)
Total stockholders’ deficit			(745,404	)			(554,545	)
Total liabilities and stockholders’ deficit		$	6,974			$	11,506
See accompanying notes.

Findex.com, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2014				2013				2014				2013
Revenues, net of reserves and allowances		$	4,756			$	3,552			$	7,526			$	8,564
Cost of sales			1,193				2,225				1,317				2,254
Gross profit			3,563				1,327				6,209				6,310
Operating expenses:
Sales and marketing			2				619				102				1,458
General and administrative			140,016				74,059				221,522				150,036
Bad debt expense			---				31,714				---				34,336
Impairment expense			---				16,411				---				33,561
Total operating expenses			140,018				122,803				221,624				219,391
Loss from operations			(136,455	)			(121,476	)			(215,415	)			(213,081	)
Other expenses, net			(2,669	)			(1,242	)			(5,444	)			(2,364	)
Loss before income taxes			(139,124	)			(122,718	)			(220,859	)			(215,445	)
Income taxes			---				---				---				---
Net loss		$	(139,124	)		$	(122,718	)		$	(220,859	)		$	(215,445	)
Net loss per share - Basic & Diluted:
Net loss per share		$	0.00			$	0.00			$	0.00			$	0.00
Weighted average shares outstanding:
Weighted average shares used in computing basic and diluted loss per share			107,591,104				103,635,060				105,624,010				103,635,060
See accompanying notes.

Findex.com, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30,				2014				2013
Cash flows from operating activities:
Cash received from customers			$	7,780			$	7,409
Cash paid to suppliers and employees				(44,150	)			(15,234	)
Other operating activities, net				(3,181	)			(710	)
Net cash used by operating activities				(39,551	)			(8,535	)
Cash flows from financing activities:
Proceeds from note payable, net				10,000				---
Proceeds from sale of common stock				30,000				---
Net cash provided by financing activities				40,000				---
Net increase (decrease) in cash and cash equivalents				449				(8,535	)
Cash and cash equivalents, beginning of period				125				8,751
Cash and cash equivalents, end of period				$574			$	$216
Reconciliation of net loss to cash flows from continuing and discontinued operating activities:
Net loss			$	(220,859	)		$	(215,445	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation & amortization				6,823				8,385
Bad debts provision				---				34,336
Loss on impairment expense				---				33,561
Change in assets and liabilities:
Decrease (increase) in accounts receivable				201				(1,155	)
Decrease in inventories				24				2,078
Increase in other current assets				(2,066	)			(1,370	)
Increase in accrued royalties				1,359				199
Increase in accounts payable				91,374				70,255
Increase in other liabilities				83,593				60,621
Net cash used by operating activities			$	(39,551	)		$	(8,535	)
Supplemental cash flow information:
Cash paid for interest			$	---			$	---
Cash paid for income taxes			$	---			$	---
See accompanying notes.

Raw materials		$	686
Finished goods			611
Less reserve for obsolete inventory			(828	)
Inventories		$	469

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
Secured term note payable to a current shareholder due September 10, 2014, plus interest at 14% APR.			10,000
Total		$	38,783

		Chief Executive Officer
Base Annual Salary		$	150,000

		Accrued Base Salary
Included in Accrued Payroll at June 30, 2014		$	161,475

Other current liabilities from discontinued operations:		June 30, 2014				December 31, 2013
Accrued royalties		$	114,368			$	114,368
Other current liabilities from discontinued operations		$	114,368			$	114,368

Date of Issuance	Class of Security Issued	Subscriber Category		Number of Shares Issued				Consideration Value (1)
7/29/2014	Series MX Preferred	Outside Director (2)			1,875			$	30,000
7/29/2014	Series MX Preferred	Controller (3)			782			$	12,500
7/29/2014	Series MX Preferred	Executive Officer (3)			3,125			$	50,000
7/29/2014	Series MX Preferred	Corporate Counsel (4)			1,563			$	25,000
		Total Shares			7,345
(1) Calculated in each case on the basis of each share of Series MX Convertible Preferred Stock carrying a value of $16.00 per share, which was arrived at on the basis of a value attributable to the Company’s common stock of $.0064 per share, which was the publicly quoted closing price of the Company’s common stock on the OTCQB on July 29, 2014.
(2) Shares to be issued in lieu of cash for partial director’s fees accrued and unpaid from October 2012 through March 2014.
(3) Shares to be issued in lieu of cash for partial payroll accrued and unpaid from October 2012 through March 2014.
(4) Shares to be issued in lieu of cash for certain legal fees accrued from January 2014 through July 2014.

Statements of Continuing Operations for Three Months Ending June 30,		2014				2013				Change
Net revenues		$	4,756			$	3,552			$	1,204
Cost of sales			(1,193	)			(2,225	)			1,032
Gross profit		$	3,563			$	1,327			$	2,236
Sales, marketing and general and administrative expenses			(140,018	)			(74,678	)			(65,340	)
Bad debt expense			---				(31,714	)			31,714
Impairment expense			---				(16,411	)			16,411
Total operating expenses		$	(140,018	)		$	(122,803	)		$	(17,215	)
Loss from operations		$	(136,455	)		$	(121,476	)		$	(14,979	)
Other income (expenses), net			(2,669	)			(1,242	)			(1,427	)
Loss before income taxes		$	(139,124	)		$	(122,718	)		$	(16,406	)
Income tax (provision)			---				---				---
Net loss from continuing operations		$	(139,124	)		$	(122,718	)		$	(16,406	)

Statements of Continuing Operations for Six Months Ending June 30,		2014				2013				Change
Net revenues		$	7,526			$	8,564			$	(1,038	)
Cost of sales			(1,317	)			(2,254	)			937
Gross profit		$	6,209			$	6,310			$	(101	)
Sales, marketing and general and administrative expenses			(221,624	)			(151,494	)			(70,130	)
Bad debt expense			---				(34,336	)			34,336
Impairment expense			---				(33,561	)			33,561
Total operating expenses		$	(221,624	)		$	(219,391	)		$	(2,233	)
Loss from operations		$	(215,415	)		$	(213,081	)		$	(2,334	)
Other income (expenses), net			(5,444	)			(2,364	)			(3,080	)
Loss before income taxes		$	(220,859	)		$	(215,445	)		$	(5,414	)
Income tax (provision)			---				---				---
Net loss from continuing operations		$	(220,859	)		$	(215,445	)		$	(5,414	)

	▪	an increase in sales, marketing and general and administrative expenses resulting from an increase in travel and personnel expenses as we pursued the Merger Agreement with EcoSmart;
	▪	a bad debt expense for the three and six months ended June 30, 2013 due to multiple direct attempts by us to the principals of WORDsearch to recover the remaining escrow balance of the $975,000 Software Product Line Purchase Agreement have gone unanswered by the principals of WORDsearch;
	▪	an impairment expense for the three and six months ended June 30, 2013 related to a valuation decrease in the FormTool® intangible asset as a result of a sharp decline in revenue derived from the asset; and
	▪	an increase in interest expense related to the decrease in overall available cash to pay certain vendors.

																		Change
Revenues for Continuing Operations for Three Months Ending June 30,		2014				% to Sales				2013				% to Sales				$					%
Gross revenues		$	4,821				63	%		$	3,552				40	%		$	1,269				36	%
Less estimated sales returns and allowances			(65	)			1	%			---				0	%			(65	)			0	%
Net revenues		$	4,756				62	%		$	3,552				40	%		$	1,204				34	%

																		Change
Revenues for Continuing Operations for Six Months Ending June 30,		2014				% to Sales				2013				% to Sales				$					%
Gross revenues		$	7,656				100	%		$	8,859				100	%		$	(1,203	)			14	%
Less estimated sales returns and allowances			(130	)			2	%			(295	)			3	%			165				56	%
Net revenues		$	7,526				98	%		$	8,564				97	%		$	(1,038	)			12	%

																Change
Sales, General and Administrative Costs for Continuing Operations for Three Months Ending June 30,		2014			% to Sales				2013			% to Sales				$				%
Selected expenses:
Advertising and direct marketing		$	2			0	%		$	619			7	%		$	(617	)		100	%
Total sales and marketing		$	2			0	%		$	619			7	%		$	(617	)		100	%
Personnel costs		$	47,690			623	%		$	25,303			286	%		$	22,387			88	%
Amortization and depreciation			3,407			45	%			3,628			41	%			(221	)		6	%
Accounting			21,339			279	%			27,231			307	%			(5,892	)		22	%
Legal			45,500			594	%			5,000			56	%			40,500			810	%
Directors fees			6,000			78	%			6,000			68	%			---			0	%
Travel & entertainment			8,245			108	%			1,300			15	%			6,945			534	%
Other general and administrative costs			7,835			102	%			5,597			63	%			2,238			40	%
Total general and administrative		$	140,016			1829	%		$	74,059			836	%		$	65,957			89	%
Total sales, marketing, general and administrative		$	140,018			1829	%		$	74,678			843	%		$	65,340			87	%

																Change
Sales, General and Administrative Costs for Continuing Operations for Six Months Ending June 30,		2014			% to Sales				2013			% to Sales				$				%
Selected expenses:
Advertising and direct marketing		$	102			1	%		$	1,458			16	%		$	(1,356	)		93	%
Total sales and marketing		$	102			1	%		$	1,458			16	%		$	(1,356	)		93	%
Personnel costs		$	72,106			942	%		$	50,241			567	%		$	21,865			44	%
Amortization and depreciation			6,823			89	%			8,385			95	%			(1,562	)		19	%
Accounting			41,339			540	%			42,231			477	%			(892	)		2	%
Legal			60,500			790	%			21,433			242	%			39,067			182	%
Directors fees			12,000			157	%			12,000			135	%			---			0	%
Travel & entertainment			13,654			178	%			1,300			15	%			12,354			950	%
Other general and administrative costs			15,100			197	%			14,446			163	%			654			5	%
Total general and administrative		$	221,522			2893	%		$	150,036			1694	%		$	71,486			48	%
Total sales, marketing, general and administrative		$	221,624			2895	%		$	151,494			1710	%		$	70,130			46	%

	▪	a decrease in total sales and marketing for the three and six months ended June 30, 2014 as comparatively during the three and six months ended June 30, 2013 we increased our provision for bad debts due to the change of character of our then receivables;
	▪	an increase in personnel costs as our executive team worked on pursuing the Merger Agreement with EcoSmart;
	▪	a decrease in amortization and depreciation due to the age of those items being amortized and depreciated;
	▪	an increase in legal expense due to pursing the Merger Agreement with EcoSmart; and
	▪	an increase in our travel and entertainment expenses due to the Merger Agreement with EcoSmart.

Working Capital		June 30, 2014				December 31, 2013
Current assets		$	3,852			$	1,561
Current liabilities		$	752,378			$	566,051
Accumulated deficit		$	9,096,374			$	8,875,515

Cash Flows for Six Months Ending June 30,		2014				2013				Change				%
Cash flows used in operating activities		$	(39,551	)		$	(8,535	)		$	(31,016	)			363	%
Cash flows provided by investing activities		$	---			$	---			$	---				0	%
Cash flows provided by financing activities		$	40,000			$	---			$	40,000				0	%

 

 

 

 

No.	Description of Exhibit
2.1	Share Exchange Agreement between Findex.com, Inc. and the stockholders of Reagan Holdings, Inc. dated March 7, 2000, incorporated by reference to Exhibit 2.1 on Form 8-K filed March 15, 2000.
2.2	Agreement and Plan of Merger by and among Findex.com, Inc., EcoSmart Acquisition Corp. EcoSmart Surface & Coating Technologies, Inc., and The Renewable Corp. dated July 23, 2014, incorporated by reference to Exhibit 2.1 on Form 8-K filed July 29, 2014.
3(i)(1)	Restated Articles of Incorporation of Findex.com, Inc. dated June 1999 incorporated by reference to Exhibit 3.1 on Form 8-K filed March 15, 2000.
3(i)(2)	Amendment to Articles of Incorporation of Findex.com, Inc. dated November 10, 2004 incorporated by reference to Exhibit 3.1(ii) on Form 10-QSB filed November 10, 2004.
3(ii)	Restated By-Laws of Findex.com, Inc., incorporated by reference to Exhibit 3.3 on Form 8-K filed March 15, 2000.

		FINDEX.COM, INC.
Date: August 19, 2014	By	/s/ Steven Malone
		Steven Malone
		President
		Chief Executive Officer (Principal Executive Officer)
		Chief Financial Officer (Principal Accounting Officer)