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

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PART I - FINANCIAL INFORMATION:
Item 1.    Financial Statements:	F-1
Balance Sheets – March 31, 2014 (unaudited) and December 31, 2013	F-1
Statements of Operations (unaudited) for the three months ending March 31, 2014 and for the three months ending March 31, 2013	F-2
Statements of Cash Flows (unaudited) for the three months ending March 31, 2014 and for the three months ending March 31, 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	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, 2014				December 31, 2013
		(Unaudited)				(Audited)
Assets
Current assets:
Cash and cash equivalents		$	1,229			$	125
Accounts receivable, trade, net			670				201
Inventories, net			474				493
Other current assets			3,222				742
Total current assets			5,595				1,561
Property and equipment, net			18				45
Intangible assets, net			6,511				9,900
Total assets		$	12,124			$	11,506
Liabilities and stockholders' equity (deficit)
Current liabilities:
Current portion of term debt		$	38,783			$	28,783
Accounts payable, trade			149,584				148,160
Accounts payable, related party			93,687				52,879
Accrued royalties			50,960				50,804
Accrued payroll			145,546				122,560
Other current liabilities			55,476				48,497
Other current liabilities from discontinued operations			114,368				114,368
Total current liabilities			648,404				566,051
Long-term debt, net			---				---
Deferred income taxes, net			---				---
Commitments and contingencies (Note 7)
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 103,635,060 shares issued and outstanding, respectively			103,635				103,635
Paid-in capital			8,217,335				8,217,335
Retained (deficit)			(8,957,250	)			(8,875,515	)
Total stockholders' equity (deficit)			(636,280	)			(554,545	)
Total liabilities and stockholders' equity (deficit)		$	12,124			$	11,506
See accompanying notes.

Findex.com, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
		Three Months Ended
		March 31,
		2014				2013
Revenues, net of reserves and allowances		$	2,770			$	5,012
Cost of sales			124				29
Gross profit			2,646				4,983
Operating expenses:
Sales and marketing			100				3,461
General and administrative			81,506				75,977
Impairment expense			---				17,150
Total operating expenses			81,606				96,588
Loss from operations			(78,960	)			(91,605	)
Other income (expenses), net			(2,775	)			(1,122	)
Loss from continuing operations before income taxes			(81,735	)			(92,727	)
Income tax benefit			---				---
Loss from continuing operations		$	(81,735	)		$	(92,727	)
Discontinued operations (Note 10):
Income (loss) from operations of discontinued component			---				---
Income tax (provision)			---				---
Income (loss) from discontinued operations, net of taxes			---				---
Net loss		$	(81,735	)		$	(92,727	)
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				103,635,060
See accompanying notes.

Findex.com, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,		2014				2013
Cash flows from operating activities:
Cash received from customers		$	2,301			$	7,871
Cash paid to suppliers and employees			(9,403	)			(16,070	)
Other operating activities, net			(1,794	)			(306	)
Net cash (used) by operating activities			(8,896	)			(8,505	)
Cash flows from investing activities:
Other investing activities, net			---				---
Net cash provided by investing activities			---				---
Cash flows from financing activities:
Proceeds from note payable, net			10,000				---
Net cash provided by financing activities			10,000				---
Net increase (decrease) in cash and cash equivalents			1,104				(8,505	)
Cash and cash equivalents, beginning of period			125				8,751
Cash and cash equivalents, end of period		$	1,229			$	246
Reconciliation of net loss to cash flows from continuing and discontinued operating activities:
Net loss		$	(81,735	)		$	(92,727	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation & amortization			3,416				4,757
Loss on impairment expense			---				17,150
Change in assets and liabilities:
(Increase) decrease in accounts receivable			(469	)			2,859
Decrease in inventories			19				8
(Increase) in other current assets			(2,480	)			(1,176	)
Increase in accrued royalties			156				41
Increase in accounts payable			42,233				30,515
Increase in other liabilities			29,964				30,068
Net cash (used) provided by operating activities		$	(8,896	)		$	(8,505	)
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,		2014				2013
Net loss from continuing operations		$	(81,735	)		$	(92,727	)
Preferred stock dividends			---				---
Net loss available to common shareholders		$	(81,735	)		$	(92,727	)
Net income from discontinued operations		$	---			$	---
Preferred stock dividends			---				---
Net income available to common shareholders		$	---			$	---
Basic weighted average shares outstanding			103,635,060				103,635,060
Dilutive effect of:
Stock options			---				---
Warrants			---				---
Diluted weighted average shares outstanding			103,635,060				103,635,060

Raw materials		$	686
Finished goods			616
Less reserve for obsolete inventory			(828	)
Inventories		$	474

Balance December 31, 2013		$	400
Bad debts provision			---
Accounts written off			---
Collection of accounts previously written off			---
Balance March 31, 2014		$	400

Balance December 31, 2013		$	828
Provision for obsolete inventory			---
Obsolete inventory written off			---
Reserve for obsolete inventory from discontinued operations			---
Balance March 31, 2014		$	828

Balance December 31, 2013		$	200
Return provision – sales			---
Return provision – cost of sales			---
Returns processed			---
Balance March 31, 2014		$	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
Secured term note payable to a current shareholder due September 10, 2014, plus interest at 14% APR.			10,000
Current portion of debt		$	38,783

		Chief Executive Officer
Base Annual Salary		$	75,000

		Accrued Base Salary
Included in Accrued Payroll at March 31, 2014		$	121,106

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statements of Continuing Operations for Three Months Ending March 31,		2014				2013				Change
Net revenues		$	2,770			$	5,012			$	(2,242	)
Cost of sales			(124	)			(29	)			(95	)
Gross profit		$	2,646			$	4,983			$	(2,337	)
Sales, marketing and general and administrative expenses			(81,606	)			(79,438	)			(2,168	)
Impairment expense			---				(17,150	)			17,150
Total operating expenses		$	(81,606	)		$	(96,588	)		$	14,982
Loss from operations		$	(78,960	)		$	(91,605	)		$	12,645
Other income (expenses), net			(2,775	)			(1,122	)			(1,653	)
Loss before income taxes		$	(81,735	)		$	(92,727	)		$	10,992
Income tax (provision)			---				---				---
Net loss from continuing operations		$	(81,735	)		$	(92,727	)		$	10,992

	▪	a decrease in sales for our FormTool® product line;
	▪	an increase in sales, marketing and general and administrative expenses resulting from an increase in travel expenses as we pursue the pending merger with EcoSmart;
	▪	an impairment expense for the three months ended March 31, 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 March 31,		2014				% to Sales				2013				% to Sales				$					%
Gross revenues		$	2,835				100	%		$	5,307				100	%		$	(2,472	)			47	%
Less estimated sales returns and allowances			(65	)			2	%			(295	)			6	%			230				78	%
Net revenues		$	2,770				98	%		$	5,012				94	%		$	(2,242	)			45	%

																		Change
Sales, General and Administrative Costs for Continuing Operations for Three Months Ending March 31,		2014				% to Sales				2013				% to Sales				$					%
Selected expenses:
Advertising and direct marketing		$	100				4	%		$	840				16	%		$	(740	)			88	%
Bad debt expense			---				0	%			2,621				49	%			(2,621	)			100	%
Total sales and marketing		$	100				4	%		$	3,461				65	%		$	(3,361	)			97	%
Personnel costs		$	24,416				861	%		$	24,938				470	%		$	(522	)			2	%
Amortization and depreciation			3,416				120	%			4,757				90	%			(1,341	)			28	%
Accounting			20,000				705	%			15,000				283	%			5,000				33	%
Legal			15,000				529	%			16,433				310	%			(1,433	)			9	%
Travel and entertainment			5,409				191	%			0				0	%			5,409				0	%
Other general and administrative costs			13,265				468	%			14,849				280	%			(1,584	)			11	%
Total general and administrative		$	81,506				2875	%		$	75,977				1432	%		$	5,529				7	%
Total sales, marketing, general and administrative		$	81,606				2879	%		$	79,438				1497	%		$	2,168				3	%

	▪	a decrease in total sales and marketing for the three months ended March 31, 2014 as comparatively during the three months ended March 31, 2013 we increased our provision for bad debts due to the change of character of our receivables;
	▪	a decrease in amortization and depreciation due to age of those items being amortized and depreciated;
		an increase in accounting costs due to a timing difference related to our ongoing accounting needs;
	▪	an increase in our travel and entertainment expenses as we pursue the pending merger with EcoSmart; and
	▪	an overall decrease in other general and administrative costs resulting from our continued cost-cutting initiatives.

Working Capital		March 31, 2014				December 31, 2013
Current assets		$	5,595			$	1,561
Current liabilities		$	648,404			$	566,051
Retained deficit		$	8,957,250			$	8,875,515

Cash Flows for Three Months Ending March 31,		2014				2013				Change				%
Cash flows (used) by operating activities		$	(8,896	)		$	(8,505	)		$	(391	)			5	%
Cash flows provided by investing activities		$	---			$	---			$	---				0	%
Cash flows provided by financing activities		$	10,000			$	---			$	10,000				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.
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.
10.1	Stock Incentive Plan of Findex.com, Inc. dated May 7, 1999, incorporated by reference to Exhibit 10.1 on Form 10-KSB/A filed May 13, 2004.
10.2	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.

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