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UNIROYAL GLOBAL ENGINEERED PRODUCTS, INC. - Quarter Report: 2009 June (Form 10-Q)

m8129310q.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 2009

o
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from _________ to ________

Commission file numbers 000-50081
 
INVISA, INC.
(Name of registrant as specified in its charter)

Nevada
65-1005398
(State or Other Jurisdiction of Organization)
(IRS Employer Identification Number)

5425 N Washington Blvd, Suite B28, Sarasota, FL 34234
(Address of principal executive offices)

(941) 870-3950
(Issuer's telephone number)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 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 o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o  No o
 
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 o
Accelerated filer o
Non-accelerated filer o
Smaller reporting company x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   
Yes o No x
 
The number of shares outstanding of the registrant’s common stock, par value $0.001 per share, at June 30, 2009 was 34,781,081.
 


 
 

 
 
Invisa, Inc.
Form 10-Q
Table of Contents

Except for statements of historical fact, certain information contained herein constitutes “forward-looking statements,” including without limitation statements containing the words “believes,” “anticipates,” “intends,” “expects” and words of similar import, as well as all projections of future results. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results or achievements of Invisa, Inc. to be materially different from any future results or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the following: risks involved in implementing our business strategy; our ability to obtain financing on acceptable terms; our ability to manage growth; our dependence on key personnel; the ability to protect our intellectual property rights; risks of technological change, new technology, and new products; competition; and government regulation.
 
     
Page
Part I.
Financial Information
 
       
 
1
       
 
5
       
 
8
       
Part II.
Other Information
 
       
 
8
       
 
9
       
 
9
       
 
9
       
 
9
       
 
9
       
 
10
 
 
Part I.  Financial Information
 
Item 1. Financial Statements
Invisa, Inc.
(A Development Stage Enterprise)
Condensed Balance Sheets

   
December 31,
2008
   
June 30,
2009
 
         
(Unaudited)
 
Assets
           
Current assets:
           
Cash and cash equivalents
 
 $
----
   
 $
169
 
Accounts receivable, net of allowance
   
6,498
     
13,814
 
Inventories
   
35,115
     
15,308
 
Prepaids and other assets
   
5,366
     
4,129
 
Total current assets
   
46,979
     
33,420
 
                 
Furniture, fixtures and equipment, net of accumulated depreciation
   
2,800
     
2,595
 
Total assets
 
 $
49,779
   
 $
36,015
 
                 
Liabilities and Stockholders’ (Deficit)
               
Current liabilities:
               
Bank overdraft
 
 $
191
   
 $
----
 
Accounts payable, trade
   
118,410
     
102,512
 
Accrued expenses
   
30,377
     
60,032
 
Due to stockholders and officers
   
105,334
     
105,334
 
Notes payable
   
494,030
     
537,000
 
Preferred dividends payable
   
261,375
     
285,345
 
Total current liabilities
   
1,009,717
     
1,090,223
 
                 
Stockholders’ (Deficit):
               
Convertible Preferred Stock, 5,000,000 shares authorized ($0.001 par value):
               
Series A, 9,715 shares issued and outstanding
   
798,500
     
798,500
 
Series B, 9,000 shares issued and outstanding
   
900,000
     
900,000
 
Series C, 6,628 shares issued and outstanding
   
654,907
     
654,907
 
Common Stock, 95,000,000 shares authorized, $.001 par value, 34,781,081 shares issued and outstanding
   
34,781
     
34,781
 
Additional paid-in capital
   
31,975,470
     
31,995,398
 
Deficit accumulated during the development stage
   
(35,323,596
)
   
(35,437,794
)
Total stockholders’ (deficit)
   
(959,938
)
   
(1,054,208
)
Total liabilities and stockholders’ (deficit)
 
 $
   49,779
   
 $
36,015
 

See notes to condensed financial statements.
 
 
Invisa, Inc.
(A Development Stage Enterprise)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
 
   
 
   
 
    February 12,  
                 1997 (Date of  
                Inception)    
     Three months ended June 30,    
Six months ended June 30,
    Through June  
   
2008
   
2009
   
2008
   
2009
   
30,  2009
 
Net sales
  $ 26,870     $ 47,245     $ 55,976     $ 65,468     $ 1,582,082  
Other operating revenues
                              300,000  
      26,870       47,245       55,976       65,468       1,882,082  
Costs and other expenses:
                                       
    Cost of goods
    31,627       22,124       43,638       28,660       1,111,542  
    Research and development costs
                            3,471,292  
Selling, general and administrative  expenses
    73,934       49,410       136,959       119,953       16,117,415  
    Patent amortization
                            4,646,599  
    Impairment of Patent
                            9,064,867  
                                         
(Loss) from operations
    (78,691 )     (24,289 )     (124,621 )     (83,145 )     (32,529,633 )
                                         
Other income (expense):
                                       
Interest (expense) and other, net
    (23,959 )     (13,895 )     (25,240 )     (28,283 )     (1,059,705 )
Debt extinguishment gain
    63,893       21,228       398,337       21,228       758,682  
                                         
Income (Loss) before income tax
    (38,757 )     (16,956 )     248,476       (90,200 )     (32,830,656 )
Income tax
                             
                                         
Net Income (Loss)
    (38,757 )     (16,956 )     248,476       (90,200 )     (32,830,656 )
                                         
Non-cash constructive dividend related to Convertible Preferred Stock accretions
                            (2,296,640 )
Preferred stock dividends
    (22,500 )     (15,215 )     (45,000 )     (23,978 )     (310,498 )
Net Income (Loss) applicable to Common Stockholders
  $ (61,257 )   $ (32,171 )   $ 203,476     $ (114,178 )   $ (35,437,794 )
                                         
Net Loss per share applicable to Common Stockholders:
                                       
Basic and diluted
  $ (0.00 )   $ (0.00 )   $ 0.01     $ (0.00 )        
                                         
Weighted average Common Stock shares Outstanding :
                                       
Basic and diluted
    32,234,808       34,781,091       28,650,467       34,781,091          

See notes to condensed financial statements.
 
 
Invisa, Inc.
(A Development Stage Enterprise)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
 
   
Six Months Ended June
30,
   
February 12, 1997
(Date of Inception)
Through June 30,
 
   
2008
   
2009
   
2009
 
Cash flows from operating activities:
                 
Net Income (loss)
 
$
248,476
   
$
(90,200)
   
$
(32,830,536)
 
Adjustments to reconcile net income (loss) to net cash (used in) operating activities:
                       
Patent impairment
   
----
     
----
     
9,064,867
 
Depreciation and amortization
   
205
     
205
     
5,204,162
 
Modification of warrant                
   
----
     
----
     
60,000
 
Common Stock and options issued for services
   
----
     
----
     
3,028,164
 
Share-based compensation and pro forma officer compensation
   
26,448
     
18,000
     
427,473
 
Abandonment loss on furniture, equipment and leaseholds
   
----
     
----
     
23,817
 
Debt extinguishment gain
   
(398,337
)
   
(21,228
)
   
(758,682)
 
Changes in operating assets and liabilities:
                       
Accounts and notes receivable
   
(4,118
)
   
(7,316)
     
(160,527)
 
Inventories
   
5,883
     
19,807
     
(15,534)
 
Prepaid and other assets
   
(13,693
)
   
4,320
     
(1,047)
 
Accounts payable, trade
   
(81,829
)
   
7,230
     
245,039
 
Accrued expenses
   
18,685
     
26,572
     
185,573
 
Net cash (used in) operating activities
   
(198,280
)
   
(42,610)
     
(15,527,231)
 
Cash flows from investing activities:
                       
Patent acquisition
   
----
     
----
     
(550,000
)
Transaction costs in connection with RMI business combinations
   
----
     
----
     
(121,475
)
Purchases of furniture, fixtures and equipment
   
----
     
----
     
(238,949
)
Net cash (used in) investing activities
   
----
     
----
     
(910,424
)
Cash flows from financing activities:
                       
Proceeds from notes payable
   
196,875
     
42,970
     
715,146
 
Proceeds from notes payable and redeemable Preferred Stock
   
----
     
----
     
908,000
 
Payment of notes payable
   
----
     
----
     
(520,800
)
Collection of stock subscriptions
   
----
     
----
     
36,500
 
Stockholder advances
   
----
     
----
     
1,585,007
 
Proceeds from sale of Convertible Preferred Stock
   
----
     
----
     
2,815,000
 
Proceeds from sale of Common Stock
                   
10,631,413
 
Proceeds from the exercise of stock              
   
----
     
----
     
24,250
 
Cash received with combination transaction
   
----
     
----
     
243,308
 
Bank overdraft
   
----
     
(191)
     
----
 
Net cash provided by financing activities
   
196,875
     
42,779
     
16,437,824
 
Net increase (decrease) in cash
   
(1,405
)
   
169
     
169
 
Cash at beginning of period
   
2,281
     
----
     
----
 
Cash at end of period
 
$
876
   
$
169
   
$
169
 
   
See notes to condensed financial statements
 
 
Invisa, Inc.
(A Development Stage Enterprise)
Notes to Condensed Financial Statements
June 30, 2009
(Unaudited)
 
Note A - Basis of Presentation

 The accompanying unaudited Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and Rule 8.03 of Regulation SX. The December 31, 2008 balance sheet data was derived from audited financial statements, but does not include all of the information and notes required by GAAP. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements included in the Annual Report on Form 10-K of Invisa, Inc. for the year ended December 31, 2008.  When used in these notes, the terms “Company”, “we,” “us” or “our” mean Invisa, Inc. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six-months ended June 30, 2009 are not necessarily indicative of the results that may be expected for the year ending December 31, 2009.
 
 Invisa, Inc. is a development stage enterprise that incorporates safety system technology and products into automated closure devices, such as parking gates, sliding gates, overhead garage doors and commercial overhead doors. Invisa has also demonstrated production-ready prototypes of security products for museums and other markets. The Company has not fully implemented its sales and marketing plan and has, therefore, not emerged from the development stage. While most of the Company's operations have been curtailed due to cash flow difficulties the Company continues to sell powered closure safety devices for certain gates.  The Company acquired a license to use the core technology used in the powered closure safety devices in 1997.

Note B - Operating Matters and Liquidity

 The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.    For the six months ended June 30, 2009 and since the date of inception, the Company has had net (losses) applicable to Common Shareholders of $(114,178) and $(35.4) million, respectively. As of June 30, 2009, the Company has not emerged from the development stage and has negative working capital of $(1,056,803). Since inception, the Company has financed its operations principally from the sale of equity securities and debt, as the Company has not generated significant revenues from the sales of its products. Continuation of the Company as a going concern is dependent upon additional external funding and, ultimately, a substantial increase in sales volume and achievement of profitable operations. The Company intends to finance any future development activities and its working capital needs largely from additional borrowing and potential unidentified financing and business development until such time that funds provided by operations are sufficient to fund working capital requirements. While management believes that such borrowing will be available to the Company, there can be no assurance in that regard. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company’s auditors issued a “going-concern” uncertainty opinion on the financial statements for the year ended December 31, 2008, citing significant losses at that date, which raised substantial doubt about the Company’s ability to continue as a going-concern. Continuation of the company as a going concern is dependent upon additional external funding and, ultimately, a substantial increase in sales volume and achievement of profitable operations.
 
 To finance planned operations through at least the next 12 months the Company will continue to depend upon its existing current assets, which are limited, together with any net proceeds additional borrowing and potential unidentified financing and business development which we may obtain in the future.  Management is uncertain as to the level of cash that may be required for product development and operations, especially for the marketing, production and sale of its products in the future.  Management's plan is to access all additional cash required from additional borrowing or potentially from a variety of potential  sources, including:  private equity financing, licenses, joint ventures, partnerships or other business relationships, debt and the potential sale of Company's technology or interest therein.  In the event the Company is unable to access sufficient funding to carryout the aforementioned plan or adopt an alternative plan, the Company may enter into a corporate merger or other form of business combination or sale transaction.  Accordingly, the Company is currently considering changes which may involve reducing or disposing of its current business as necessary to access additional capital or manage operations to a level permitted by available capital.  There can be no assurances that these plans will be successful.  Failure to secure additional financing in a timely manner and on favorable terms when needed will have a material adverse effect on the Company's ability to continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
 
 
Note C – Equity

 During the six months ended June 30, 2008 and 2009, no stock options were outstanding, granted or exercised. In addition, no shares of common or preferred stock were issued other than shares of preferred stock issued pursuant to an agreement dated December 23, 2008, which were considered outstanding at December 31, 2008.

 During the six months ended June, 2009, an officer contributed services with a fair value of $18,000 to the capital of the Company.

Note D – Due to Stockholders and Officers

Due to Stockholders and Officers at June 30, 2009 is as follows:

Monarch Point Fund, Ltd
 
$
85,074
 
Edmund C. King  
   
20,260
 
Total                                                                                                              
 
 $
105,334
 


Note E - Notes Payable
 
 The Company has four lines of credit with a private investor.  The credit facilities allow for advances up to $500,000 bear interest at 10% and have a first security interest in all of the Company’s assets.  Additionally the credit facilities are secured by a security interest in 53,333,333 shares of the Company’s common stock which are held in escrow.  Because the credit facilities are not in default the shares are not treated as issued and outstanding.  At June 30, 2009, $537,000 is outstanding.  The Notes were due December 31, 2008, but under an oral understanding had been held in abeyance while discussions are in progress for anticipated additional financing.  The $37,000 in excess of the Notes has also been borrowed under an oral understanding with the lender with terms similar to the Notes.

Note F- Earnings per Common Share
 
 Basic and diluted earnings per share are computed based on the weighted average number of common stock outstanding during the period.  Common stock equivalents are not considered in the calculation of diluted earnings per share for the periods presented because their effect would not be material or would be anti-dilutive. 

Note G- Subsequent Events
 
 During July 2009 the Company authorized the issuance of 375,000 shares of Common stock to its Directors for compensation. 

Item 2. Management’s Discussion and Analysis of Financial Condition and Plan of Operations
 
 The following discussion and analysis of our financial condition and plan of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this filing. This discussion and analysis contains forward-looking statements including information about possible or assumed results of our financial conditions, operations, plans, objectives and performance that involve risk, uncertainties and assumptions. The actual results may differ materially from those anticipated in such forward-looking statements. For example, when we indicate that we expect to increase our product sales and potentially establish additional license relationships, these are forward-looking statements. The words expect, anticipate, estimate or similar expressions are also used to indicate forward-looking statements. The cautionary statements made herein should be read as being applicable to all related forward-looking statements in this Quarterly Report on Form 10-Q.

 
Background of our Company

 We are a development-stage company, and we expect to continue the commercialization of our InvisaShield technology. For the six months ended June, 2009, we had revenue from product sales of $65,468 principally representing sales of our product for powered parking gates. In addition to limited revenue, these sales have been a vehicle for receiving customer feedback on the reliability, ease of installation, and determining the market’s acceptance of our safety product.

 Financing for our operations in 2009 were derived from limited sales and short-term debt financing. We are working to increase our sales of product, further reduce operating costs and obtain financing including through business combinations and licensing relationships and transactions. In the future based on available financing, we may develop additional safety and security products and bring them to market.
 
Limited Operating History
 
                 We have had a limited history of operations and anticipate that our quarterly results of operations will fluctuate significantly for the foreseeable future.  We believe that period-to-period comparisons of our operating results should not be relied upon as predictive of future performance.  The information in this Form 10-Q must be considered in light of the risks, expenses and difficulties encountered by companies at an early stage of development, particularly companies commercializing new and evolving technologies such as InvisaShield.

Quarter Ended June 30, 2008 Compared to the Quarter Ended June 30, 2009

 Net Sales and Cost of Sales - During the quarter ended June 30, 2008 and 2009, product sales totaled $26,870 and $47,245 respectively.  The Company's sales to date have been limited and constrained by lack of capital.  While the sales increased by $20,375, the cost of goods sold (before patent amortization) as a percent of sales declined from 118% to 47 % as a result of lower product cost in 2009.
    
 Research and Development Expenses - The Company has suspended ongoing research and development activities due to cash constraints.   In the fourth Quarter of 2006, employment of our in-house engineer and his assistant was terminated. These former employees are currently considered outside consulting resources on an as requested/as available basis. To date, we have not requested significant access to this consulting resource and accordingly have experienced a reduction in research and development expenses.

 Selling, General and Administrative Expenses - During the second quarter of 2008 and 2009 selling, general and administrative expenses totaled $73,934 and $49,418, respectively. The decrease of $24,516 in 2009 principally resulted from a reduction in overhead and insurance expenses.
 
 Interest (Expense) and other, Net - During second quarter of 2008 and 2009 interest (expense) and other totaled ($23,959) and ($13,895), respectively.   The interest expense during 2008 related to debt paid off during 2008 and to financing costs and interest due to certain stockholders under lines of credit to the Company.   During 2009 the interest expense related primarily to the latter.  The Company made the decision to settle a trade payable at an extinguishment gain of $21,228 in 2009.
 
 Net Income (Loss) - Net Loss decreased from $(38,757) in 2008 to a net loss of $(16,964)  in 2009.  This decrease resulted from the cost reductions and the other matters discussed above.
 
Six Months Ended June 30, 2008 and 2009

 Net Sales and Cost of Sales - During the six months ended June 30, 2008 and 2009, net sales totaled $55,976 and $65,468 respectively. The Company's sales to date have been limited and constrained by lack of capital.  Cost of sales totaled $43,638 and $28,660, respectively, or 78% and 44% of related sales.

 Research and Development Expenses - The Company has suspended ongoing research and development activities due to cash constraints.   In the fourth Quarter of 2006, employment of our in-house engineer and his assistant was terminated. These former employees are currently considered outside consulting resources on an as requested/as available basis. To date, we have not requested significant access to this consulting resource and accordingly have experienced a reduction in research and development expenses.

 
 Selling, General and Administrative Expenses - During the six months ended June 30, 2008 and 2009, selling, general and administrative expenses totaled $136,959 and $119,953. The decrease of $17,006 in 2009 principally resulted from a reduction in staffing, compensation and related payroll. Marketing activities have been severely limited due to cash constraints.
 
 Interest Income (Expense) and other, Net - During the six months ended June 30, 2008 and 2009, net interest (expense) income totaled $(25,240) and $(28,283). The interest expense during 2008 related to debt paid off during 2008 and to financing costs and interest due to certain stockholders under lines of credit to the Company.   During 2009 the interest expense related primarily to the latter.
 
 Net Income (Loss) - The Company’s net income for these periods decreased from $248,476 in 2008 to a loss of ($90,200) in 2009.  The principal difference resulted from a decrease in the gain of debt extinguishment from $398,337 in 2008 to $21,228 in 2009.
 
Plan of Development and Operations
 
     We obtained funding of $262,730, in the form of short-term debt financing in 2008, and an additional $42,970 in the first six months of 2009, which together with our limited cash from sales supported our operations at a low level.   Due to the limited amount of financing available to us in 2007, we reduced our staff to one part-time person who is supported by consultants, hired on an as needed basis.  During 2008 we further reduced our leased space to less than 550 square feet of space.  Additional financing or increased cash from sales will be necessary to continue our operations at their current level. We do not plan to engage in additional technology or product development until we are able to secure sufficient financing to conduct our operations and fund such research and development. 
 
                 Recommencing the Company's plan of development and operations will require additional funding.  Accordingly, the Company is pursuing additional funding which may include debt or equity financing.  Additionally, the Company is considering the potential for establishing business relationships or transactions, such as a business combination or joint venture/strategic partnerships, which may improve the Company's access to additional capital and/or funding and also potentially support its current and future operations.  In the event the Company is not able to access sufficient funding to support its operations its business operations will be effected adversely. 
 
Liquidity and Capital Resources

 From inception through June 30, 2009 we raised cash of approximately $16.4 million net of issuance costs, principally through private placements of common and preferred stock financings. At June 30, 2009, we had cash and cash equivalents totaling $169.
 
 The Company has obtained financing arrangements with its senior lender aggregating $500,000 at December 31, 2008 under which it had borrowed in full as of that date.  The financing arrangements comprise Notes entered into (i) July 2008 for $100,000, (ii) March 2008 for $150,000 and (iii) prior to 2008 for $250,000.  Each of these notes bears interest at 10 percent per annum and are secured by all of the assets of the Company.  Additionally, the Company has pledged an aggregate of 53,333,333 shares of its common stock which were issued for the sole purpose of being deposited into an escrow account.  These shares, held as collateral, will be delivered to the lender only in the event of a default under or non payment of the Notes.  Upon full repayment of the Notes, said shares will be returned to the Company.  The shares delivered to the escrow agent as security for the Notes are not being treated as outstanding and will only be considered as being issued and outstanding if and when the shares are released by the escrow agent and delivered to the lender as a result of a default or non payment under the Promissory Notes and related security agreement. The Notes were due on December 31, 2008, but under an oral understanding have been held in abeyance while discussions are in progress for anticipated additional financing.  The $37,000 in excess of the Notes has also been borrowed under an oral understanding with the lender with terms similar to the Notes.
 
 
 From inception (February 12, 1997) through June 30, 2009 we were largely focused on technology and product development. The estimated dollar amount spent during this period on company-sponsored research and development was $3,471,292. Because of the Company’s net losses (which aggregate $35.4 million from inception through June 30, 2009) and limited capital, the Company’s consolidated financial statements report that substantial doubt exists regarding the Company’s ability to continue as a going concern.

                 The Company had negative working capital at June 30, 2009, totaling $(1,056,803).  At June 30, 2009 the Company had $169 in cash and cash equivalents to fund its operations. To finance planned operations through at least the next 12 months, we will continue to depend upon our ability to access additional financing.  To support operations, in March 2008 and July 2008, we entered into additional credit facility agreements pursuant to which we could borrow up to $150,000 and $100,000, respectively, subject to agreement of the lender, under secured promissory notes.  Through December 31, 2008, we have borrowed all of the $150,000 under that facility plus as well as all of the $100,000 facility.  Additional financing arrangements are currently in progress.  We have previously borrowed $250,000 from a series of notes from our senior lender.  Our plan is to seek to obtain the funding required to meet ongoing operating expenses through additional private equity and debt financing, license fees, grants, and through potential strategic or business relationships, transactions or business combinations.
 
                 Additional funding may not be available when required or it may not be available on favorable terms. Without adequate funds, we may need to significantly reduce or refocus our operations or obtain funds through arrangements that may require us to relinquish rights to certain or potential markets, either of which could have a material adverse effect on our business, financial condition and results of operations. To the extent that additional funding is raised through the sale of equity or convertible debt securities, the issuance of such securities would result in ownership dilution to our existing stockholders.

Item 3. Controls and Procedures

                 The Company maintains “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Acting President, Chief Financial Officer, and Board of Directors, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable assurance of achieving the desired objectives, and we necessarily are required to apply our judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures.
 
                 Our management, including our Acting President and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2009 and concluded that our disclosure controls and procedures were effective as of June 30, 2009.
 
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
 
                 During the quarter ended June 30, 2009, there were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d–15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
 
Part II. Other Information
 
Item 1. Legal Proceedings

None
 
 
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 
 On July 15, 2009 the Company issued at an aggregrate 375,000 shares of unregistered common stock to its three Directors.  The shares were issued as compensation at the Company’s common stock market price on the award date.  The shares are restricted as to transfer and were issued pursuant to an exemption from registration under Section 4(2) in Regulation D.
 
Item 3. Defaults by the Company on its Senior Securities
 
 The Series B Preferred Stock pays a mandatory quarterly dividend due in arrears on the last day of each quarter. On the date of this filing, accumulated dividends for the quarter ended June 30, 2009 totaling $285,345 have not been paid.
 

Item 4. Submission of Matters to a Vote of Securities Holders

None
Item 5. Other Information

None
 
Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits filed herewith, Item Number - Description:

Item No.
 
Description
31.1
 
Chief Operating Officer Certification Pursuant to Securities Exchange Act Rules 13a-14(a).
     
31.2
 
Chief Financial Officer Certification Pursuant to Securities Exchange Act Rules 13a-14(a).
     
32.1
 
Chief Operating Officer Certification Pursuant to 18 U.S.C. Section 1350.
     
32.2
 
Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350.
     

 (b) 8-K Reports:
       none

 
Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, Invisa has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
INVISA, INC.
 
       
       
Date: August 12, 2009
By:
/s/  Edmund C. King
 
   
Edmund C. King
 
   
Title:   Acting President and Acting Chief Operating
Officer
 
       
       
Date: August 12, 2009
By:
/s/  Edmund C. King
 
   
Edmund C. King
 
   
Title:  Chief Financial Officer
 
 
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